CHAPTER Rev 900 INTEREST AND DIVIDENDS TAX
PART Rev 901 DEFINITIONS
Rev
901.01 "Accumulated profits" means the total undistributed earnings
of the organization from whatever source derived.
Source. #2758, eff 6-15-84; ss by #2881, eff 10-19-84; ss by
#4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by
#8137, eff 8-10-04
Rev
901.02 "Beneficial interest in which is not represented by transferable
shares", as used in RSA 77:3, I(b), means an
interest in an organization:
(a)
Where the shares, equity interests and all ownership rights are not
transferable without obtaining prior member approval or causing a dissolution
of the organization; and
(b)
Which is not a:
(1) Corporation;
(2)
Joint stock company;
(3) Business trust;
(4) Common law
trust;
(5)
(6) Real estate
investment trust;
(7) Homeowners or
condominium association; or
(8)
Limited liability company.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.03 "Beneficial interest in which is represented by transferable
shares", as used in RSA 77:4, III, means an interest in an organization:
(a)
Which is a:
(1) Business trust;
(2) Common law
trust;
(3)
(4) Real estate
investment trust; or
(5) Homeowners or
condominium association;
(b) Where property is placed in the hands of
a trustee, who:
(1) Acts apart from
the beneficiaries; and
(2) Manages and
deals with the property, as principal, for the use and benefit of the
beneficiaries who hold shares; and
(c)
Where the shares, equity interests and all ownership rights are freely
transferable without the necessity of securing prior member approval or causing
a dissolution of the organization.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.04 "Capital" as used in RSA 77:7, means the amount personally
invested in the organization by the shareholders or interest-holders in
exchange for their interest in the organization.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.05 "Corporation" means an artificial person or legal entity
created under the laws of incorporation of any state or foreign country without
recognizing the distinctions between types of corporations such as those drawn
in the Internal Revenue Code of 1986 between S corporations and other
corporations.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.06 "Distributions" means a transfer of property from an
organization to its shareholders or interest-holders solely as a result of
their ownership interest in such organization.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.07 "Dividend" means an amount of property distributed, with
respect to their ownership interest, other than in liquidation of the
organization, to shareholders or interest-holders of an organization from:
(a)
Current year profit; or
(b)
Accumulated profits of such entity.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.08 "Earnings" means the excess income received by an organization
after the payment of its expenses.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.09 "Fair market value" means the price property would command if:
(a)
Sold by a seller who is willing, but not compelled, to sell; and
(b)
Purchased by a purchaser who is willing, but not compelled, to purchase.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.10 "Federal identification number" means:
(a)
Social security number;
(b)
Federal employer identification number;
(c)
Preparer tax identification number;
(d)
Individual tax identification number; or
(e)
Department identification number.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.11 "Interest" means the amount of money or other property
actually or constructively received as compensation for the use of money
measured at the fair market value of the property received.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.12 "Organization" means:
(a)
A corporation;
(b)
A business trust;
(c)
An estate;
(d)
A trust;
(e)
A partnership;
(f)
An association;
(g)
Two or more persons having a joint or common business interest;
(h)
Limited liability corporation; or
(i)
Any other legal or commercial entity.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.13 "Part year resident" means a person who has permanently:
(a)
Established residency in
(b)
Abandoned residency in
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.14 "Part year return" means a return filed by a part year
resident.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
901.15 "Stock dividend" as used in RSA 77:4, II and III means a
distribution paid to shareholders in newly issued stock of the same
organization.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 901.16)
Rev
901.16 "Tax year" means the calendar year, the fiscal year or that
portion of a year for which the taxpayer's federal income tax return is filed.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 901.17)
Rev
901.17 "Transferable" as used in RSA 77:3,I(b) and RSA 77:4, III,
means the ability of a shareholder or interest holder in an organization to
dispose of, by any means, all rights incidental to his interest without a
required approval of the disposition by another member, and without dissolution
of the organization itself.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 901.18)
Rev
901.18 "Usual place of business" as used in RSA 77:14 and 16 means
the primary place of business or a regularly used place of business of an
organization.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 901.19)
