Partnering with a Professional Employer Organization (PEO) makes great sense for business owners. Recent studies have shown that PEOs help small businesses grow and keep turnover low and survival high. Given that the PEO industry continues to gain favor in the small business community, and state legislators see the need to help support local businesses, it would seem to follow that businesses who partner with a PEO should be eligible for all tax incentives to which they would be entitled absent a relationship with a PEO. In most every state, this is the case. In New England, each state recognized the importance of this practice, with one notable exception – New Hampshire.
But on July 7, New Hampshire Governor Maggie Hassan ended this practice by signing a bill that allows businesses who partner with PEOs to claim the Business Enterprise Tax Credit. Granite State businesses are required to pay a tax equal to 0.75% of payroll. However, the amount paid can be used by the business as an offset to taxes paid on profits. Prior to passage of this bill, only the PEO could claim the credit. Now, PEO clients can claim the credit, which we believe was the general intent of legislators when the Business Enterprise Tax was implemented.
At Genesis, we felt it was time to right this wrong and the National Association of Professional Employer Organizations (NAPEO) agreed. The effort put forth by Genesis, other NAPEO members in New England and Melissa Kelly (NAPEO’s Director of State Government Affairs) helped right this wrong. Genesis President, Diane Stevenson, helped spearhead the effort and was instrumental in the bill’s passage. Stevenson, along with Genesis Controller Kara Yeater, testified before legislators and helped rally support from businesses that were affected. News of passage of the bill was carried by the Boston Globe.
Small businesses drive the economy, and PEOs drive small business. We see passage of this bill as an important development that will ensure that the New Hampshire business community has full unencumbered access to PEO services. It’s about time.
For more information on this topic, please reach out to Genesis HR Solutions at AskUs@genesishrsolutions.com or 800-367-8367.
Genesis HR Solutions is the premier PEO provider for Massachusetts based businesses.