NH Senate Republicans - Does Governor Hassan want to tax the Internet?

The New Hampshire Senate

Republican Majority Office

Concord, NH – Senate Majority Leader Jeb Bradley responded today to Governor Hassan’s claim that reductions in business taxes implemented in the current budget are “having a negative impact on the State Budget”, by asking the Governor if she wants to tax the Internet. The Legislature eliminated the Communications Services Tax on Internet Access. Bradley asked if Governor Hassan would repeal that bipartisan tax reform so that the Communications Services Tax would apply again to Internet Access.

“Like all of the recent reforms to New Hampshire’s business tax code, exempting Internet access from the Communications Services Tax passed with overwhelming bipartisan support, and it was included in the budget which Governor Hassan praised last year,” Bradley said. “If Governor Hassan really thinks that these tax reforms are causing problems, she has a duty to tell us specifically which ones she wants to repeal.”

Congress imposed a moratorium on Internet access taxes in 1998. Several years ago, the New Hampshire Department of Revenue Administration began applying the 1990 Communications Services Tax to Internet access without Legislative approval. Bipartisan majorities in the House and Senate stepped in to correct this bureaucratic overreach with HB 1418, by clarifying that Internet access was not taxable. In 2012, HB 1418 passed the Senate 23-0 and the House 244-46.

“These tax reforms such as blocking an Internet Access Tax were passed with bipartisan support to spur job creation. New Hampshire has performed poorly in economic growth compared to other states which is why the Legislature led on this issue. Does NH really want to reverse those job growth initiatives when our economy is growing by less than 1% annually?” Bradley concluded.

Rather than blaming job growth measures for potential funding budget shortfalls, Governor Hassan would be better served by providing an update on each departments spending levels for the fiscal year that concluded in July as well as projections on how large the budget deficit in the current fiscal year is likely to be. If indeed there is a $100 deficit looming as some predict, the sooner that information is provided to the Legislature and the public, will make addressing the deficit less painful.