PART Rev 902 RESIDENCY AND TAXABILITY OF
SPECIAL ENTITIES
Rev
902.01 Residency, Establishment of Intent.
An individual's intent to establish residency by an ongoing physical presence
within
(a)
Maintaining a home or other living quarters in
(b)
Spending a greater percentage of time in
(c)
Having family living with them in
(d)
Advising any federal, state, or local agency that the individual considers
herself or himself a resident of
(e)
Being employed or conducting business activity within
(f)
Registering to vote in
Source. #2228, eff 12-28-82; ss by #2881, eff 10-19-84; ss by
#4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by
#8137, eff 8-10-04
Rev 902.02 Part Year Residency. A person claiming to
be a New Hampshire part year resident shall provide documentation using the
same criteria in Rev 902.01, above, showing an intent to reside in another
state for a portion of the year.
Source. #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by
#8137, eff 8-10-04
Rev
902.03 Absence From State.
(a)
A person being temporarily absent from his or her state of residence shall not
be considered a part year resident.
(b)
A temporary absence from the state of residence shall exist when a person is in
another state or country on:
(1) An employment
assignment of limited duration after which the person returns to his or her
regular place of employment or another temporary assignment;
(2) Seasonal trips
resulting from a desire to be in a different climate from his or her state of
residence;
(3) Trips of varied
duration visiting friends, relatives or various parts of the country or world;
or
(4) Other similar
absences where the person does not effect an establishment of intent to be a
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
902.04
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
902.05 Treatment of Mutual Funds and Their
Investors. The taxation of mutual funds and their investors under RSA 77,
except such funds that are qualified investment companies under RSA 77-A: 1,
XXI, and their holders, shall be determined by the status of the investor's
shares or interests as either:
(a) Shares which are transferable, in which case:
(1) The mutual fund
shall not be subject to the tax; and
(2) The individual
investors shall be taxable and required to file tax returns; or
(b)
Shares which are not transferable, in which case:
(1) The mutual fund
shall be taxable and required to file tax returns; and
(2) The individual
investors shall not be subject to the tax as to the interest and dividend
income received by the fund until distributed.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from Rev 902.04)
Rev
902.06 Mutual Funds.
(a)
Mutual funds shall be presumed:
(1) To be
organizations incorporated under the laws of
(2) Comprised of
ownership interests that are represented by transferable shares.
(b)
Mutual funds shall not be required to:
(1) File a return;
(2) Pay a tax; or
(3) Use the
allocation of income provisions of RSA 77:12 or RSA 77:16.
(c)
Investors in mutual funds shall be taxable if they are:
(1)
(2) Partnerships,
associations and trusts within the scope of RSA 77:3, II; or
(3) Fiduciaries,
deriving their appointment from a court of this state within the scope of RSA
77:3, III.
(d)
Amounts received from such funds by investors on all investments shall be
taxable dividends except for:
(1)
(2) Direct
obligations of the United States Government.
(e)
Amounts received from such funds by investors on all investments in
(f)
Investors receiving distributions from mutual funds that invest in
(1) Reported to the
investor by the mutual fund as interest from
(2) Determined by
multiplying the total amount received by a fraction:
a. The numerator of
which shall be the amount of interest on New Hampshire direct or municipal
obligations and direct obligations of the United States Government received by
the mutual fund; and
b. The denominator
of which shall be the total amount of income received by the mutual fund from
all activities; or
(3) Determined by
multiplying the total amount received by the mutual fund's percentage of assets
invested in
(g)
To rebut the presumption of its organizational status, under (a) above, a
mutual fund shall present documentary evidence in a majority of the categories
listed in (h), below, with respect to its organizational and operational
structure.
(h)
The categories evidencing non-corporate structure shall be the absence of:
(1) Limited
liability where an investor may lose more than his or her investment in that
organization;
(2) Continuity of
life, where the organization holding the funds shall not survive after:
(3) The sale of
shares by interest-holders; or
(4) The death of
interest-holders;
(5) The right of
the mutual fund to sue and be sued as an entity;
(6) Property
ownership, where assets are held in the name of all investors rather than in
the fund name; or
(7) Dividends,
where profits of the fund are not divided ratably among the investors.
