CHAPTER Rev 2400
BUSINESS
Statutory
Authority: RSA 21-J:13, I; 77-E:1, XVII;
77-E:11, II
PART
Rev 2401 DEFINITIONS
Rev 2401.01 “Affiliated group” means:
(a) Affiliated group
as defined in RSA 77-E:3, II, for corporate enterprises; or
(b) A group of
non-corporate business enterprises, if the chain of business enterprises is
connected through ownership with a common business enterprise, provided that:
(1) The common parent business enterprise owns
directly at least 80% of the total ownership interest in at least one of the
includible business enterprises; and
(2) An ownership interest with at least 80% of
the total ownership interest is owned directly by one or more of the other
includible business enterprises.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev
2401.02
“Base of operation” means, in the case of an employee, the place from which
the employee regularly:
(a) Starts work and
to which he or she customarily returns in order to receive instructions from
the employer;
(b) Communicates
with customers or other persons; or
(c)
Performs other functions necessary in the exercise of his or her trade
or profession.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2401.03)
Rev 2401.03 “Capital” means the amount personally
contributed to the business enterprise by the owners in exchange for their
proprietary interest in the enterprise plus the amounts subsequently
contributed by such individuals less any amounts withdrawn from the enterprise
by the owners.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2401.05)
Rev 2401.04 “Costs of performance” means the direct costs
of providing the service or activity determined in a manner consistent with
generally accepted accounting principles and in accordance with accepted conditions
or practices in the trade or business of the business enterprise.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2401.07)
Rev 2401.05 “Distributions” means a
transfer of money or property
from a business enterprise to its owners related to their ownership
interest.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2401.08)
Rev 2401.06 “Internal Revenue Code (IRC)” means the
United States Internal Revenue Code as defined in RSA 77-E:1, XVII.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (formerly Rev 2401.12)
Rev 2401.07 “Net earnings from
self-employment” means the gross income derived by a business enterprise from
trade or business carried on by the enterprise less deductions, not including
those for guaranteed payments, allowed by chapter 1 of the IRC and attributable
to such trade or business.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (formerly Rev 2401.13)
Rev 2401.08 “Personal investment activities”, as used in
RSA 77-E:1, VI(f), means the actions taken by one or more individuals, or
charitable remainder trusts, to place personal capital or wealth in such a way
as to secure income or profit from its employment without the individual or
trust becoming involved in the activities of a trade or business, or the rental
of property, other than the rental of a residence or vacation home to the
beneficiaries or grantors of the trust, in which the capital is placed.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (formerly Rev 2401.16)
Rev 2401.09 “Real and tangible personal property”, as
used in RSA 77-E:4,I, means land, buildings, improvements, equipment,
merchandise or manufacturing inventories, leasehold improvements, and other
similar property that reflects the enterprise's business activities.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (formerly Rev 2401.18)
Rev 2401.10 “Revenue producing activity”,
as used in RSA 77-E:4, I(c) (3):
(a)
Means the transactions and activities engaged in by the business
enterprise for the ultimate purpose of obtaining gain or profit and includes,
but is not limited to:
(1) The rendering of personal services by
employees or the utilization of tangible and intangible property by the
business enterprise in performing a service;
(2) The sale, rental, leasing, or other use of
real property;
(3) The sale, rental, leasing, licensing, or other
use of tangible personal property; or
(4) The sale, licensing or other use of
intangible personal property; and
(b)
Does not include:
(1) Transactions and activities performed for the
business enterprise by independent contractors or other similar persons or
entities; or
(2) The mere holding of a security interest in
intangible property.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (formerly Rev 2401.19)
Rev 2401.11 “State” means:
(a)
Any state of the
(b)
The
(c)
The
(d)
A territory or possession of the
(e)
Any foreign country or political subdivision thereof.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss
by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (formerly Rev 2401.21)
PART Rev 2402
COMPUTATION OF THE
Rev 2402.01 Compensation Element.
(a)
The following shall be included in the compensation element:
(1) Wages subject to federal income tax
withholding included on an employee's federal form W-2, Wage and Tax
Statement;
(2) Compensation specifically exempt from federal
withholding such as, but not limited to, contributions by the employer on
behalf of employees to:
a. Qualified pension, profit-sharing and stock
bonus plans under IRC section 401; or
b. Annuity or deferred-payment plans under IRC
sections 403 and 404;
(3) Fringe benefits provided to, and included in
the gross income of employees for federal income tax purposes, unless such
benefits are excluded under (b), or are included in gross income solely because
the recipient is a partner or shareholder of an "S" corporation;
(4) Imputed interest on a below-market rate loan
between an employer and employee to which IRC section 7872 applies;
(5) The amount taken as a deduction for the
personal services of a proprietor, partner, or member for business
profits tax purposes;
(6) The net earnings from self employment, not
including:
a. The individual’s distributive share from a
trade or business conducted by another business enterprise;
b. The amount included under (a)(5); or
c. Net losses from self-employment;
(7) The amount reported as guaranteed payments to
partners on the partnership's federal income tax return if such amount has not
been included under (5);
(8) Wages paid to statutory employees, in
accordance with IRC section 3121(d) (3) who file federal form schedule C and do
not have an employer-employee relationship;
(9) Wages paid to an employee for qualified
research and development services reported as a credit and not deducted as an
expense by the business enterprise under IRC section 41; and
(10) Wages paid, under RSA 277-B:9, XI, by an employee
leasing company to its leased employees.
(b)
Payments in the form of, or for,
services identified in IRC section 3401(a) (1), (9), (10), (13), (14),
(15), (16), (18), (19), or (20) shall not be considered compensation for
purposes of the compensation element or apportionment.
(c)
Compensation paid or accrued for an employee, employed by an affiliated
group of business enterprises and performing services for multiple members,
shall be included in the compensation element of the entity which:
(1) Is subject to tax in
(2) Deducts the individual's compensation for
federal income tax purposes provided that:
a. The compensation amount is not included
within a management fee charged to the affiliate;
b. The enterprise issuing the individual's
federal form W-2, “Wage and Tax Statement”, charges the affiliate for the
actual payroll expenditures; and
c. All affiliated enterprises maintain
detailed records to substantiate the amount of compensation paid or accrued for
each employee and how such compensation was recorded and deducted by the
various affiliates.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2402.02 Interest Element.
(a)
Interest, as defined in RSA 77-E:1, XI, shall be included in the
interest element when it is recognized as an expense for financial
accounting purposes of the enterprise without regard to:
(1) Any limitation on deductibility for federal
income tax purposes; or
(2) The capitalization requirements provided in
IRC section 263A.
(b)
The interest element shall not be reduced by any interest income or
other fee income received for the use of its money or property.
(c)
When an amount of property is actually transferred by a business
enterprise and is not classified as interest, but the substance of the
transaction or the relatedness of the parties indicates that the payment
was made in lieu of interest, then an amount of interest shall be deemed to
have been paid. The amount of deemed
interest shall be equal to the amount paid which is in excess of the fair
market value of the property transferred.
(d) Imputed interest, pursuant to IRC section
7872, relative to treatment of loans at below market interest rates, shall be
included in the interest element.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss
by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2402.03 Dividend Element.
