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New Hampshire: Gas Tax and Pot


 Gas taxes and recreational pot: will NH turn right or left?

New Hampshire Governor Maggie Hassan (D) made an oblique reference to increasing the state’s gasoline tax during her 2014 State of the State Address. She also categorically rejected legalizing marijuana.

Roads and bridges

I-93, which runs north from Boston through the states’ largest cities and into the White Mountains, is currently being broadened in several key places. $250 million is needed to complete an expansion project between Salem and Manchester, and another $500 million to complete several other projects. An additional 1,600 miles of roads and 500 bridges throughout the state need to be rebuilt or repaired, to the tune of $1.3 billion.

To raise the necessary funds, Senate Transportation Committee Chair Senator Jim Rausch (R-Derry) has proposed raising the state’s gasoline tax and linking it to the Consumer Price Index. “His proposal would raise the levy by four cents this year and generate $28 million for the Department of Transportation” (NPR). Rates would be adjusted every four years, beginning in 2018. New Hampshire’s gas tax has been 18-cents per gallon since 1992.

Although Governor Hassan did not directly call for a gas tax in her State of the State Address, she did say this:

“We know that a solid, modern transportation infrastructure is the foundation for long-term economic growth, and I appreciate that there is broad agreement in the legislature about the need to strengthen investment in our roads and bridges.”

She then thanked Senator Rausch “for leading efforts to take an important step toward addressing our transportation needs.”

Marijuana

The Live Free or Die state made national headlines in January, when the NH House of Representatives “became the first U.S. legislative body to vote in favor of legalizing marijuana for recreational use” (Huffington Post). H.B. 492 was approved in a 170-162 vote following “a long and lively debate.”

Voters—not lawmakers—were behind legalization in Washington State and Colorado.

The opening of the bill states:

"In the interest of the efficient use of law enforcement resources, enhancing revenue for public purposes, and individual freedom, the people of the state of New Hampshire find and declare that the use of marijuana should be legal for a person 21 years of age or older and taxed in a manner similar to alcohol."

Revenue raised by taxes imposed on marijuana would be put in the general fund:

  • Retail sales of marijuana would be taxed at 15% of the sales price; and
  • Marijuana “sold or otherwise transferred by a marijuana cultivation facility to a marijuana product manufacturing facility or to a retail marijuana store” would be taxed at $30 per ounce.

However, the bill also states that the Department of Revenue Administration is “unable to estimate revenue resulting from the bill,” and would “incur significant costs to study, develop, and implement a licensing certification process, as well as enforcement mechanisms, a tax implementation and collections process,” and so forth. In other words, “the bills’ fiscal impact is indeterminable.”

It may not matter. Although Governor Hassan signed a medical marijuana bill into law last year, she has said she will “veto any marijuana legalization bill.” This message came through loud and clear in her State of the State Address: “Legalizing marijuana won’t help us address our substance use challenge.” She also noted that New Hampshire has “among the highest rates in the country of drug and alcohol abuse….”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.