New Hampshire HB 1597: relative to business profits tax expense deductions.

Bill Text

HB 1597-FN - AS AMENDED BY THE SENATE

04/09/2026 1322s

05/07/2026 1640s

2026 SESSION

 26-3177

 04/09

HOUSE BILL 1597-FN

AN ACT relative to business profits tax expense deductions.

SPONSORS: Rep. Janigian, Rock. 25; Rep. Ohm, Hills. 10; Rep. Ulery, Hills. 13; Rep. Bryer, Rock. 1; Sen. Abbas, Dist 22; Sen. Gray, Dist 6

COMMITTEE: Ways and Means

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AMENDED ANALYSIS

 This bill increases the expense deduction cap by adding phased-in caps of $1,000,000 in 2027, $1,500,000 in 2029, $2,000,000 in 2031, and $2,500,000 in 2033.

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Explanation: Matter added to current law appears in bold italics.

 Matter removed from current law appears [in brackets and struckthrough.]

 Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

04/09/2026 1322s

05/07/2026 1640s 26-3177

 04/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty-Six

AN ACT relative to business profits tax expense deductions.

Be it Enacted by the Senate and House of Representatives in General Court convened:

 1 Expense Deductions; Cap Increase. Amend RSA 77-A:3-a to read as follows: 

 77-A:3-a Expense Deductions. 

 In determining gross business profits before net operating loss and special deductions, a business organization shall calculate expense deductions as permitted under Section 179 of the Internal Revenue Code as provided in RSA 77-A:1, XX, except that for property placed in service on or after January 1, 2018, a business organization shall calculate expense deductions not to exceed $500,000; for property placed in service on or after January 1, 2027, a business organization shall calculate expense deductions not to exceed $1,000,000; for property placed in service on or after January 1, 2029, a business organization shall calculate expense deductions not to exceed $1,500,000; for property placed in service on or after January 1, 2031, a business organization shall calculate expense deductions not to exceed $2,000,000; and for property placed in service on or after January 1, 2033, a business organization shall calculate expense deductions not to exceed $2,500,000. 

 2 Effective Date. This act shall take effect 60 days after its passage.

 LBA

 26-3177

 4/17/26

HB 1597-FN- FISCAL NOTE

AS AMENDED BY THE SENATE (AMENDMENT #2026-1322s)

AN ACT relative to business profits tax expense deductions.

FISCAL IMPACT: 

 Estimated State Impact

FY 2026

FY 2027

FY 2028

FY 2029

 Revenue

$0

Indeterminable Decrease

 Revenue Fund(s)

General Fund and Education Trust Fund

 Expenditures*

$0

$0

$0

$0

 Funding Source(s)

None

 Appropriations*

$0

$0

$0

$0

 Funding Source(s)

None

 *Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill

METHODOLOGY:

This bill increases the expense deduction permitted under Section 179 of the Internal Revenue Code as provided in the Business Profits Tax statute (RSA 77-A:1, XX) from $500,000 to $1,000,000 on January 1, 2027 and then increases by $500,000 every 2 years on January 1 until it reaches $2,500,000.

The Department of Revenue Administration does note the bill as drafted could be read to repeal the $500,000 limit for property placed in service on or after January 1, 2018 and before January 1, 2027, although that is not the intent. The Department recommends amending the language to clarify the intent and provides the following suggestion:

". . .except that for property placed in service on or after January 1, 2018, a business organization shall calculate expense deductions not to exceed $500,000; for property placed in service on or after January 1, 2027, a business organization shall calculate expense deductions not to exceed $1,000,000; for property placed in service on or after January 1, 2029, a business organization shall calculate expense deductions not to exceed $1,500,000; for property placed in service on or after January 1, 2031, a business organization shall calculate expense deductions not to exceed $2,000,000; and for property placed in service on or after January 1, 2033, a business organization shall calculate expense deductions not to exceed $2,500,000."

The Department of Revenue Administration states this bill will decrease General Fund and Education Trust Fund revenue by an indeterminable amount starting in FY 2027. The Department is able to provide an estimated fiscal impact using Tax Year 2023 data, the latest full year of data available as it currently captures the amount of IRC §179 expense in excess of the currently allowed $500,000 as an add back to the calculation of the taxable business profits. The Department calculated the tax impact of the additional $2,000,000 increase in the deduction limit. Based on the historical trends that fiscal year revenue consists