(a)
The following transactions between a business enterprise and its owners
shall be a dividend:
(1) Property transferred from a business enterprise
to an owner with respect to the owner's ownership interest from the accumulated
revenues and profits of the enterprise as defined by RSA 77-E:1, I;
(2) Personal expenditures made by a business
enterprise on behalf of an owner except those properly reported as compensation
to the owner for federal income tax purposes;
(3) Forgiveness of an owner's indebtedness to the
business enterprise unless the amount is:
a. Reported as compensation or interest to the
individual for federal income tax purposes; and
b. Included in the compensation or interest
elements of the enterprise value tax base;
(4) Automatic re-investment of property deemed
distributed to the owners from accumulated profits into additional stock of the
enterprise; or
(5) Imputed interest on a below market interest
rate loan under IRC section 7872.
(b)
When property, other than money, is distributed as a dividend,
the computation of the dividend amount paid to the owner shall be measured by
the property's fair market value determined as of the date of the distribution.
(c)
All distributions by a business enterprise to its owners shall be
presumed to be made, sequentially from:
(1) The current year profits of the enterprise;
(2) The accumulated revenues and profits of the
enterprise; and
(3) The capital of the enterprise.
(d)
Distributions made by “S” corporations shall be a dividend to be
included in the dividend element when the distribution is from:
(1) The accumulated adjustment account or the
previously taxed income categories; and
(2) Earnings and profits of the corporation
accumulated prior to the “S” corporation election being made.
(e)
An “S” corporation shall treat an item of income or expense under
federal income tax provisions in arriving at the accumulated revenues and
profits of the enterprise, in a manner consistent with that of the “C”
corporation.
(f)
For corporate business enterprises, other than "S"
corporations, the current earnings and profits of the enterprise shall be
determined as they are for federal income tax purposes.
(g) The accumulated revenues
and profits of a non-corporate business enterprise shall be the total
undistributed net income from all business activities since the inception of
operations.
(h) Any undistributed net income retained
by the business enterprise and considered capital for federal income tax
purposes shall not be considered as such for purposes of the business
enterprise tax.
(i)
Amounts deducted under RSA 77-A:4, III, for the personal services of the
proprietor or partners shall:
(1) Be a deduction in determining the net
income from business activities; and
(2) Not be included in the dividend element.
(j)
Distributions made by a business enterprise in liquidation or in
complete redemption of an owner's interest in the enterprise shall not be
considered as a dividend for business enterprise tax purposes.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2402.04 Grantor Trusts.
(a)
The grantor of a grantor trust shall include the compensation, interest,
and dividends of the trust within its own enterprise value tax base.
(b)
For purposes of both the enterprise
value tax base and the apportionment factor in instances where
a grantor trust has only a portion of its activity considered business
activity, the grantor trust shall only be required to report the compensation, interest
and dividends associated with the business activity portion of the enterprise’s
activities.
(c)
The exclusion provided by RSA 77-E:1,VI(f), shall apply to a grantor
trust that is subject to taxation under section 641 or described in section 664
of the IRC to the extent that such trust limits its activities to personal
investment activities as described in Rev 2401.08.
(d)
When a grantor of a grantor trust has no other activity beyond that of
the trust subject to the business enterprise tax, the grantor shall be deemed
to be a business enterprise and required to report the compensation, interest
and dividends of the grantor trust.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev
2402.05 Business Enterprises, Exempt
from Tax Under IRC Section 501(c)(3), with Unrelated Business Income.
(a) For purposes of the enterprise value tax
base, the exempt business enterprise shall report on the applicable Form
BET, “Business Enterprise Tax Return”, the activity associated with the
unrelated business income portion of the business enterprise’s activities
reported on federal form 990T.
(b) The organization shall allocate, when there
is an overlap between the activities, the compensation and interest between the
unrelated business income and exempt activities by basing:
(1) Compensation on the hours spent performing
services for the unrelated business activity in relation to the total hours
worked; and
(2) Interest on the portion of loan proceeds used
for the unrelated business activities in relation to the total loans
outstanding.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2402.06 Business Enterprises Whose Income or
Expenses are Federally Reportable by the Owners. Business enterprises, other than grantor
trusts, whose income or expenses are reportable by the true owners for federal
income tax purposes, shall include all items associated with the enterprise
value tax base in its business enterprise tax return.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2402.07 Non-applicability of Federal Immunity
Provision. Since the business
enterprise tax is not based on the net
income or capital stock of the enterprise, the provisions of 15 USC section
381, P.L. 86-272 shall not apply to a business enterprise whose business
activities are limited to the mere solicitation of orders for the sale of
tangible property.
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
PART Rev 2403
ADJUSTMENTS TO THE
Rev 2403.01 Net Earnings from Self-Employment Retained
in the Business
(a)
A business enterprise may deduct from its enterprise value tax base, the
amount of net earnings from self-employment which:
(1) Are retained and used for the reasonable
needs of the enterprise; and
(2) Have previously been, or are currently being,
taxed under RSA 77-A as the business profits of the enterprise.
(b)
The reasonable needs of the enterprise shall not include the following:
(1) The total amount of any deduction taken for
the personal services of a proprietor or partner for business profits tax
purposes under RSA 77-A:4, III; or
(2) The amount of funds loaned by the business
enterprise to the proprietor, partners or any directly or indirectly related
party under the provisions of the IRC.
(c)
The business enterprise shall maintain accounting records that are
sufficient to analyze all transactions between the business enterprise
and:
(1) The owner;
(2) Any related party under the provisions of the
IRC; and
(3) The amount of funds needed by the enterprise
for its current and future operations.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2403.02 Dividend Received Deduction.
(a)
The dividends received from a member of an affiliated group of business
enterprises eligible for the deduction shall be limited to that portion of the
dividend included in the payor’s taxable enterprise value tax base.
(b) The business enterprise
shall maintain detailed accounting records to:
(1) Document that any dividends deducted from the
enterprise value tax base of the recipient business enterprise have been previously
included in the enterprise value tax
base of the payor; and
(2) Calculate the accumulated earnings and
profits of the payor.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2403.03 Utilization of Deductions in Arriving at
the Taxable Amount of the
(a) The deduction allowed for compensation from self
employment income retained in the business as provided in RSA 77-E:3, I,
shall be deducted from the compensation element of the tax base to arrive at
the compensation amount subject to the apportionment factor.
(b)
The deduction allowed for dividends received from members of an
affiliated group of business enterprises as provided in RSA 77-E:3, II and III,
shall be deducted from the dividend element of the tax base to arrive at the
dividend amount subject to the apportionment factor.
(c)
In instances where a business enterprise, entitled to a dividend
deduction, has not paid dividends to its owners, the business enterprise shall:
(1) Apportion the dividend deduction using the
apportionment factor determined in accordance with Rev 2404.06; and
(2) Use such apportioned amount as an offset to
either:
a. The taxable compensation portion of the tax
base; or
b. The taxable interest portions of the tax
base.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2403.04)
PART Rev 2404
APPORTIONMENT OF THE
Rev 2404.01 Definitions. For purposes of this Part, the following
definitions shall apply:
(a)
“Business entity” means a business enterprise and the terms may be used
interchangeably;
(b)
“Material distortions” means the interest apportionment factor computed
using monthly averages is 25% greater or lesser than the factor computed using
the beginning and ending average; and
(c)
“Order” means a determination signed by the commissioner requiring use
of the modified apportionment formula in instances when:
(1) The current apportionment formula does not
accurately reflect the business enterprise’s business activity; or
(2) It is a result of an adjudicative proceeding;
and
(d)
“Service provider” means an employee, officer, director, proprietor,
partner, or member of a business entity who provides services to that entity.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2404.02 Availability or
Requirement of Apportionment for a Business
(a)
A
(1) Its business activities are conducted both within
and without
(2) The business enterprise's activities were
sufficient in another state for that state to impose a:
a. Net income tax;
b. Franchise tax based upon net income;
c. Capital stock tax;
d. Business privilege tax; or
e. Tax of the type imposed by RSA 77-E.