(i)
In instances where mutual funds are taxable under the provisions of (g) above,
the mutual fund shall:
(1) File a return;
(2) Apportion the
income; and
(3) The investors
in such a fund shall not distribute receive taxable dividends.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from Rev 902.05)
Rev
902.07 Partnerships, Associations and Trusts.
(a)
The interest and dividends tax shall be applied at the:
(1) Entity level
for partnerships, associations or trusts when:
a. The entity has a
usual place of business within
b. Any partner,
trustee, member or owner is an inhabitant or resident of
c. The ownership
interest is not represented by transferable shares; or
(2) Owner or
beneficiary level for partnerships, associations or trusts when:
a. The entity does
not have a usual place of business within
b. One or more of
the partners, trustees, members, owners or beneficiaries are inhabitants or
residents of
c. The ownership
interest is not represented by transferable shares.
(b)
The amount of taxable interest and dividend income shall be determined as follows:
(1) All interest
and dividends received, which would be taxable if
received by a resident individual, shall be taxable to a partnership, LLC,
association or trust if:
a. The beneficial
interest of the partnership, LLC, association or trust is composed of
non-transferable shares;
b. The
partnership's, LLC’s, or association's usual place of
business is in New Hampshire, or in the instance of a trust, the location of
the trust property is in New Hampshire; and
c. All of the
partnership's, LLC, association's or trust's interest holders are residents or
inhabitants of
(2) A pro-rata
portion of the interest and dividends received, which would be taxable if
received by a resident individual, shall be taxable to a partnership, LLC or
association if:
a. The beneficial
interest of the partnership, LLC or association is composed of nontransferable
shares;
b. The partnership,
LLC or association’s usual place of business is in
c. Some of the partnership's, LLC’s, or
association's interest holders are residents or inhabitants of
(3) A pro-rata
portion of the interest and dividends received, which would be taxable if
received by a resident individual, shall be taxable to a trust if:
a. The beneficial
interest of the trust is composed of nontransferable shares;
b. The trust
property is in
c. Some of the
trust's interest holders are residents or inhabitants of
(4) When a
partnership, LLC, association or trust is not taxable as an entity and
it has beneficial interests composed of non-transferable shares with some
interest holders being residents or inhabitants of
a. The interest and
dividend income subject to tax shall be:
1. Reported by the
resident interest holders; and
2. Imposed on the
portion of the distribution which represents interest or dividends received by
the entity; and
b. The portion of
the distribution shall be determined by multiplying the amount of the actual
distribution received by a fraction:
1. The numerator of
which shall be the total interest and dividend income received by the entity;
and
2. The denominator
of which shall be the total amount of gross income received by the entity.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from Rev 902.06)
Rev
902.08 Accounting Method For Determination of Accumulated Profits.
(a)
Corporate organizations, including S corporations, shall compute the amount of
its accumulated profits in conformity with the provisions of the Internal
Revenue Code of 1986, as amended, for the calculation of earnings and profits.
(b)
Partnerships, limited liability companies, associations or trusts composed of
transferable shares may elect to continuously calculate its accumulated profits
in a manner:
(1) Consistent with
the calculation of corporate earnings and profits under the Internal Revenue
Code of 1986, as amended; or
(2) Which conforms
in all respects to generally accepted accounting principles.
(c)
The partnership, limited liability company,
association or trust shall maintain records showing:
(1) The method
selected in (b) above; and
(2) The calculation
of the current year and accumulated profits.
(d)
If an organization does not maintain records showing the calculation of
accumulated profits and a distribution is made to the shareholders or interest
holders, the department shall presume there are adequate accumulated profits to
treat the distribution as a dividend.
(e)
The accumulated profits of a partnership shall be reduced by the amount of
compensation paid to the partners and deducted under RSA 77-A:4
if the partnership's accounting records provide evidence as to:
(1) The amount of
such compensation deducted; and
(2) The
partnership's filing of a business profits tax return for all years in which
the partnership's profits are reduced by such deduction.
