'No Sales Tax!' Ayotte Vetos So-Called Paint Tax Bill

By Michael Graham, NH Journal

Brushing off GOP support in the State House, Gov. Kelly Ayotte rolled over the legislature and vetoed the so-called “paint tax,” reiterating her anti-tax stance in advance of November’s general election.

“No Sales Tax!” Ayotte wrote in red pen underneath her veto.

The bill, HB 451, passed both the House and Senate earlier this year. It created a Paint Product Stewardship Program operated by PaintCare, a nonprofit industry organization. Advocates argued that it simply implemented a self-funded process for disposing of empty paint cans.

The program would be financed by a mandatory surcharge added to the retail price of every container of paint sold in New Hampshire. Early estimates suggested fees of around $0.75 per quart, $1.75 per gallon, and $3 for larger containers.

“This is a bipartisan bill that is supported by the paint industry, providing a way for consumers to recycle leftover paint and paint cans that will ensure the proper disposal of hazardous waste, keeping it out of landfills and preventing pollution of our water systems,” Sen. Tim Lang (R-Sanbornton) told NHJournal in January.

Ayotte, and many of Lang’s fellow Republicans, didn’t agree.

Ayotte told the NHJournal podcast earlier this year that she believed the bill’s net impact was to add a new tax.

“I have a pretty simple principle: No sales tax — not now, not ever,” Ayotte said. “I think that this bill looks like a sales tax. It acts like a sales tax on paint. If you walk like a duck, you quack like a duck, you are a duck.

“So from my perspective, I don’t think the duck’s going to make it.”

After the bill was vetoed, state Senate President Sharon Carson (R-Londonderry) said Ayotte did the right thing.

“New Hampshire Republicans do not support new taxes,” Carson told NHJournal. “And the timing is terrible. Because of the work on housing we’ve been doing, there’s a 20 percent increase in housing starts. That means more people looking for paint for their new homes. We don’t need this.”

The veto was a defeat for the powerful New Hampshire Municipal Association, which supported the legislation.

It pointed to data indicating that roughly 10 percent of all purchased paint goes unused. The program’s goal is to manage that surplus efficiently. This “stewardship” model, supporters argued, wasn’t a tax because the revenue would be collected and managed by a nonprofit—not the state government—and used solely to run the collection program. Proponents project that the program could save New Hampshire municipalities between $1 million and $1.3 million annually in waste disposal expenses.

But free market groups like Americans for Prosperity-New Hampshire opposed the paint proposal from the beginning. They celebrated Ayotte’s veto.

“Gov. Ayotte has stepped in and done what the legislature should have done and put an end to an unnecessary new tax on the backs of hard-working Granite State families,” said Sarah Scott, AFP-NH Deputy State Director. “At a time when everyone is feeling the heat of rising prices and working to turn nickels into dimes, the governor is proving to be the champion we need to make New Hampshire more affordable.”

While a handful of Republicans broke with their party to get the bill to Ayotte’s desk, the overall political impact is likely to be positive for the GOP. With prominent Democrats like Andru Volinsky promoting an income tax to fund state education, and Democrats in the legislature voting overwhelmingly against a ban on future income taxes, Ayotte’s veto is yet another reminder of the divide between the two parties on the tax issue.

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.