(b)
A business enterprise shall file Form BET-80, “Business Enterprise Tax
Apportionment”, with the applicable Form BET described in Rev 2407.03, to apportion
its New Hampshire business activity in accordance with RSA 77-E:4.
(c)
A business enterprise, which is a member of a combined group required to
apportion its New Hampshire business activity, in accordance with RSA 77-E:4,
shall file Form BET-80-WE, “Business Enterprise Tax Apportionment for
Individual Nexus Members of a Combined Group”, with Form BET-WE, “Business
Enterprise Tax Return for Combined Groups”.
(d)
A business enterprise not domiciled in
(e)
A business enterprise shall not apportion a portion of its income to
another state when:
(1) Its activities within the other state were
not sufficient for that state to impose the taxes referred in (a)(2) above;
(2) It pays a minimal fee for qualifying to do
business within that state; or
(3) It
files and pays a tax, referred to in (a)(2) above, which was not legally
required.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2404.02)
Rev 2404.03 Apportionment for Grantor Trust Activity. A grantor of a grantor trust shall include
the apportionment factor information of the trust within its own compensation, interest
and dividend factors.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2404.02)
Rev 2404.04 Compensation Apportionment Factor.
(a)
The compensation apportionment factor shall include:
(1) The total amount of compensation, as
described in Rev 2402.01, paid or
accrued to all of the following in a business enterprise:
a. Employees;
b. Officers;
c. Directors;
d. Partners; or
e. LLC members.
(2) The net earnings from self-employment, less
that portion of earnings retained for use in the business by the owner and the
amount included in (a)(3) below; and
(3) The amount deducted as compensation for the
personal services of a proprietor, partner, or member under RSA 77-A:4, III,
for purposes of the business profits tax.
(b)
The total amount of compensation paid to employees shall be determined
based on:
(1)
The business enterprise's method of
accounting; or
(2) The wages reported on the employer's
state unemployment wage reports.
(c)
The method selected in (b), above, shall be used in a consistent manner.
(d)
If the method in (b) is changed, adjustments shall be made to prevent
the inclusion of the identical wages in the compensation factor for more than
one taxable period.
(e)
Payment made to, or on behalf of, independent contractors shall not be
included in a business enterprise's compensation apportionment factor.
(f)
Employees performing services for an affiliated group shall be included
in the compensation apportionment factor of the entity which:
(1) Issues the individual's federal form W-2,
“Wage and Tax Statement”; or
(2) Deducts the individual's compensation for
federal income tax purposes provided that:
a. The compensation amount is not included
within a management fee charged to the affiliate;
b. The enterprise issuing the individual's
federal form W-2 only charges the affiliate for the actual payroll
expenditures; and
c. All affiliated enterprises maintain detailed
records to substantiate the amount of compensation paid or accrued for each
employee and how such compensation was recorded and deducted by the various affiliates.
(g)
The compensation of an employee, officer, director, or personal services
of proprietor, partner, or member shall be included in
(1) The service provider’s base of operation is
located in
(2) The service provider’s activities are
controlled from within
(3)
a. There is no base of operation; and
b. The location from which the service
provider’s activities are controlled cannot be determined.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2404.03)
Rev 2404.05 Interest Apportionment Factor.
(a)
The interest apportionment factor shall include:
(1) All the real property and tangible personal
property, as defined in Rev 2401.09;
(2) Property that is:
a. Actually used, is available for, or capable
of being used, during the taxable period in the regular course of the trade or
business of the business enterprise;
b. Used
in the regular course of business shall remain in the property
factor until its permanent withdrawal from use; or
c. In transit with the property being included
in the numerator of the destination state; and
(3) The value of moveable or mobile property,
such as construction equipment and common carrier vehicles, with the value
being determined for purposes of the factor on the total time or miles within a
state during the period.
(b)
Property, other than inventory, owned by the business enterprise shall
be valued at its original cost which is deemed to be the basis of the property
for federal income tax purposes at the time of acquisition prior to any federal
adjustments and adjusted by subsequent sale, exchange, abandonment, or other
such disposition.
(c)
Inventory shall be included in the interest apportionment factor
in accordance with the valuation method used for federal income tax purposes.
(d)
Real and tangible personal property rented or leased by the business
enterprise shall not be included in the interest apportionment factor.
(e)
The beginning and ending average value of owned property shall be used
for the interest apportionment factor unless material distortions of the factor
are caused by:
(1) Fluctuations in values existing during the
period; or
(2) The acquisition or disposition of significant
property during the period.
(f)
Business enterprises having material distortions caused by the use of a
beginning and ending average value shall calculate the value of their property
for apportionment purposes using a monthly average.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2404.04)
Rev 2404.06 Dividends Apportionment Factor.
(a)
Revenue-producing activity shall include:
(1) Any transaction, procedure, or operation
directly engaged in by a business enterprise resulting in a separately
identifiable item of income; or
(2) The performance of any activity creating an
obligation of a particular customer to pay specific consideration to the
business enterprise.
(b)
The denominator of the sales portion of the dividends apportionment
factor shall include the following:
(1) Sales less returns and allowances;
(2) Dividends which are not eligible for the
dividend deduction under RSA 77-E:3, II and III;
(3) Other interest;
(4) Rental income;
(5) Royalties;
(6) Capital gain income;
(7) Net gains or losses; and
(8) Other income, unless the other income is
properly includible as a reduction of an expense or allowance.
(c)
The numerator of the sales portion for each business enterprise shall
include:
(1) Sales of tangible personal property delivered
in
(2) Sales of tangible personal property
originating in New Hampshire to a purchaser in another state in which the
business enterprise is not taxable or subject to tax;
(3) Sales of tangible personal property
originating in
(4) Interest on installment receivables where the
debtor or the encumbered property is located in
(5) Gross receipts from the:
a. Lease, rental, or other use of real or
personal property located in
b. Licensing or other use of intangible property
when such property is used within
c. Personal services performed in
(6)
Gains
from the sale of property located in
(7) Dividend
income received by business enterprises domiciled in
(8) Other income earned in
(d)
Sales price shall include:
(1) All interest;
(2) Carrying charge or time-price differential
charges; and
(3) Excise taxes passed on to the buyer or
included as part of the selling price of the product.
(e)
The rental, lease, licensing or other use of tangible or intangible
personal property in
(f)
When a revenue producing activity results from the use of
personal property within and without
(1) The time the property was used in New Hampshire
as compared to the total time of use of the property everywhere during that
taxable period when the amount of time is the most appropriate measure under
the specific facts and circumstances of the business enterprise’s activities; or
(2) The distance traveled or covered in New
Hampshire as compared to the total distance traveled or covered everywhere
during the taxable period when distance is the most appropriate measure under
the specific facts and circumstances of the business enterprise’s activities.