(f)
The accumulated profits of a limited liability company taxed as a partnership
or proprietorship shall be:
(1) Reduced by the
amount of compensation paid to any member who is a natural person; and
(2) Deducted under
RSA 77-A:4 if the limited liability company’s
accounting records provide evidence as to:
a. The amount of
such compensation deducted; and
b. The limited
liability company’s filing of a business profits tax return for all years in
which the limited liability company’s profits are reduced by such deduction.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
902.09 Mixed-Share Entities. With respect to organizations composed of a
mixture of share types, the tax status of such organizations and the holders of
equity interests in such organizations, shall be
determined as follows:
(a)
When the majority of the outstanding equity interest in the entity is composed
of transferable shares:
(1) Each share shall
be deemed a transferable share;
(2) The entity
shall not be subject to tax under RSA 77; and
(3) The
distributions of profits to any equity interest holder shall be considered a
dividend subject to the interest and dividends tax; or
(b)
When the majority of the outstanding equity interest in the entity is composed
of non-transferable shares:
(1) Each share
shall be deemed a non-transferable share;
(2) The entity
shall be subject to tax under RSA 77; and
(3) The
distribution of profits to any equity interest holder shall not be considered a
dividend subject to the interest and dividends tax.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
PART Rev 903 INCLUSIONS AND EXCLUSIONS TO
INCOME
Rev 903.01 Forgiveness of Debt.
Forgiveness, in whole or in part, of a shareholder's or interest-holder's debt
by the organization shall be a dividend to the shareholder or interest-holder
for purposes of the interest and dividends tax to the extent of that
organization's accumulated profits.
Source. #2228, eff 12-28-82; ss by #2881, eff 10-19-84; ss by
#4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by
#8137, eff 8-10-04
Rev 903.02 Mutual Fund Dividends. The
automatic reinvestment of mutual fund dividends shall:
(a)
Not be considered a stock dividend; and
(b)
Be fully taxable in the year credited to the shareholder's account.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
903.03 Measurement of Non-Cash
Distributions. In instances where property, other than cash, is distributed
as a dividend, the computation of the dividend amount received by the
shareholder shall be:
(a)
Determined by the property's fair market value as of the date of the
distribution;
(b)
Limited to the amount of the organization's accumulated profits; and
(c)
Reduced by the amount of any of the organization's liabilities assumed by the
shareholder in connection with such distribution.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
903.04 Deemed Interest.
(a)
When an amount of property is actually received by a taxpayer and is not
classified as interest, but the nature of the transaction, the relatedness of
the parties, or both, indicates that the payment of interest was actually
intended and was paid, then an amount of interest shall be:
(1) Deemed by the
department to have been paid; and
(2) Calculated at
the fair market value, for the money that was loaned based on the facts and
circumstances of the specific taxpayer.
(b)
Interest deemed paid shall include:
(1) The difference
between the amount received at maturity and the actual purchase price of a
discounted bond less any amount previously reported on such bond by the
taxpayer;
(2) The difference
between the discount price paid for a non-interest
bearing bond and either:
a. The bond's face
value if sold at maturity; or
b. The amount
received upon its sale prior to maturity; and
(3) The unpaid
interest on bonds paying periodic interest when the bond is sold by the
taxpayer between interest payment dates since the selling price includes the
earned but unpaid interest.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
903.05 Deemed Dividends. With the exception of distributions in
liquidation, the following transactions between an organization and its
shareholders or interest-holders shall be considered a dividend:
(a)
All property transferred from an organization to a shareholder or interest-holder
with respect to the shareholder's or interest-holder's ownership interest from
the accumulated profits of the organization;
(b)
All personal expenditures made by an organization on behalf of a shareholder or
interest-holder which have not been properly reported as compensation or loans
for federal income tax purposes;
(c)
Forgiveness of a shareholder or interest-holder's indebtedness to the
organization; and
(d)
The automatic re-investment of property distributed from accumulated profits
into additional stock.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
903.06 Sequence of Distributions. All
actual distributions shall be presumed to be sequentially made from:
(a)
The current year’s profit of the organization;
(b)
The organization's accumulated profits; and
(c)
The capital of the organization.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
903.07 Post-Termination Distributions of Federally Recognized S
Corporations.
(a)
Distributions made by S corporations from the accumulated adjustment account, or the previously taxed income categories shall be
a dividend.
(b)
Distributions made by S corporations from the earnings and profits of the
corporation accumulated prior to the S corporation election being made shall
follow the provision in Rev 902.07(a).
(c)
Upon termination of S corporation status, distributions to shareholders shall
be taxable dividends upon receipt by the shareholder, either directly or
indirectly.
(d)
In instances of indirect receipt of distributions, the department shall deem
amounts to have been received by the shareholder at the time when evidence of
the transfer is acknowledged by a reduction in the accumulated adjustments
account.
