Increasing the percentage of revenue deposited in the education trust fund from the business profits tax.
Summary
HB 255 would change the statutory distribution of Business Profits Tax (BPT) revenue in New Hampshire by increasing the share certified for deposit into the Education Trust Fund from 41% to 59%. Under current law, the commissioner of revenue administration certifies 41% of BPT revenue for the Education Trust Fund; this bill would amend RSA 77-A:20-a, I to require certification of 59% instead, beginning July 1, 2025.
The bill does not change the amount of BPT collected or the tax rate itself. Instead, it reallocates existing BPT revenue between the General Fund and the Education Trust Fund. The fiscal note estimates that, using FY 2025 plan revenue as a reference point, the shift would decrease General Fund revenue and increase Education Trust Fund revenue by about $158.8 million each, while leaving total BPT revenue unchanged. The note also flags possible reporting and timing complications because the BPT split would differ from the Business Enterprise Tax split, which can create temporary mismatches in fund accounting when returns are filed after estimated payments are received.
Impact
HB 255 would amend state revenue-distribution law, specifically RSA 77-A:20-a, to redirect a larger portion of Business Profits Tax receipts to the Education Trust Fund. This would reduce the amount of BPT revenue flowing to the General Fund and increase the amount available for education funding, without changing taxpayer liability or total state tax collections. The bill would take effect July 1, 2025, and the Department of Revenue Administration indicates it could implement the change without additional administrative costs beyond existing resources.
Sentiment
Based on the available materials, the bill appears to be framed as a funding measure for education rather than a tax increase, and the fiscal note treats it as a revenue reallocation rather than a new levy. No committee transcript or recorded votes were provided, so there is no documented floor or committee debate to gauge broader legislative sentiment. The bill’s sponsor and caption suggest support for directing more business tax revenue to education, while the fiscal note presents the change in a neutral, technical manner.
Contention
The main policy tension is between education funding and the General Fund: supporters would likely favor the larger Education Trust Fund allocation, while opponents or budget hawks may object to the corresponding reduction in General Fund revenue. A secondary point of concern identified in the fiscal note is administrative and accounting complexity, because the BPT would have a different fund split than the Business Enterprise Tax. That difference can require later reallocations and may cause temporary inconsistencies in reported fund balances, especially when estimated payments are later reconciled with filed returns.