Business Incentives

To Our Quebec Neighbors

New Hampshire's North Country has a shared cultural heritage with Quebec. Many New Hampshire people speak French and still have relatives living in Quebec Province. Several Quebec companies have expanded to towns such as Colebrook and Berlin where they have been welcomed with open arms. Companies such as Codet Inc., Kheops International, and Godin Guitars have made the North Country their home.

When they expand to the U.S. for the first time, many Quebec companies are surprised to learn that each state may have different fiscal and social policies. For example, Vermont, Maine and New York have some of the highest business taxes in the United States while New Hampshire ranks one of the lowest. Also, each state has different approaches to regulating commerce. New Hampshire takes a more balanced approach that protects the consumer, but does not burden business with excessive government regulations.

When you drive down Route 91 from the Derby Line in Vermont notice how much more commerce there is on the New Hampshire border vs. the Vermont border. The reason why Lebanon, New Hampshire has exploded with retail, office, and industrial business while White River Junction has beautiful farm pastures but little business: New Hampshire does not have a sales tax or broad-base income tax and Vermont does!

Taxes and Incentives

New Hampshire's Low Tax Burden

New Hampshire's state motto, "Live Free or Die," represents the state's spirit of independence, frugality and simplicity. Individual freedom is the essence of economic independence and New Hampshire is a state that has a history of limiting taxes and lowering state government spending. The result: New Hampshire has one of the lowest tax burdens in the U.S.

Taxes: We don't need to exempt taxes we don't have

Many high tax states boast that they mitigate their tax burden through short-term abatements, tax credits, subsidies and in some cases, even free land and buildings. In New Hampshire, the "Live Free or Die state", there is no free lunch. Instead of taking taxpayer money and giving some of it back for special cases and much paper work, New Hampshire takes this approach to incentives:

Taxes do matter to business

Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state's economy. Most importantly, taxes diminish profits. If taxes take a larger portion of profits, that cost is passed along to either consumers (through higher prices), workers (through lower wages or fewer jobs), or shareholders (through lower dividends or share value). Thus a state like New Hampshire with lower tax costs will be more attractive to business investment, and more likely to experience economic growth.

States do not enact tax changes (increases or cuts) in a vacuum. Every tax law will in some way change a state's competitive position relative to its immediate neighbors, its geographic region, and even nationally. Ultimately it will affect the state's national standing as a place to live and to do business. Entrepreneurial states like New Hampshire often attract businesses from high-tax states like Massachusetts, New Jersey and California. When one combines the low tax factor with quality of life, it is no surprise that New Hampshire ranks of one of the top states to relocate a family business.

Source: Tax Foundation, Washington DC

Other Financial Incentives in Addition to Low Taxes

Economic Revitalization Zone Tax Credits

The state offers a program called ERZ Tax Credits, which provides short-term, tax credits against the business profits and enterprise taxes. To qualify, the location must meet certain demographic criteria, or be located in an unused or under-utilized industrial park, on vacant land, or in structures previously used for industrial, commercial, or retail purposes but currently not so used, or on a brownfield site.

R&D Tax Credit

Small and large businesses can apply for tax credit on new research and development costs. The state has set aside a $1 million a year to fund the credit which will be capped at $50,000 for any business that qualifies. This credit may be carried forward for up to five years.

Community Development Block Grant (CDBG)

This assistance can be in the form of a grant to the municipality for the public infrastructure improvements on behalf of an expanding business or it can be a loan to the business itself. The maximum amount of funding available for any given project is $500,000, regardless of size of the community applying for the grant. All grants are one-year duration, and one job must be created for each $20,000 in CDBG funds granted. The key to this federal program is that a minimum of 60% of the jobs created must be filled by low and moderate-income persons.

Job Training Grant Program

This is a 50/50 cash match for customized training. There is no cap on the training amount. Each application is reviewed on a case-by-case basis with an emphasis on improving the skills of current or new employees.

North Country Job Creation Tax Credit

This program is a tax credit to businesses hiring new employees in Coos County (the North Country) and paying wages equal to or above 200 percent of the minimum wage ($7.25 per hour). The credit of $1,000 for any new, full-time, year-round jobs is applied to the Business Enterprise Tax, but any unused portion of the credit can be applied to the Business Profits Tax. All new jobs created after the bill's effective dates are eligible for the credit and there is no cap on the amount of jobs created. The carry-forward is five years.

Industrial Revenue Bonds

This program is for only manufacturers, i.e, companies that manufacture or produce tangible personal property. At least 75% of bond proceeds must be spent on core manufacturing space and equipment. Storage, office and R&D space must be excluded from this calculation. To be cost effective, loans must be between 1.5 and 20 million. The interest rate is about 70% of prime and can be used for the purchase of land, buildings and capital equipment.

SBA 504 Program

This loan program is designed to work in conjunction with commercial banks to provide 90% long-term, fixed-rate financing for small to medium-sized businesses in owner-occupied buildings that provide employment opportunities.

Business Services

Federal Contract Procurement

The Procurement Technical Assistance Program (PTAP) is sponsored by the State of New Hampshire Business Resource Center and the Defense Logistics Agency. This national program provides specialized and professional assistance to individuals and businesses seeking to learn about contracting and subcontracting opportunities with Department of Defense (DOD), other federal agencies, or state and local governments.

Export/Import Assistance

The New Hampshire International Trade Resource Center (ITRC), managed by the NH Office of International Commerce, plans, develops, and administers programs for international trade promotion and foreign market development for New Hampshire companies. The center also houses the U.S. Department of Commerce, the U.S. Export-Import Bank, the U.S. Small Business Administration, the NH Small Business Development Center, the U.S. Agency for International Development, and the New Hampshire International Trade Association.

Ocean Bank Energy Efficiency Program

Ocean Bank's Energy Efficiency Loan Program is designed to help New Hampshire business owner's lower energy costs with a reduced interest rate loan. Participating businesses can use this lower rate loan for structural and equipment improvements, which will reduce their energy consumption, thereby saving their business money and helping to conserve energy.

The state also offers

• free site visits to determine a strategy for improving energy efficiency.
• free industrial assessments to eligible small and medium-sized manufacturing plants.
• research connections with university faculty for energy-related projects.
• educational opportunities including workshops on industrial technologies developed and taught by US DOE Best Practices professionals.
• links to potential grants and rebate programs from utilities and federal programs.