(e)
Decreases in the amount of loans to a shareholder of an S corporation with a
corresponding reduction in the S corporation accumulated adjustment account
shall be considered a dividend as if:
(1) The S
corporation had distributed money as a dividend to the shareholder; and
(2) The shareholder
had returned the money to the corporation in a full or partial payment of an
outstanding loan.
(f)
Increases in the amount of loans from a shareholder of an S corporation with a
corresponding reduction in the accumulated adjustment account shall be
considered a dividend as if:
(1) The corporation
had distributed money as a dividend to the shareholder; and
(2) The shareholder
had returned the money to the corporation as a loan from the shareholder to the
corporation.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
903.08 Liability For Part-Year Residency.
(a)
Part-year residents shall be liable for the tax upon that portion of income
earned when they were a resident of
(b)
The taxable portion of such income in (a) above which shall be:
(1) Determined by
multiplying the annual taxable income received by a fraction:
a. The numerator of
which shall be the number of days during which the person was a resident of
b. The denominator
of which shall be 365 days of the year; or
(2) Determined by
providing convincing evidence such as:
a. A document
indicating the date of record for a dividend received;
b. A dated check
stub or remittance advice when the income was actually received by the
resident; or
c. A copy of a bank
statement or passbook showing the date the amount was posted.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
PART Rev 904 EXEMPTIONS
Rev
904.01 Part-year Returns. When a taxpayer is a resident of
(a)
Determine their taxable income, based on the total amount of interest and
dividend income received for the entire tax year; and
(b)
Be entitled to full exemption amounts provided by RSA 77:5.
Source. #1814, eff 9-20-8l; ss by #2228, eff 12-28-82; ss by
#2881, eff 10-19-84; ss by #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss
by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
904.02 Blind Taxpayers.
(a)
Persons claiming an exemption under the provisions of RSA 77:5, III shall be
considered qualified if they have written certification that they are legally
blind from the department of education.
(b)
Taxpayers claiming this status shall have the certification available for
review by department personnel upon audit of their tax return.
Source. #1814, eff 9-20-8l; ss by #2228, eff 12-28-82; ss by
#2881, eff 10-19-84; ss by #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss
by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
904.03 Persons with Disabilities.
(a)
Persons claiming an exemption under the provisions of RSA 77:5, IV shall be
considered qualified if they:
(1) Have secured
social security or veterans affairs certification that
they are disabled;
(2) Provide a
doctor’s affidavit they are unable to work; and
(3) Provide a birth
certificate as proof of age.
(b)
Taxpayers claiming this status shall have the documents available for review by
department personnel upon audit of their tax return.
Source. #1814, eff 9-20-8l; ss by #2228, eff 12-28-82; ss by
#2881, eff 10-19-84; ss by #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss
by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
904.04 Exemption For Trust Income Designated For Contribution to Charities.
The portion of a trust's income required to be donated by the trust document to
a charity which is exempt from taxation pursuant to RSA 77:8,
shall be exempt from taxation to the donor trust, provided that the funds
donated are actually used in the charitable function of the donee.
Source. #4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by
#6321, eff 8-22-96; ss by #8137, eff 8-10-04
PART Rev 905 ESTIMATED TAX, PAYMENTS AND
OVERPAYMENTS
Rev
905.01 Payments of Liabilities.
(a)
When a taxpayer has a payment due with any document, such payment shall be
filed with the document unless the tax liability is under one dollar.
(b)
Taxpayers may make payments using any of the following methods:
(1) Electronic
payment using internet e-file;
(2) Check made
payable to the state of
(3) Cash.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
905.02 Estimated Taxes.
(a) In accordance with RSA 77:18 II and III(a), every
taxpayer having an annual projected tax liability in excess of $500 shall make
4 payments of, estimated interest and dividends tax.
(b)
The filing dates shall be:
(1) For calendar
year filers:
a. On or before the
fifteenth day of the fourth, sixth, and ninth months for the tax year; and
b. On or before the
fifteenth day of the first month of the subsequent calendar year; and
(2) For fiscal year
filers on or before the fifteenth day of the fourth, sixth, ninth and twelfth
months for the tax year.
(c)
When an annually projected tax liability in excess of $500 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.
