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Author Topic: Massive (5%) New Tax on New Hampshire LLC's Likely  (Read 9333 times)

anon37268573

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Massive (5%) New Tax on New Hampshire LLC's Likely
« on: December 15, 2009, 04:33:22 pm »

The state is planning to expand the Dividends Income Tax to include distributions from LLC's.  That's basically a new, additional 5%, income tax on most small business in New Hampshire.

Union Leader Article:

http://www.unionleader.com/article.aspx?headline=Business+owners+to+governor%3a+Ax+new+tax&articleId=9bf537e0-4965-4434-aee6-3a0010439e64

    - anon
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Dreepa

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #1 on: December 15, 2009, 04:39:23 pm »

There will be a protest tomorrow:
http://www.nhteapartycoalition.org/tea/nh-events/ We are looking for help from 9-11AM tomorrow morning in protest of this LLC/Partnership tax hearing. We'd love to find some people to hold signs at 109 Pleasant St

also here is a petition to sign;
http://www.petition.fm/petitions/stopthellctax
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rossby

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #2 on: December 15, 2009, 05:31:11 pm »

The proposed rule also does some good by allowing some previously unallowed offsets against LLC income.

But overall, it's proposing to "legally created" a dividend where--in fact--there isn't a dividend (and the exceptions for monies paid to LLC owners is even more peculiar in that sense). Generally, it will increases the cost for business owners to invest in jobs and make purchases by 5.25%.

It's only a good idea if you want to shank the struggling economy in the kidney.

I humbly suggest that is unwise.
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John Edward Mercier

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #3 on: December 15, 2009, 05:34:29 pm »

The Legislature will need to determine a budgetary offset during this session for the LLC taxation to be dropped.
I know what I would suggest, but does anybody else have some suggestions?
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anon37268573

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #4 on: December 15, 2009, 05:39:50 pm »

There will be a protest tomorrow:
http://www.nhteapartycoalition.org/tea/nh-events/ We are looking for help from 9-11AM tomorrow morning in protest of this LLC/Partnership tax hearing. We'd love to find some people to hold signs at 109 Pleasant St

I can't get off work at that time.  But, believe me, I'll let Lynch know how I feel when he runs for re-election.  He has no chance of getting my vote;  nor do any other incumbents who voted for this tax hike.

We need more voting movers to make sure anti-business morons like Lynch don't get elected in the first place.


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John Edward Mercier

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #5 on: December 15, 2009, 05:43:37 pm »

Lynch's proposal was to cut expenditures... which I agree with.
The Legislature's proposal was to raise taxes.

He could have vetoed the budget, but the cost would have been an extra $11 million per month till a budget was passed.

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anon37268573

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #6 on: December 15, 2009, 05:57:23 pm »

Lynch's proposal was to cut expenditures... which I agree with.
The Legislature's proposal was to raise taxes.

He could have vetoed the budget, but the cost would have been an extra $11 million per month till a budget was passed.

If he felt he had no choice, he should have at least negotiated in a "sunset provision" so that this giant tax hike would only last a few years.

He didn't fight against this at all, as far as I can see.  I would have liked to see him resist the legislature like the Governor of California did.  $11 million a month is really not very much money when you're paving roads that don't need to be paved and building $50 million dollar high schools that rival private Ivy League college campus buildings.

The main problem that I see with the NH State Budget is constitutional requirements regarding local aid and education mandates.  The Legislature needs to fix those mandates or we'll wind up like NJ - raising business taxes with the justification of lowering property taxes.  But, then needing to raise property taxes because the business tax base shrunk so dramatically when the business taxes were raised.  NJ now has some of the highest business taxes *and* property taxes in the country.  The state is also rapidly losing n-generational (where n > 1) American population at a rapid rate.  The only people moving to NJ are people moving from outside the country who don't know better.

    - anon
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rossby

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #7 on: December 15, 2009, 06:00:30 pm »

Lynch's proposal was to cut expenditures... which I agree with.
The Legislature's proposal was to raise taxes.

I don't know Lynch's position, but let us remember this is a proposed regulation by an administrative department. The word might not have come from above in this case. It is a possibility. Has Lynch come out in support of this? (I see yes.)

--Oh my, I just saw the effective date: the tax is applicable to all "distributions" in 2009. Wow, business owners should be PISSED. That's not a tax. That's outright confiscation.
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anon37268573

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #8 on: December 15, 2009, 06:07:32 pm »

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creaganlios

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #9 on: December 15, 2009, 08:56:39 pm »

FYI, the hearing has been moved to a community rec center acoiss the street because of the expected turnout...the RLCNH is making numerous signs and you can expect a decent protest if you can make it....
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Floridian

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #10 on: December 15, 2009, 09:19:06 pm »

That's outright confiscation.

The future is now.
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maxxoccupancy

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #11 on: December 16, 2009, 03:00:53 am »

The vast majority of folks I've talked to believe that we should get money, power, and decision making back down to the local level.  During "crises" like this one, we should be out at the forefront offering the smaller gov't alternative to repeatedly raising taxes.

Let folks know that, if we don't downsize the role of the state, that New Hampshire will just end up like New York or Massachusetts.
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rossby

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #12 on: December 16, 2009, 05:59:11 am »

I wish I could take my name off the petition. I just feel silly now ;)

http://forum.nhliberty.org/index.php?topic=2618.msg20197#msg20197

Quote from: B.D. Ross
I had hoped to post a good summary of information about the proposed rules so that people would at least have something to refer to or review.

However, after a very, very thorough and careful review of RSA 77 and RSA 77-A, I must conclude that what the revenue administration is trying to do is supported by current law. The interpretation of the law is rather convoluted. But as the law currently stands (it was changed in June), these rules will benefit LLC owners: it essentially allows a tax deduction that the old rules don't allow.

Let me be clear: there is a new tax on LLC owners. And that's bad. But this rule will mitigate the damage somewhat.

The $30,000,000 question is, where did this law come from?!? I've been looking around for it. I was pretty sure I read every bill submitted last year--I don't remember this one. It would've been an enormous blip on my radar.

Apparently, it was slipped in as Sections 275-279 of HB 2. And I mean "slipped in", because those provisions aren't in the original bill collected by the NHLA. I'm told there were no hearings on the changes (have not confirmed yet).

Figurative heads seriously need to roll. Rep. Marjorie Smith's (Stafford 7) is the sole sponsor.

In addition, I suggest a CACR:

Quote
Part I, Article 40 [Laws; object, title, amendments changing purpose.]

No law or bill shall embrace more than one object, which shall be plainly expressed in its title. No bill shall be altered or amended on its passage through either house so as to change its original purpose as determined by its total content and not its title alone. A law enacted in violation of this article shall be wholly void.
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John Edward Mercier

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Re: Massive (5%) New Tax on New Hampshire LLC's Likely
« Reply #13 on: December 16, 2009, 11:59:03 pm »

How a better governor would have handled a situation like this:

  http://www.boston.com/news/local/rhode_island/articles/2009/12/15/ri_gov_defends_funding_cuts_to_local_government/

Sounds exactly like what Lynch proposed... but in NH the governor is an expressly designed weak executive.
Lynch proposed that the State cut revenue sharing and the transfer of Room & Meals (now Meals & Rentals) revenue to the municipalities. The State is not constitutionally required to make these transfer payments.
It would only raise property taxes should the municipalities not be responsible in cutting their local budgets rather than relying on State subsidization.
 
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Dreepa

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