Saturday, May 30, 2015

Planet Fitness CEO Says Taxes May Drive Him Out Of N.H.

( The following is from NH Public Radio. An interesting counterpoint is this article from The Tax Foundation which claims NH has the 7th best business tax climate in the country.)
One day after Planet Fitness announced it was going public, the New Hampshire-based gym tells legislators it might not be able to afford to stay in the state.Senate Majority Leader Jeb Bradley introduced a measure Wednesday hoping to keep the company here, by exempting businesses from being taxed on the share they sell to a corporate partner once they go public.
Currently 200 corporate jobs would be lost if the company moved headquarters. The company, which began in Dover in 1992, has more than 950 locations nationwide.
CEO Chris Rondeau says he wants to stay but the tax is too big a burden. “It would be cheaper to pay the raise to cover an income tax to move across the border. It’s that great of a tax that its hard as a CEO to recommend staying,” he told the Senate Finance Committee on Wednesday.
Former Governor of N.H. Craig Benson, who referred to himself as an informal company advisor, spoke in favor of the measure.
Bill Ardinger, a tax attorney from Rath, Young and Piganelli, also testified. He urged legislators that without a change to the provision start-up companies will be discouraged from moving into New Hampshire.
But Revenue Commissioner John Beardmore says this move is not equitable. “Our concern is that this amendment to the provision erodes fairness and creates what could be going forward a loophole available to other businesses who are sophisticated enough and valued enough to avoid a provision of the tax,” Beardmore told the committee.
Senate President Chuck Morse later proposed his own amendment saying it is a working progress, but hopes the change will promote more businesses to come to the state.

2 comments:

Eric Taussig said...

I for one am sick and tired of the sort of blackmail Planet is attempting to use to obtain a financial benefit for a company at the expense of every taxpayer in NH. The idea that by going public with your threats will obtain relief by pressuring elected officials is a repugnant concept that unfortunately thrives too well, not just in NH, but all over the country.

This is no different from various sports teams threatening to move unless a city builds them a stadium at taxpayer expense.

Companies may have rights but they don't vote to elect legislators or the Governor. Planet has officers and shareholders who perhaps reside in NH and are eligible to vote and write letters and get publicity by making threats, but I for one say, LET PLANET GO. Let some other state subsidize Planet's public offering.

I am certain that without a sufficient population base, Planet will not erect more gyms that likely push out smaller facilities that really represent small business. Will Planet erect a facility in the Lakes Region that will push out the smaller fitness facilities operated by small business operators who are not trying to cash in their assets by going public? If the demographic study is positive it will happen, but I for one am not worried that the State will be adversely affected by losing a few "highly" paid employees that we don't tax anyway, as there is no State income tax.

Anonymous said...

I agree completely with Eric. Say no to corporate blackmail. Our business climate is not all doom and gloom.