(g)
Personal services performed in
(h)
Personal services shall be attributed to
(1) The activity is completely performed in
(2) The activity is performed in New Hampshire
is a dependent component of a service performed both within and without New
Hampshire and a greater proportion of the costs directly associated with
performing such service are incurred in New Hampshire.
(i)
In determining the costs directly associated with the performance of the
service in (h), above, the business enterprise shall allocate all compensation
costs, including benefits, of personnel performing the service based on the
amount of time spent performing the service in
(j)
Expenses incurred in obtaining or retaining customers or clients,
including contract negotiations, shall not be costs directly associated with
the performance of the service.
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2404.05)
Rev 2404.07 Modification of Apportionment Provisions.
(a)
A business enterprise seeking to modify the statutory
apportionment formulas provided in RSA 77-E:4 shall, prior to using a modified
formula, petition the commissioner in writing.
(b)
The petition for modification of the apportionment formula shall be:
(1) Submitted separately and not attached to a
tax return being filed; and
(2) Mailed to:
Commissioner
New
Hampshire Department of Revenue Administration
(c)
A petition shall include:
(1) The business enterprise’s:
a. Full name and address;
b. Federal identification number;
c. Department identification number, if any; and
d. Taxpayer representative’s power of attorney,
if applicable;
(2) A full and precise statement of the business
activity and the necessity for the modification;
(3) Evidence supporting the business enterprise's
petition including:
a. Any court decisions and administrative rules
on the matter; and
b. True
copies of all contracts, deeds, agreements, instruments or other documents
which evidence the necessity of the modification;
(4) Reference to the statutory provisions
relating to the subject of the petition;
(5) A description of the modified formula
proposed by the business enterprise; and
(6) A statement whether, to the best of
the petitioner's knowledge, the modification is the subject of prior petition
requests of a similar or identical factual nature.
(d) The use of a separate accounting result,
which differs from the standard apportionment result, shall not be deemed to
demonstrate conclusively the need for, or the acceptability of, a modified
apportionment formula.
(e) The information in the petition shall be
reviewed by the director of audit to determine whether the requested
modification measures the activity being conducted in
(f)
The petitioner shall receive the determination signed by the
director of audit.
(g) If the petitioner is aggrieved by the
determination, the petitioner may appeal the determination within 60 days after
the date of the determination letter by requesting a hearing on the petition in
the same manner as an adjudicative proceeding, involving the administration,
assessment or refund of taxes, governed by Rev 200.
(h) The use of a modified apportionment formula
by a business enterprise without the prior written approval of the department,
or order from the commissioner, shall:
(1) Constitute a willful violation of RSA 77-E:4;
and
(2) Not be considered filed for purposes of RSA
77-E:5, RSA 77-E:1, XII, and Rev 2407 until
approval has been obtained from the department, or ordered by the
commissioner.
(i)
A copy of the commissioner's order or a department’s approval letter
shall be attached to all subsequently filed returns.
(j)
Once
a modified apportionment formula has been approved by the department or ordered
by the commissioner, it shall remain in effect in its entirety until:
(1) Another modification petition has been
approved; or
(2) Another modification has been ordered by the
commissioner.
(k) The business
enterprise may petition for, or the commissioner may order, another
modification when further adjustments are necessary.
Source.
#9065, eff 1-10-08 (from Rev 2404.06)
PART Rev 2405
COMPUTATION OF TAX, PAYMENTS, REFUNDS AND CARRYOVER OF CREDIT
Rev 2405.01 Payments of Liabilities.
(a)
When a business enterprise
has a payment due with any document, such payment shall be submitted:
(1) With the document when the business
enterprise is not participating in the department’s electronic funds transfer
program; or
(2) Separately from the return when participating
in the electronic funds transfer program.
(b)
A business enterprise with a tax liability under one dollar shall not be
required to remit the payment; however, the return shall be filed.
(c)
The payment of the business enterprise tax shall be made on, or before,
the prescribed payment date defined in RSA 77-E:1, XIII.
(d)
An extension of time to file the return shall not extend the time for
the payment of the tax.
(e)
The department shall apply any overpayment of the business profits tax
estimated payments against the business enterprise tax liability.
(f)
Checks or money orders submitted as payments shall be payable to the
State of
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2405.02 Estimated Taxes.
(a)
A business enterprise having an annual projected tax liability in
excess of $200 shall:
(1) File the applicable estimated tax form:
a. Form NH-1040-ES, “Estimated Proprietorship Business
Tax”;
b. Form NH-1041-ES “Estimated Fiduciary Business
Tax”;
c. Form NH-1065-ES, “Estimated Partnership
Business Tax”; or
d. Form NH-1120-ES, “Estimated Corporation
Business Tax”; and
(2) Make 4 payments of 25% on such annually projected
liability on or before the fifteenth day of the fourth, sixth, ninth, and the
twelfth months of the tax year.
(b)
When an annually projected tax liability in excess of $200 is determined
in a quarter subsequent to the first quarter, the initial estimated tax payment
shall equal the cumulative amount payable as of that quarter as if the
liability had been determined in the first quarter.
(c)
Estimated tax liabilities of a water’s edge combined group, as defined
in RSA 77-A:1, XV, shall be:
(1) Determined for the combined group as a whole;
and
(2) Paid by the principal
Source.
#5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2405.03 Application of an Overpayment.
(a)
An overpayment of tax, verified by the department, shall be treated in
the following sequence:
(1) Applied to offset any other tax liability of
the business enterprise or the water’s edge combined group, in accordance with
RSA 21-J:28-a, IV;
(2) Refunded to the taxpayer;
(3) Credited to the estimated tax for the
following year, if indicated on Form BT-Summary, “Business Tax Summary”, by the
business enterprise or the water’s edge combined group; or,
(4) A combination of (2) and (3), above, if
indicated on Form BT-Summary, “Business Tax Summary” by the business enterprise
or the water’s edge combined group.
(b) A business enterprise, which incorrectly
files and makes payment of estimated taxes, but is not required to file a tax
return and has no other New Hampshire tax liability, shall file Form
BT-Summary, “Business Tax Summary”, with the department to request a refund
pursuant to RSA 21-J:29 I, (b).
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2405.04 Carryover of Unused Credits Resulting From
Changes in Form of Business.
(a)
The surviving entity involved in a merger may utilize unused business
enterprise tax credits of the merged companies.
(b)
The surviving entity involved in a merger shall determine the expiration
date of unused credits based on the original carryover periods of the credits
obtained in the merger.
(c)
A business enterprise which changes its form of conducting business,
such as the incorporation of a proprietorship, shall:
(1) Not lose the unused business enterprise tax
credits available to it at the time of change; and
(2) Determine the expiration date of all unused
credits based on the original carryover periods of the credits.
Source.