Source. #1726, eff 3-4-81; amd by #1793, eff 8-16-81; amd by
#1938, eff 1-31-82; ss by #2228, eff 12-28-82; amd by #2589, eff 1-20-84; ss by
#2881, eff 10-19-84; ss by #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
905.03 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 taxpayer;
(2) Refunded to the
taxpayer;
(3) Credited to the
estimated tax for the following year, if indicated by the taxpayer; or,
(4) A combination
of (2) and (3), above, if indicated by the taxpayer.
(b)
If the taxpayer incorrectly files and makes payment of estimated taxes, but is
not required to file a tax return, a written request for refund shall be mailed
to:
New Hampshire
Department of Revenue Administration
(c)
The request for refund shall include:
(1) Taxpayer name
and mailing address;
(2) Federal
identification number; and
(3) Type of filer,
if applicable;
(4) The reason why
the estimated tax payment was not required;
(5) The tax year
the estimated tax payment was made;
(6) The amount of
the estimated tax payment; and
(7) Taxpayer’s
dated signature in ink.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
905.04 Uniform Filing Information.
(a)
Returns and payment forms shall be considered timely filed when postmarked by
the United States Postal Service on or before the due date.
(b)
The date indicated on a postmark affixed by a postage meter operated by the
taxpayer or someone other than the United States Postal Service shall not meet
the requirements of RSA 80:55.
(c)
Returns filed after the prescribed filing date shall be subject to interest and
penalties.
(d)
Taxpayers who fail to receive tax forms from the department shall not be
relieved of their obligation to prepare and file a timely return, declaration,
or extension request.
(e)
Forms may be obtained by contacting the department by:
(1) Accessing the
department’s web site at www.revenue.nh.gov
(2) Telephoning the
Forms Line at (603) 271-2192; or
(3) Writing to:
New Hampshire
Department of Revenue Administration
Document Processing
Division
(f)
All returns, declarations or other documents containing monetary values filed
with the department may be prepared by rounding off to the nearest whole
dollar.
(g)
Returns filed electronically using internet e-file shall be considered timely
filed if received on or before the due date of the return.
(h)
Returns or payments made by e-file and subsequently cancelled by e-file prior
to the due date of the return shall not be considered timely filed.
Source. #8137, eff 8-10-04
PART Rev 906 RETURNS, DECLARATIONS, AND
EXTENSIONS
Rev
906.01 Estimated Tax Payments.
(a)
Calendar year filers required to pay estimated taxes, shall complete and file
Form DP-10-ES, estimated interest and dividends tax, with the department, and
payment, on or before April 15, June 15 and September 15 of the calendar year
and the final estimated payment on or before January 15 of the subsequent
calendar year.
(b)
Fiscal year filers required to pay estimated taxes, shall complete and file
Form DP-10-ES estimated interest and dividends tax, with the department, and
payment, on or before the fifteenth day of the fourth, sixth, ninth, and
twelfth months of the taxable period.
Source. #1793, eff 8-16-81; ss by #2228, eff 12-28-82; ss by
#2881, eff 10-19-84; ss by #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff
8-22-96; ss by #8137, eff 8-10-04 (from Rev 906.04)
Rev
906.02 Form DP-10, Interest and Dividends
Tax Return.
(a)
Form DP-10, interest and dividends tax return, shall be completed and filed by
taxpayers subject to the interest and dividends tax to report their income to
the department on the 15th day of the 4th month following
the end of the taxable period.
(b)
Form DP-10 shall be filed if the taxpayer has received interest and dividend
income exceeding the provisions of RSA 77:18, IV even though there is if no tax
is due because of the additional exemptions provided under RSA 77:5.
(c)
A joint interest and dividends tax return shall be filed if the taxpayer and
spouse are both residents and file a joint federal return with the Internal
Revenue Service.
(d)
If one spouse is not a resident, the resident spouse shall file a return alone
and report his or her interest and dividend income, and 50% of the interest
and/or dividends from jointly held investments.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 906.05)
Rev
906.03 Form DP-10-ES, Estimated Interest and Dividends Tax
. Form DP-10 ES, shall be completed and filed by taxpayers subject
to the interest and dividends tax to make quarterly payments of the estimated
tax due for the current taxable year.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 906.06)
Rev
906.04 Form DP-59-A, Payment and Application for 7
Months Extension of Time to File Interest and Dividends Tax Return.
