establishing tax credits for qualifying small businesses against documented tariff-related costs.
SB 636 would create two temporary tax credits for qualifying small businesses to offset documented costs tied to federal tariffs. The bill adds a new Tariff Relief Business Tax Credit under the business profits tax and a parallel Tariff Relief Enterprise Tax Credit under the business enterprise tax. In both cases, eligible businesses could claim a nonrefundable credit equal to 25% of documented tariff-related costs, capped at $7,500 per business per year, with claims subject to a statewide annual cap of $8 million and first-come, first-served allocation if applications exceed the cap.
To qualify, a business must either be a manufacturing business with fewer than 50 employees in New Hampshire or a non-manufacturing business with average annual gross receipts of $500,000 or less. The bill requires applicants to document tariff-related costs with invoices, tariff classification codes, or supplier certifications acceptable to the Department of Revenue Administration, and to apply by March 31 after the taxable year ends. Unused credits could be carried forward for up to three years, but the credits would not be refundable. The department would be authorized to audit claims, recapture improperly claimed credits, adopt implementing rules, and report annually to the House and Senate Ways and Means Committees.
The bill would amend RSA 77-A and RSA 77-E to add these credits, apply them to tax periods beginning on or after January 1, 2027, and then repeal the new sections effective June 30, 2032. In practical terms, it would temporarily reduce business profits tax and business enterprise tax liability for a limited class of small businesses that can prove tariff-driven cost increases, while also creating administrative duties for the Department of Revenue Administration to verify claims and manage the statewide cap.
The general sentiment reflected in the available voting history appears unfavorable: the bill received an "Inexpedient to Legislate" vote by a 16-8 margin on January 29, 2026. No committee transcript excerpts were provided, so there is no recorded discussion to indicate support or opposition arguments beyond the vote itself. The vote suggests that a majority of the committee did not support advancing the measure.
The main points of contention are likely the fiscal cost, the narrow eligibility rules, and the administrative complexity of verifying tariff-related expenses. Supporters would likely view the bill as targeted relief for small businesses affected by federal trade policy, while opponents may question whether a state tax credit is the right tool, whether the documentation requirements are workable, and whether the $8 million annual cap is sufficient or justified. The bill’s temporary nature and sunset date may have been intended to address some of those concerns, but the committee vote indicates those concerns still outweighed support.
SB 636 would add two new temporary tax credit provisions to New Hampshire’s business tax statutes, RSA 77-A and RSA 77-E, creating a state tax offset for qualifying small businesses that can document increased costs caused by federal tariffs. It would affect business profits tax and business enterprise tax liability, establish application, audit, recapture, and reporting requirements for the Department of Revenue Administration, and impose a statewide annual credit cap of $8 million. The credits would apply beginning with tax periods on or after January 1, 2027, and the new statutory sections would be repealed effective June 30, 2032.
The available record shows limited public discussion but a clear committee outcome: the bill was voted Inexpedient to Legislate by a 16-8 margin on January 29, 2026. That vote indicates the prevailing sentiment in committee was negative, or at least not supportive enough to advance the proposal. Because no transcript excerpts were provided, there is no detailed record of the arguments made, but the vote suggests skepticism about the bill’s policy approach or fiscal implications.
The likely areas of contention are whether tariff-related business costs should be subsidized through the state tax code, how much the proposal would cost the state, and whether the Department of Revenue Administration could effectively verify claims. Opponents may also have concerns about the narrow definition of eligible small businesses, the first-come, first-served cap allocation, and the administrative burden of documentation, audits, and recapture. Supporters would likely argue that the bill provides targeted relief to small manufacturers and low-revenue businesses facing higher input costs from federal tariffs, but the committee vote suggests those arguments did not prevail.