#7178, eff 12-23-99 (from Rev 2405.02), EXPIRED: 12-23-07
New. #9065, eff 1-10-08
PART
Rev 2406 CREDITS ALLOWED AGAINST
TAX LIABILITY
Rev
2406.01 Credits Allowed Against the
Business Profits Tax. The business
enterprise tax credit against the business profits tax shall only be taken by a
business organization having the same federal employer identification number or
social security number as the business enterprise liable for the business
enterprise tax, except as referenced in Rev 2405.03.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2406.02 Credits Allowed Against the Business
(a) A community development finance authority
investment tax credit, pursuant to RSA 162-L:10;
(b) An economic revitalization zone credit,
pursuant to RSA 162-N:6; and
(c) The unused portion of the research and
development credit, pursuant to RSA 162-P:1.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
rpld by #7178, eff 12-23-99
New. #9065, eff 1-10-08 (from Rev 2406.01)
Rev 2406.03 Community Development Finance Authority
Investment Tax Credit.
(a)
A business organization qualified for the credit under RSA 162-L:10
shall be allowed a credit for the amount available based on its contributions
against either its:
(1) Business profits tax liability; or
(2) Business enterprise tax liability.
(b)
Any amount of the investment tax credit applied first against the
business profits tax shall not be used as a credit against the business
enterprise tax.
(c)
Any amount of the investment tax credit applied first against the
business enterprise tax shall:
(1) Be considered business enterprise tax paid;
and
(2) Not be available as a credit against the
business profits tax, except to the extent it is a credit against the business
enterprise tax.
(d)
In addition to the filing requirements under Rev 2407.02, a copy of the
following documents shall be attached to the business enterprise tax return:
(1) The authorization letter from
(2) Whichever of the following forms is
applicable:
a. Form DP-160, Schedule CR, “Schedule of
Business Profits Tax Credits”; or
b. Form DP-160, Schedule CR, “Schedule of
Business Profits Tax Credits for Combined Groups”.
Source.
#9065, eff 1-10-08
Rev 2406.04 Economic Revitalization Zone Credits.
(a)
Economic revitalization zone tax credits, pursuant to RSA 162-N:7, may
be allowed as a credit against either:
(1) The business profits tax liability; or
(2) The business enterprise tax liability.
(b)
Economic revitalization zone tax credits applied first against the
business profits tax shall not be available as a credit against the business
enterprise tax.
(c)
Economic revitalization zone tax credits applied first against the
business enterprise tax shall:
(1) Be considered business enterprise tax paid;
and
(2) Not be available as a credit against the
business profits tax, except to the extent it is a credit against the business
enterprise tax.
(d)
In addition to the filing requirements under Rev 2407.02, a copy of the
following documents shall be attached to the business enterprise tax return:
(1) The authorization letter from the
(2) Whichever of the following forms is
applicable:
a. Form DP-160, Schedule CR, “Schedule of
Business Profits Tax Credits”; or.
b. Form DP-160-WE, Schedule CR, “Schedule of
Business Profits Tax Credits for Combined Groups”.
Source.
#9065, eff 1-10-08
Rev 2406.05 Research and Development Tax Credit.
(a)
A business enterprise shall complete and file Form DP-165 “Research
& Development Tax Credit Application”, with the commissioner by June 30,
following the taxable period, to apply for the research and development tax
credit pursuant to RSA 77-A:5, XIII-a.
(b)
Any unused research and development tax credit not applied against the
business profits tax liability may be used to offset the taxpayer’s business
enterprise tax liability as provided on RSA 77-A:5, XII.
(c)
Any wages included in the calculation of the research and development
tax credit shall be included in the compensation element of the enterprise
value tax base pursuant to RSA 77-A:5, XIII (b).
(d)
Taxpayers making estimated tax payments resulting in overpayments after
applying the credits may request a refund for the overpayments on its Form
BT-Summary, “Business Tax Summary”.
Source.
#9065, eff 1-10-08
PART Rev 2407
RETURNS, EXTENSIONS AND DECLARATIONS
Rev 2407.01 Timeliness.
(a)
Returns, extensions and declarations shall be timely filed in accordance
with Rev 2904.03.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2407.02 Filing.
(a)
A business enterprise required to file a business profits tax return
shall file its business enterprise tax return
with its business profits tax return and Form BT-Summary, “Business Tax
Summary”.
(b)
A business enterprise shall attach a clear and legible copy of their
federal income tax return with the business enterprise tax return.
(c)
A business enterprise, other than a single member entity, electing, under
the U.S. Department of the Treasury's Treasury Decision 8697, to be taxed as a
corporation or partnership for federal income tax purposes, shall:
(1) Comply with all federal income tax
regulations relating to such election;
(2) File its New Hampshire business enterprise
tax returns based on the entity type selected for federal income tax purposes;
and
(3) Attach:
a. A copy of Federal Form 8832, if required to be filed with the Internal
Revenue Service; or
b. A statement that the business enterprise has
accepted the federal default treatment of being taxed as a partnership.
(d)
An entity electing, for federal income tax purposes the
provisions under the U.S. Department of the Treasury's Treasury Decision 8697,
shall:
(1) Not include the income or expenses of the
entity within the member's business enterprise tax return as provided under RSA
77-E:1, III; and
(2) File its business enterprise tax
return using:
a. Form BET, “Business Enterprise Tax Return for
Corporations, Partnerships, Fiduciaries, and Non-Profit Organizations”, if a member is a corporation, partnership, trust
or non-profit organization; or
b. Form BET-PROP, “Proprietorship Business
Enterprise Tax Return,” if the member is an individual.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2407.01)
Rev 2407.03 Tax Returns.
(a)
Corporations, subchapter “S” corporations and associations required to
file a federal corporate tax return shall file Form BET, “Business Enterprise Tax
Return for Corporations, Partnerships, Fiduciaries and Non-Profit
Organizations”, on, or before, the 15th day of the 3rd month following the end
of their taxable period.
(b) Partnerships or business
enterprises required to file a federal partnership return, except members of a
combined group conducting a unitary business, shall file Form BET, “Business
Enterprise Tax Return for Corporations, Partnerships, Fiduciaries, and
Non-Profit Organizations”, on, or before, the 15th day of the 4th month following
the end of their taxable period.
(c)
Proprietorships, except members of a combined group conducting a
unitary business, shall file a Form BET-PROP “Proprietorship Business
Enterprise Tax Return”, on or before the 15th day of the 4th month following the
end of their taxable period.
(d)
Trusts and estates, except members of a combined group conducting
a unitary business, that are exempt for federal income tax purposes but required to file business enterprise tax
returns, and non-profit organizations, other than certain 501(c) (3)
organizations specifically exempt from filing under RSA 77-E:1, III, shall file
Form BET, “Business Enterprise Tax Return for Corporations, Partnerships,
Fiduciaries and Non-Profit Organizations” on or before the 15th day of the 5th
month following the close of their taxable period.
(e)
Members of a combined group conducting a unitary business shall file
Form BET-WE, “Business Enterprise Tax Return for Combined Groups”, on the 15th
day of the third month following the close of their taxable period.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2407.02)
Rev 2407.04 Amended Returns.
(a)
A business enterprise amending its business enterprise tax return
for reasons other than an Internal Revenue Service audit change, shall file the
applicable Form BET, “Business Enterprise Tax Return”, and Form BT-Summary, “Business
Tax Summary”, for the particular taxable period.
(b)
Amended business enterprise tax returns not requesting a refund or
credit shall be filed within 3 years of the prescribed filing date for the
original return as provided by RSA 21-J:29.
