Audits on the Rise

As reported in an article in the Nashua Telegraph recently, there may be further implications from the lack of growth in Meals and Rooms tax income for this year thus far.  The M&R tax collected is $3.5 million lower than budget forecasts.   The latest reports are that M &R collections for August are $22.6 million, which while down $1.1million below projections, but $400,000 ahead of last August.

Please note, an area of focus  being considered to offset the deficit is of concern to our industry; namely increased audits.   As reported in the Telegraph:

Aggressive auditing of business taxpayers and a one-time tax windfall from property and casualty insurers put the state in decent position to meet its revenue forecast this year, state officials said Tuesday.

“We should be OK for this year, but it’s the future that is cause for serious review,’’ said Sen. Lou D’Allesandro, Manchester Democrat, who chairs the Senate Ways and Means Committee.

Indeed, there are warning signs as taxes and fees from gasoline, dining out, hunting and fishing are all off the pace, state agency heads reported.

D’Allesandro said decisions made by the Legislature and the Bush administration have reduced federal and state revenue by $225 million over the next two-year budget cycle that begins July 1.

“This will all make for a very interesting budget season,’’ D’Allesandro said.

State taxes and fees came within two-tenths of 1 percent of the Legislature’s $1.6 billion estimate for the year that ended June 30.

Revenue Commissioner Phil Blatsos said getting 13 new auditors on the job produced an annual increase of $15 million from the state’s two main business taxes on corporate profits and business activity.

"I think the day may come we run out of  areas of audit, but not in my lifetime," Blastos said.

Comments

[NHLRA]

Hi Mary Lou,
Thank you for your observations. You are absolutely correct in your view of the direct correlation between tourism promotion funding, and the eventual resulting numbers.

I had not heard that fact specifically about Daytona…but it doesn’t surprise me…many cities do indeed have higher budgets than our entire budget.

That’s why the NHLRA, again with many business group partners, will be lobbying for further tourism funding in the budget during this upcoming legislative session. The office of Tourism and Travel has been proactive and resourceful and made good inroads, for example studying today’s traveler, and marketing this state to areas and demographics that will respond to it. Their Return on Investment is $8.51…and has been on the rise for the last few years. We think it’s a smart step to continue to support them. In my last meeting with them, I was impressed with their efforts to work towards marketing the state in all of its seasons, and finding angles that are not weather dependent…for instance, event related instead. As you said, the weather made it a tough year for so many of you.

I hope you may consider joining us for one of our upcoming Public Policy Forums…we will be out and about talking to members this fall. Also, we will be asking for members to make their opinions known to their legislators as we push for further tourism funding; be sure to watch for that opportunity, too!

Congrats to you on such a successful audit track record….that is impressive, given some of the other results I have heard! You obviously work hard to achieve it.

[NHLRA]

Hi Michelline, Just read your email and think the state should have been prepared for the decrease in room and meals tax with the general decrease in travel in our state.

Certainly a snowless winter was part of the cause, but you can add increase gas prices to that.

In our area, you can add the construction of Rt. 16 which has
been ongoing for 3 years. A few of the inns and motels along the area have had their front lawn torn up for over a year. It has not been handled well at all.
And, I feel that the state has not budgeted a proper amount for tourism promotion.

Have heard that the City of Daytona Beach spends more on tourist advertising than the
State of New Hampshire.

It is sad, especially if they take it out on the small business owners. Audits cost time and often accounting fees and are not often needed.

The 2 times in the 17 years we have run Dana Place that we have been audited, they owned us once and we owed them about $16. the other time. So, a waste of
time and money for both of us. Just thought you would like some of our thoughts. Hope all well at NHLRA.

Mary Lou Levine