Planet Fitness' request to change a provision in New Hampshire's business tax code could be voted on by state lawmakers this week.
The change was approved by a conference committee of House and Senate negotiators without Democratic party support on June 17, according to a Union Leader report. The next scheduled House and Senate sessions are Wednesday.
If the House and Senate pass House Bill 550, it would need to be signed by Democratic Governor Maggie Hassan before becoming law July 1. The legislative session is expected to end June 30.
Planet Fitness has threatened to relocate its Newington, New Hampshire-based headquarters if the law is not changed ahead of its planned initial public offering (IPO). The IPO date has not been determined yet.
At issue is a provision in New Hampshire's business profits tax that adjusts gross business profits in determining taxable business profits. When a business organization sells or exchanges an interest in an organization, the provision adds to gross business profits an amount equal to the net increase in the basis of all underlying assets transferred or sold through the sale or exchange of the interest.
The language in the amended bill gives New Hampshire businesses a second choice on when to pay the business profits tax in the event of a sale or exchange.
The company could declare its increase in value in its tax returns and pay the state's 8.5 percent business profits tax. In this option, a company would be allowed a future deduction against gross business profits for depreciation or amortization on the increased basis. The company also would be afforded a future deduction against gross business profits in the event of an increase in the basis of the assets when assets are sold. The future deductions would not apply if the company does not declare its increase in value in its tax returns.
The negotiating committee recommended the House concur with the Senate's amendment, which passed with a 14-10 vote on June 4. The committee also recommended the Senate and House pass the bill.
Republicans hold a majority in the New Hampshire House and Senate. There is some opposition by House Republicans, and Hassan could veto the bill, according to the Union Leader.
“I’ve been very concerned about the process behind that bill. It came in literally at the 11th hour in the legislative process,” Hassan told the Union Leader. “What I am not hearing from supporters of that bill is how they plan to pay for the lost revenues that bill entails.”