A bill driven by Planet Fitness' request to change a provision in New Hampshire's tax law was vetoed by Governor Maggie Hassan on Monday.
The Newington-based company has threatened to move its headquarters out of New Hampshire if the provision in the business profits tax is not changed.
Below is Planet Fitness' statement on the veto, Hassan's veto message and reaction from lawmakers.
Planet Fitness statement on Hassan's veto of House Bill 550:
"While we're disappointed that Governor Hassan vetoed HB 550, we're hopeful that the Governor and both sides can work together constructively in the coming weeks to resolve the broader budget in a manner that incorporates the substance of this bill which benefits many businesses in NH, from start-ups to public companies. As a company founded in New Hampshire more than 23 years ago, we would like to stay in NH, which is why we are committed to this issue and urge both sides to continue to make changes to this law a priority for business and job growth in the state. That said, as our state leaders work to pass a comprehensive budget, we are working with our advisors and board of directors to explore all options regarding the company's future in the state."
New Hampshire Governor Maggie Hassan's veto message regarding HB 550:
"By the authority vested in me, pursuant to part II, Article 44 of the New Hampshire Constitution, on July 20, 2015, I have vetoed House Bill 550, relative to administration of the tobacco tax and relative to the sale or exchange of an interest in a business organization under the business profits tax.
"Like many others, I am disturbed by the process that brought this bill to my desk. It was passed at the last moment, with no public hearing before the vote. That defective process has understandably raised concerns among members of the legislature and the public. However, I remain open to considering legislation similar to House Bill 550 as part of a larger budget agreement if this tax law change it proposes is paid for.
"New Hampshire's absence of a sales or income tax has long served to our state's advantage in attracting businesses and people to our state. It has, however, also led to the development of some areas of our tax code that are unique, which can at times be confusing to outside observers. I have heard from a number of businesses that New Hampshire should work to mitigate the impact of such provisions, particularly those that House Bill 550 seeks to address, because at times these provisions can hinder capital investment in New Hampshire companies. I remain willing and open to work in a bipartisan manner to address this concern.
"House Bill 550 also suffers from the same problem as the budget that I recently vetoed. It encompasses a significant tax cut that will impact this budget and future budgets without addressing how New Hampshire will pay for it. Cutting taxes without offsetting the loss in revenue will jeopardize our state's ability to invest in the priorities that are critical to our state's families, businesses and our future in the 21st century innovation economy. Many of the same businesses who have expressed support for legislation similar to House Bill 550 have also raised concerns about New Hampshire losing the ability to support the critical economic priorities necessary to keep our state competitive, priorities such as affordable higher education, modern and safe transportation, accessible health care, and combating the substance abuse crisis.
"As long as the tax cut House Bill 550 contemplates is paid for, I am willing to address the tax relief it proposes, as well as the larger issue of business tax reductions, in a compromise budget that ensures that we make these reductions in a way that does not jeopardize our state's economic priorities and future.
"It is my continued hope that legislative leaders will promptly return to the table and negotiate in good faith a bipartisan budget compromise, so that we can move forward and address the issues of House Bill 550, as well as the other critical issues facing our state.
"In the meantime, however, we cannot continue to enact business tax reductions without transparently and honestly paying for them in budget. For this reason, I have vetoed HB 550."
Republican state Sen. Andy Sanborn's statement to the Union-Leader:
"This is no longer about Planet Fitness; it's about every single company in New Hampshire that dreams of becoming really successful, and the governor just told them, 'No thanks. Don't want you here."
Democratic state Sen. Dan Feltes' statement to the Union Leader:
"This began as an 11th hour special request of one company and one former governor with a profit-sharing interest in that company ... But as written, HB 550 not only reopened a tax loophole that was closed in 1989, it would have created a much bigger tax loophole. While we should always be looking for ways to help startup companies, erasing a major feature of our business tax code means failed investments in education, health care and infrastructure, or higher local property taxes for everyday Granite Staters. Neither is helpful to move our economy forward."
Senate Majority Leader Jeb Bradley in a statement to The Associated Press:
"This bill eliminates a huge disincentive for start-ups here in New Hampshire. Hundreds of good jobs are at stake, and we want a tax code that attracts start-ups to our state."