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DRA warns land-value tax bill would require major IT and staffing work, likely not ready until 2028
Summary
At a Jan. 23 Municipal & County Government Committee hearing, Department of Revenue Administration staff said House Bill 1417 — which would let New Hampshire towns adopt land-value taxation — raises significant implementation and cost questions, including an estimated one-time systems conversion north of $1 million and an earliest practicable effective year of 2028.
Representative Karasinski introduced House Bill 1417, a measure that would permit municipalities to adopt a land-value tax system that separates land and improvement values for taxation.
Jennifer Ramsey, tax policy counsel for the Department of Revenue Administration, told the committee the bill would require large technical changes to state and local systems. “We don't believe it would be possible to implement the bill before tax year 2028,” Ramsey said, adding that the Department’s municipal rate-setting portal cannot currently process the proposed new data and that conversion to the Department’s revenue information management system would be costly. Ramsey estimated the one-time conversion could be “somewhere in excess of $1,000,000.”
Adam Denoncourt, identified in testimony as the director of DRA’s municipal and property division, said the department needs clearer statutory language on who would set rates under the proposed system. He told the committee the draft appears ambiguous about whether towns or the DRA would set land versus improvement tax rates and asked for clarification.
Committee members pressed DRA staff on municipal capacity, assessor training and whether existing local assessment software used by New Hampshire’s roughly 259 taxing districts could be adapted. DRA witnesses said many towns manage their own vendor contracts and that the change would likely require significant reprogramming or replacement of local systems.
Members also questioned the bill’s appropriation, noting the bill as filed included a $1 placeholder. DRA warned that the placeholder would be far short of actual implementation costs and that training materials and personnel impacts have not been fully estimated. Ramsey said the department could provide more detailed cost estimates if the bill’s rate-setting and effective-date language were clarified.
The committee closed public testimony on HB 1417 after remote and in-room comment sheets were reported.
