The following was published in the NH Union Leader on March 3, 2026, written by State Representative Michael Cahill of Newmarket, and are his views. For purposes of this discussion, I do not support any new taxes for NH nor do I support the “3-3 plan” to fund education.
Taxes have been back in the headlines lately. Some are seeking a .5% cut to the Business Enterprise Tax (BET) — or even an outright repeal — while others are suggesting a “3–3 plan” to fund education. That proposal would establish a 3% tax on adjusted gross income (with various exemptions) alongside a 3% statewide property tax.
The Statewide Education Property Tax (SWEPT) has been with us since the late 1990s. Originally set at $6.60 per $1,000 of value, it was reduced in 2010 to $2.19. More recently, the rate has been determined by assessed property values to ensure approximately $363 million is raised for the state’s share of “adequate education” costs. As most homeowners know, local property taxes still shoulder an additional 60% of the total cost of education.
There is nothing new about cutting business taxes; it happens frequently. Ten years ago, the Business Profits Tax (BPT) rate was 8.2% and the BET was .72%. Following a series of incremental cuts, the BET now sits at .55%, while the BPT has dropped to 7.5%. Both taxes have thresholds — tied to the Consumer Price Index and adjusted biennially — under which no tax is due. Currently, those thresholds are $298,000 for the BET and $109,000 for the BPT. Because BET payments are applied as a credit to reduce BPT liability, many small businesses pay neither; the bulk of these taxes are actually paid by large out-of-state or international corporations.
While business taxes are a major revenue source, the Meals & Rentals (M&R) tax — paid by customers — is also among the top three. Its rate was recently reduced from 9% to 8.5%. While this hasn’t necessarily increased sales for restaurants or hotels, it has reduced state revenues by roughly $20 million annually since 2022. This means there is less revenue to share with municipalities on a per capita basis, a 60/40 split promised back when the tax was enacted in 1967. There was even a downside for the businesses themselves, as their 3% commission for collecting and remitting the tax was proportionally reduced.
While everyone appreciates lower taxes, they inevitably result in lower state revenues and difficult budgeting decisions. When state programs are cut, the burden often “downshifts” to local governments, ultimately driving property taxes higher.
State revenues have been disappointing recently, and we have only avoided a deficit thanks to a tax amnesty program. Here is a summary of the amnesty amounts collected:
Business Taxes: $96.7 million
Interest and Dividends Tax: $4.4 million
Meals & Rentals: $1.0 million
Tobacco: $0.7 million
Real Estate Transfer & Communications: $1.0 million
Total: $103.8 million
By waiving approximately $4 million in penalties and $13.4 million in interest, the state realized a net revenue of $86.7 million. While an $86 million return on a $17 million “investment” (the waived fees) isn’t bad, we must remember that if these taxes had been paid in full and on time, $103.8 million would have been available to the state. These figures should serve as a cautionary note as further tax cuts are considered.