(c) Amended business
enterprise tax returns requesting a refund or credit shall be filed within 3
years of the prescribed payment date for the tax or within 2 years from the
date the tax was actually paid, whichever is later.
(d)
The 2 year period from the date the tax was actually paid shall not be
applicable to an amended return requesting a refund or credit where the payment
of tax, interest or penalty paid was a result of an assessment or a demand for
payment as provided by RSA 21-J:29.
(e)
Business enterprises shall attach a copy of the applicable federal
income tax return to their amended business enterprise tax return.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-9, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2407.03)
Rev 2407.05 Short Period Returns.
(a)
A business enterprise whose taxable period is less than 12 months shall
file the applicable
(b)
Short period returns shall be filed by the 15th day following the close
of the business enterprise's taxable period of:
(1) The third month for corporations; and
(2) The fourth month for all other entities.
(c) A business enterprise may request an
extension of time to file a short period return in accordance with Rev 2407.07.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2407.04)
Rev 2407.06 Corrections Resulting
From Internal Revenue Service Audit Changes.
(a)
Business enterprises shall report all federal audit changes, as provided
in RSA 77-E:9, with the department’s audit division when such changes finally
have been determined by filing:
(1) The applicable entity type Form DP-87,
“Business Tax Report of Change for IRS Adjustment Only”; and
(2) Attaching a clear and legible copy of:
a. The federal revenue agent's report;
b. Closing agreement; and
c. Court decision, where applicable.
(b)
For purposes of this section, federal audit changes finally shall have
been determined when:
(1) The business enterprise has made payment to
the IRS on any additional income tax liability resulting from the federal audit
and has not filed a petition for redetermination or claim for refund for
the portions of the audit on which payment was made;
(2) The business enterprise received a refund
from the U.S. Department of the Treasury resulting from the federal audit;
(3) The business enterprise signed federal form
870 or other Internal Revenue Service form consenting to the deficiency or
accepting any over-assessment;
(4) The business enterprise’s time period for
filing its federal petition for redetermination to the United States Tax Court
expired;
(5) The business enterprise entered into a
closing agreement with the Internal Revenue Service as provided in section 7121 of the Internal Revenue Code as
amended; or
(6) The business enterprise has received a
decision from the U.S. Tax Court, U.S.
(c)
A separate Form DP-87, “Business Tax Report of Change for IRS Adjustment
Only,” as described in (a) (1) above, shall be filed for each:
(1) Business enterprise; and
(2) Taxable period affected by the federal audit.
(d)
The form in (c) above shall be submitted to the department’s
audit division under separate cover that is not attached to, bound with,
or accompanied by any other state of New Hampshire return or document.
(e)
Payment of any additional liability shall accompany Form DP-87,
“Business Tax Report of Change for IRS Adjustment Only”.
(f)
The statute of limitations shall be opened only for a federal audit
change on a return for the items of compensation, interest or dividends,
pursuant to RSA 77-E:9, that are directly affected by the specific changes
within the federal revenue agent’s report, closing agreement or court decision.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2407.05)
Rev 2407.07 Extension of Time to File Returns.
(a)
A business enterprise which has paid 100% of the business enterprise tax
determined to be due by the prescribed due date shall be allowed an automatic 7
month extension of time, pursuant to RSA 77-E:8, to file a return without
filing an extension application.
(b)
A business enterprise which has not paid the business enterprise tax
determined to be due through estimated payments shall pay the additional amount
due on or before the prescribed payment date.
(c)
Extensions shall be denied for non compliance with (a) and (b) above.
(d)
An extension of time for filing a business enterprise tax return shall
not extend the time for the payment of the tax.
(e)
Payments not made by the prescribed payment date shall be subject to the
interest and penalty provisions of RSA 21-J.
(f) Form BT-EXT, “Payment Form and Application
for 7 Month Extension of Time to File Business Tax Return”, shall, prior to the
due dates:
(1) Be filed with:
New Hampshire Department
of Revenue Administration
Document Processing
Division
(2) Include the payment of any additional tax
liability.
Source.
#9065, eff 1-10-08 (from Rev 2407.06)
PART Rev 2408
ADMINISTRATION
Rev 2408.01 Taxpayer Records and Information.
(a)
Every business enterprise shall maintain all information:
(1) Necessary to establish the amount of
compensation paid or accrued, net earnings from self-employment, interest paid
or accrued, dividends paid, and
(2) Required to be shown on any return, schedule
or attachment required under RSA 77-E and any rules adopted to implement the
business enterprise tax.
(b)
The information required by (a) above shall include, but not be limited
to, the following:
(1) General ledger;
(2) Cash receipts records;
(3) Cash disbursements records;
(4) Sales records;
(5) Payroll records;
(6) Bank statements with all enclosures;
(7) Paid and unpaid invoices from vendors;
(8) Correspondence, contracts or other agreements;
(9) Federal tax returns and all schedules
attached or required to be attached thereto;
(10) State and local tax returns and all schedules
attached or required to be attached thereto for all jurisdictions in which the
business enterprise has activities; and
(11) Agreements between the enterprise and its
owners or shareholders.
(c)
The information may be maintained in either a formal or informal nature
such as in a worksheet format provided that such worksheets shall be the basis
for the preparation of any financial statements and federal or state tax
returns.
(d)
The information shall be retained for a minimum period of 5 years from
the date the returns were filed or until the completion of all:
(1) Audits commenced by the department;
(2) Administrative appeals pending before the
department; and
(3) Judicial proceedings pending between the
business enterprise and the department.
(e)
Business enterprises shall provide the commissioner or authorized
representatives access to:
(1) All information, listed in (b) above,
necessary to establish the amount of compensation paid or accrued, net earnings
from self-employment, guaranteed payments, interest paid or accrued,
dividends paid, or any other information required to be shown on any return,
schedule or attachment required under RSA 77-E and any rules adopted to
implement the business enterprise tax;
(2) Key company personnel, officers or employees,
for interviews, where applicable, upon advance notice and at times during the regular business day
relative to substantial knowledge of and access to documentation on:
a. Compensation policies;
b. Financing policies;
c. Profit centers or other methods of allocating
income and expense among related parties;
d. Methods of factor determination; or
e. Other data needed to establish a business
enterprise's proper tax liability;
(3) Minutes of meetings for the business
enterprise’s:
a. Board of directors;
b. Audit committee;
c. Compensation committee;
d. Finance committee; and
e. Other similar committees or subcommittees of
the board;
(4) Consolidated or separate federal income tax
returns and related schedules and exhibits as filed with the United States
Internal Revenue Service including Internal Revenue Service form 5471 or other
similar document for each taxable period under audit;
(5) Annual financial statement and supporting
schedules, including consolidating workpapers for each taxable period under
audit;
(6) Reconciliation between net income from
financial statements and net income per books on Schedule M of the federal
income tax return as filed with the United States Internal Revenue Service for
each taxable period under audit;
(7) Schedules of sales, payroll and property by
state and supporting documentation that can be tied to the respective
denominators for each taxable period under audit; and
(8) Unemployment and withholding returns, as
applicable, for each taxable period under audit, filed with:
a.
The United States Internal Revenue
Service for each taxable period under audit; and
b. The
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2408.02 Confidentiality of Department Records.
(a)
All business enterprise tax returns and information shall be
confidential pursuant to Rev 2903.02 (a).
