Fiscal watchdog criticizes New Hampshire’s plan for a ‘paint tax’

Fiscal watchdog groups are slamming New Hampshire lawmakers for advancing a plan to set a new surcharge on paint sales, saying the move would damage the state’s tax-free reputation and drive up costs for consumers.House Bill 451 would create a voluntary program allowing consumers to bring old paint and paint cans to Home Depot and other retailers for recycling. The costs would be covered by a new “fee” on paint cans ranging from around 30 cents to $2.45, according to the proposal. The bipartisan measure is awaiting action by Gov. Kelly Ayotte after House and Senate lawmakers approved the bill earlier this week.
Backers of the plan say the proposed paint can recycling program would help improve the environment and ease the cost of local governments for getting rid of unused paint, which can contaminate soil and bodies of water if improperly dumped.
“We want hazardous waste disposed of in a proper fashion and not the old-fashioned way: dumped in your backyard,” state Sen. Tim Lang, R-Sanbornton, said in recent remarks on the bill. “The way I look at this, this is a tax avoidance bill, and it’s changing it from a tax on everybody to a fee on the people that caused the problem.”
But the New Hampshire chapter of Americans for Prosperity blasted the move as a “tax” and said it would create a “costly regulation” for paint manufacturers that will ultimately be passed along to Granite State consumers.
Sarah Scott, AFP-NH deputy state director, said the legislation is another so-called ‘assessment’ that will tag a mandatory fee onto every can of paint sold to fund a recycling program for unused paint.
“Calling a tax a fee will not change the reality that Granite Staters will pay more at the register, especially small business owners, homeowners, and contractors,” she said in a statement. “New Hampshire is known for its low tax and light regulation reputation. The passage of this legislation undermines that reputation by expanding regulatory oversight that will raise costs for consumers.”
The group Americans for Tax Reform also panned the legislation, calling it a “solution in search of a problem” and pointed out local governments in New Hampshire have “successfully” dealt with the problem of old paint for decades with so-called “Hazardous Waste Days” that allow residents to drop off paint cans for disposal.
“There is no need to create a new government program specifically for paint – or a new tax to fund it,” the group said. “Requiring a surcharge for all consumers who buy a certain product may be a more effective way to collect tax dollars, but it still, on net, brings in more money for the government, all while requiring more bureaucrats working more hours to administer the program.”
Passage of the bill comes as a Legislature’s Republican majority also considers plans to cut the state’s corporate and business taxes as part of broader efforts to maintain the so-called New Hampshire competitive “advantage” over other states. New Hampshire has no state sales tax or individual income tax.
“No matter what you call it, a tax is a tax” Americans for Tax Reform said. “New Hampshire is known for its low-tax, small-government approach to social issues, and it ought to maintain that reputation by rejecting the Paint Tax and any other “nuisance taxes” that may be small, but bring increased costs, bureaucracy, and harm to specific constituencies.”

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