(b)
The department shall make a disclosure or allow a representative to act
on behalf of the business enterprise pursuant to Rev 2903.02 (b).
(c) Taxpayers shall
provide their federal identification number or numbers on all tax returns and
related documents pursuant to Rev 2903.02 (c).
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2408.03 Informal Conference.
(a)
The purpose of an informal conference shall be to discuss the department
findings with taxpayers and department personnel in an effort to reach an
agreement on the issues of fact or results, or both.
(b)
At the conclusion of an audit or department review, when the facts and
circumstances of the audit or review indicate to the department that an
informal conference would benefit the state and the business enterprise, the
business enterprise may request and the division shall provide an informal
conference with the business enterprise, or its authorized representative.
(c)
The division shall notify the business enterprise or the authorized
representative by mail of:
(1) The date, time and location for the
conference; and
(2) The information needed in advance of the
informal conference and its due date.
(d)
The information specified in (c)(2), above, shall include:
(1) The name, address and identification number
of the business enterprise;
(2) An outline of the areas of agreement and
disagreement;
(3) Documentation in support of the business
enterprise’s position such as:
a. Citations of supporting case law;
b. Statutory or regulatory provisions; and
c. Documents or correspondence from unrelated
parties;
(4) Responses to outstanding questions raised by
the department during the audit or
review; and
(5) The names of the individuals who shall
participate in the conference on behalf of the business enterprise.
(e)
Upon completing a review of material provided during the informal
conference, the department shall determine the appropriate disposition of the
audit or review.
Source. INTERIM
#5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178,
eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
PART
Rev 2409 CERTIFICATIONS
Rev
2409.01 Business
(a) A business enterprise seeking a request for
certification shall:
(1) Complete and file Form AU–22, “Certification
Request Form”, with the department; and
(2) Include, pursuant to RSA 77-E:12, the fee by
check, made payable to the State of
(3) Pursuant to RSA 77-E:12, I (a), have paid all
taxes, interest and penalties.
(b)
The non-refundable fee, established under RSA77-E:12, for the
certification statements shall be considered fully expended when:
(1) The requested certification statement is
issued to the business enterprise; or
(2) The business enterprise, or its authorized
representative, is notified that the department is unable to issue the required
certification statement and the reason why it cannot do so.
(c) A request for the
certification statement signed by someone other than a corporate officer,
general partner, managing member, or the proprietor, shall be accompanied by:
(1) A power of attorney; or
(2) A letter, signed by the taxpayer, indicating:
a. The name, address, and federal identification
number of the person designated to act as the business enterprise's authorized
representative for this matter; and
b. The extent of the authority granted to the
person regarding this matter.
(d)
The petitioner shall receive the requested certification if the
commissioner determines that no returns, tax, additions to tax, interest, or
penalties for taxes administered by the department are due and unpaid.
(e)
Certification statements shall be mailed to the business enterprise
unless the request authorizes the department to send the statement to someone
other than the business enterprise.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2409.02 Certification of Good Standing.
(a)
A business enterprise seeking the issuance of a certification statement
of good standing from the State of
(1) Returns due but have not yet been filed with
the department; and
(2) A copy of the federal tax return, as filed
with the IRS.
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2409.03 Certification for Dissolution. A business enterprise which is dissolving and
seeking a certification statement of dissolution shall, in addition to the
information in Rev 2409.01 (a) and (c), submit to the department:
(a)
A final
(b) A clear and legible copy
of federal form 966, corporate dissolution or liquidation;
(c)
Clear and legible copies of all federal forms 4797 and 6252 filed
pertaining to the sale of corporate assets and any other schedule that is
required to show the breakdown of the sale of assets;
(d)
A copy of the corporate minutes adopting the liquidation, describing the
disposition of the corporate assets; and
(e)
A copy of the plan of liquidation, if one exists.
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2409.04 Certification for Withdrawal. As provided in RSA 77-E:12, II, a business
enterprise seeking a certification statement for withdrawal that the business
enterprise has adequately provided for all state tax liabilities administered
by the department of revenue administration shall, in addition to the
information in Rev 2409.01 (a) and (c), submit to the department:
(a)
An explanation for the withdrawal;
(b)
A copy of federal form 966, if a plan of liquidation has been adopted;
and
(c) A final
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2409.05 Certification for Cancellation of LLC. A business enterprise seeking a certification
for cancellation of either a domestic or foreign LLC shall, in addition to the
information in Rev 2409.01(a) and (c), submit to the department:
(a)
A final
(b)
Clear and legible copies of all federal forms 4797 and 6252 filed
pertaining to the sale of assets and any other schedule that is required to
show the breakdown of the sale of assets; and
(c)
A copy of the plan of liquidation, if one exists.
Source.
#7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
PART Rev 2410
APPLICATION OF PENALTIES
Rev 2410.01 Substantial Understatement of Tax Penalty.
(a)
The department shall assess the 25% penalty for understatement of tax
provided by RSA 21-J:33-a on returns where the understatement exceeds the
greater of 10% of the correct tax liability or $5,000 unless the business
enterprise:
(1) Adequately disclosed the relevant facts
regarding the tax treatment of the item generating the understatement; or
(2) Had substantial authority for its tax
treatment of such item.
(b)
A business enterprise shall have adequately disclosed the tax treatment
of an item on the return or in a statement attached to the front of the return
if:
(1) The statement contains:
a. A prominent caption identifying the statement
as a disclosure of the tax treatment for the substantial underpayment penalty
provided in RSA 21-J:33-a; and
b. Those facts affecting the tax treatment of
the item will apprise the department of the potential controversy or a concise
description of the legal issues presented by the facts in question;
(2) The item for which the disclosure is made is
clearly identified; and
(3) The dollar amount of the item is disclosed.
(c)
A business enterprise shall have substantial authority for the tax
treatment of an item if the weight of the authorities supporting the treatment
of the item is substantial in relation to the weight of the authorities
supporting the position of the department.
(d)
The department shall consider the following as authoritative sources of
substantial authority for items specific to the application of the business
enterprise tax:
(1) Any
(2) Department rules;
(3) Declaratory rulings issued to the business
enterprise;
(4) Department technical information releases;
(5) Superior court and board of tax and land
appeals decisions;
(7)
(8) New Hampshire Legislative committee reports
specifying legislative intent; and
(9) Written advice from the department issued to
the business enterprise about the tax treatment of the item in question.
(e)
The department shall consider the following as authoritative sources of
substantial authority in arriving at the enterprise value tax base that are included in federal
taxable income before any state required adjustments:
(1) Internal Revenue Code and other statutory
provisions;
(2) Temporary and final United States Department
of the Treasury regulations;
(3)
Federal
or state court cases;
(4) Internal Revenue Service or United States
Department of the Treasury administrative pronouncements including revenue
rulings and revenue procedures;
(5) Tax
treaties and related regulations, as well as the United States Department of
the Treasury's or other official explanation of such treaties;
(6) Congressional
intent as reflected in Committee Reports, joint explanatory statements of
managers included in the conference committee reports and floor statements made
by the bill's managers prior to enactment;
(7) Controlling
precedent of the United States Court of Appeals to which the business
enterprise has a right of appeal;
(8) Technical advice memoranda, ruling or
determination letter issued to the business enterprise or in which the business
enterprise is named;
(9) An affirmative statement in a revenue agent's
report with respect to the business enterprise’s prior taxable periods; and
(10) Any source accepted by the Internal Revenue
Service as substantial authority.
(f) The following shall not
be considered authoritative sources:
(1) Opinions by tax professionals;
(2) Tax publication opinions or narrative
statements; and
(3) Articles contained in professional or tax
periodicals.
(g) The existence of
substantial authority for a particular item shall be determined as of the date
the return containing the item was filed or as of the last day of the taxable
period to which the return relates, whichever is later.
(h) The penalty shall be
applied to the net understatement determined by reducing the understatement, as
defined in RSA 21-J:33-a, III, by the portion of the understatement for which
the business enterprise had substantial authority or had adequately disclosed
the position taken on the return.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2410.02 Understatement of Taxpayer's Liability by
Tax Preparer Penalty.
(a)
For purposes of RSA 21-J:33-b, I, "substantial portion" means
any instance where the efforts of the tax preparer have affected more than 25%
of the business enterprise's tax liability.
(b)
An individual or company providing more than mechanical assistance shall be deemed to be a
tax preparer when the individual or company uses computer software to
make determinations about the:
(1) Applicability of tax laws or characterization
of income; and
(2) Allowability of deductions or credits.
(c)
The penalty provided in RSA 21-J:33-b, III, shall be assessed when any
part of an understatement of tax is the result of a tax preparer's willful
neglect or intentional disregard of the statute or departmental rules unless
the business enterprise has adequately disclosed the tax treatment of an
item on the return or in a statement attached to the front of the return as
provided in Rev 2410.01(b).
(d)
A tax preparer shall be deemed to have acted with willful neglect or
intentional disregard when the preparer fails:
(1) To comply with a statutory provision
interpreted in an opinion of the
(2) To comply with a department rule prescribing
the appropriate tax treatment of an item contained in the business enterprise
tax return; or
(3) Review a statute, rule or court case that
addresses the proper treatment of an item or issue.
(e)
The penalty provided in RSA 21-J:33-b, IV shall be applied when any part
of an understatement of tax is the result of a preparer's willful attempt to
understate the business enterprise’s tax liability.
(f)
A tax preparer shall be deemed to have made a willful attempt to
understate a tax liability of a business enterprise by:
(1) Disregarding or misstating information
furnished by the business enterprise, or other person in an attempt to reduce
the tax liability; or
(2) Not inquiring of the business enterprise or
other person when the preparer knows or should have known that the information
provided was incorrect or incomplete.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Rev 2410.03 Aiding and Abetting an Understatement of
Tax Liability Penalty.
(a)
The penalty provided in RSA 21-J:33-c shall be assessed against any person
who aids, assists in, procures or advises in the preparation of any return or
document in connection with the business enterprise tax law or departmental
rules if the person knows that:
(1) The information provided will be used in the
preparation of any material document; and
(2) If used, the information will result in an
understatement of tax liability.
(b)
The penalty shall not be assessed when the business enterprise
adequately disclosed the relevant facts regarding the tax treatment of the item
in the manner provided in Rev 2410.01(b).
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
PART
Rev 2411 BUSINESS
Rev 2411.01 Availability of Forms.
(a)
Forms may be obtained:
(1) Online at www.revenue.nh.gov;
(2) By calling the forms line at 603-271-2192; or
(3) By requesting them, in writing, from:
New
Hampshire Department of Revenue Administration
Document
Processing Division
(b) Business enterprise tax forms listed on www.revenue.nh.gov/forms may be
filled in on line, signed and submitted to the department.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-9494; ss by #5774, eff
1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.02)
Rev 2411.02 Form BT-EXT, Payment Form and Application
for 7 Month Extension of Time to File
Business Tax Return.
(a)
Business enterprises that have not paid 100% of their tax liability and
need an extension to file their business enterprise tax return shall:
(1) Pay the remainder of their tax liability; and
(2) File Form BT-EXT, “Payment Form and Application for 7 Month Extension of Time to File Business Tax
Return”, in accordance with RSA 77-E:8 on or before the original due date of
the applicable tax return or returns.
(b)
Business enterprises that have paid 100% of their tax liability and need
an extension to file their business enterprise tax return, shall be granted a 7
month extension to file their tax return without filing Form BT-EXT, “Payment
Form and Application for 7 Month Extension of Time to File Business Tax
Return”.
(c)
A granted extension of time shall extend the due date of the return, not
the due date of any payment.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.05)
Rev 2411.03 Form BT-SUMMARY, Business Tax Summary.
(a)
Form BT-SUMMARY, “Business Tax Summary”, shall be filed by
business enterprises to report all business enterprise tax liabilities, interest,
penalties and payments to the department.
(b)
Business enterprises shall attach:
(1) The required business enterprise tax return
and business profits tax return to Form BT-SUMMARY; and
(2) Copies of the federal forms and schedules used
to support the information being reported as provided for in Part Rev 2408.
Source.
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94;
amd by #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev
2411.02), EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.06)
Rev 2411.04 Form BET, Business
(a)
Form BET, “Business Enterprise
Tax Return for Corporations, Partnerships, Fiduciaries and Non-Profit
Organizations”, shall be filed by corporations, partnerships, trusts, estates,
and non-profit business enterprises to report their business enterprise tax
liability in compliance with RSA 77-E:5.
(b)
Business enterprises preparing Form BET shall attach it to Form
BT-SUMMARY.
Source.
#6130, eff 11-23-95; ss and moved by #7178, eff
12-23-99 (from Rev 2411.03), EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.07)
Rev 2411.05 Form BET-PROP, Proprietorship Business
(a)
Form BET-PROP, Proprietorship Business Enterprise Tax
Return”, shall be filed by proprietorships to report their business
enterprise tax liability in compliance with RSA 77-E:5.
(b)
Proprietorships preparing Form
BET-PROP shall attach it to Form BT-SUMMARY.
Source.
#6130, eff 11-23-95; ss and moved by #7178, eff
12-23-99 (from Rev 2411.04), EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.08)
Rev 2411.06 Form BET-80, Business
(a)
Form BET-80, “Business Enterprise Tax Apportionment”, shall be filed by
business enterprises required to apportion their New Hampshire business
activity in accordance with RSA 77-E:4.
(b)
Business enterprises preparing Form BET-80 shall attach it to
Form BET.
Source.
#6130, eff 11-23-95; ss and moved by #7178, eff
12-23-99 (from Rev 2411.05), EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.09)
Rev 2411.07 Form BET-WE, Business
(a)
Form BET-WE, “Business Enterprise Tax Return for Combined Groups”, shall
be filed by a combined group required to file on a combined basis, in
accordance with RSA 77-E:5.
(b)
Business enterprises preparing Form BET-WE shall attach Form BET-WE to
Form BT-SUMMARY.
Source.
#6130, eff 11-23-95; ss and moved by #7178, eff
12-23-99 (from Rev 2411.06), EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2411.10)
Rev 2411.08 Form BET-80-WE,
Business
(a)
Form BET-80-WE, “Business Enterprise Tax Apportionment for Individual
Nexus Members of a Combined Group”, shall be filed by combined business
enterprises required to apportion their New Hampshire business activity, in
accordance with RSA 77-E:4.