(a)
Form DP-59-A shall be filed by any individual or joint filer, partnership, or
fiduciary or limited liability company, to make payment and apply for an
extension of time for filing an interest and dividends tax return when 100% of
the tax liability has not been paid by the due date through estimated payments
or a credit from a previous year.
(b)
Taxpayers shall file form DP-59-A shall file the form with the department on or
before the due date of the return:
(1) The previously
filed estimates did not meet or exceed 100% of the tax determined to be due; or
(2) The tax payer
does not wish to file the payment using the department’s internet e-file
payment option.
(c)
An extension shall be rejected if:
(1) The amount
submitted was not 100% of the balance due; or
(2) The application
was submitted after the due date for filing the return.
(d)
The commissioner or authorized representative shall terminate an extension if
the payment received with the extension was returned by the financial
institution.
Source. #4557, eff 12-28-88; ss by #4917, eff 8-21-90; ss by
#5071, eff 2-21-91; ss by #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by
#8137, eff 8-10-04 (from Rev 906.07)
Rev
906.05 Form ROC DP-10, Interest and Dividend
Tax Return IRS Adjustment Only.
(a)
Any individual or joint filer, partnership, limited liability company or
fiduciary liable for the interest and dividend tax shall report on Form ROC
DP-10 all federal audit changes within 6 months after such changes have been
finally determined by the Internal Revenue Service.
(b)
Federal audit changes shall have finally been determined when:
(1) The taxpayer
has:
a. Made payment on
any additional income tax liability resulting from the federal audit; and
b. Not filed a
petition for redetermination or claim for refund for the portions of the audit
on which payment was made;
(2) The taxpayer
has signed any Internal Revenue Service form consenting to the deficiency or
accepting any over-assessment;
(3) The time period
for filing a federal petition for redetermination to the United States Tax
Court has expired;
(4) The taxpayer
enters into a closing agreement with the Internal Revenue Service; or
(5) There is a
final decision from:
a. United States Tax Court;
b. United States District Court;
c. United States Court of Appeals;
d.
e. United States Supreme Court.
(c)
A copy of the federal change report shall be attached to Form ROC DP-10.
(d)
A separate report of change shall be prepared for each taxpayer and for each
year affected by the federal audit.
(e)
Form ROC DP-10 shall be submitted under separate cover.
(f)
Payment of any additional liability shall accompany Form ROC DP-10.
(g) A taxpayer shall complete and file Form
ROC DP-10 by providing the same information requested in Form DP-10 with the
new numbers due to the IRS changes.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 906.08)
Rev
906.06 Amended Tax Returns and Claims For Refund.
(a)
Any individual, joint filer, partnership, limited liability company or
fiduciary amending an original interest and dividends tax return or claiming a
refund of taxes previously paid shall:
(1) File Form
DP-10, interest and dividends tax return, for the particular tax year; and
(2) Check off the
box entitled "Amended Return".
(b)
Claims for a refund or amended interest and dividends tax returns, other than
those filed on constitutional grounds, shall be filed:
(1) Within 3 years
of the original due date of the tax; or
(2) Within 2 years
from the date the tax was paid, whichever is later.
(c)
The 2-year provision in (b)(2), above, shall not apply
if the payment was the result of an assessment or demand for payment initiated
by the department.
(d)
Claims for a refund or amended returns that are filed based on a claim that the
statute is unconstitutional shall be filed, pursuant to RSA 21-J:29, within 120
days of the due date of the tax and not the due date of the return.
Source. #4557, eff 12-28-88; ss by #5071, eff 2-21-91; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from
Rev 906.09)
PART Rev 907 ADMINISTRATION
Rev
907.01 Pre-Assessment Conference.
(a)
The purpose of an informal pre-assessment conference shall be for the taxpayer
to discuss audit findings with audit management personnel in an effort to reach
an agreement on the issues of fact or audit results.
(b)
At the conclusion of an audit, if the facts and circumstances indicate to the
department that an informal pre-assessment conference would benefit both the state and the taxpayer, the audit division shall
provide an informal pre-assessment conference for the taxpayer, or his
authorized representative.
(c)
The department shall notify the taxpayer or authorized representative by mail
of:
(1) The date, time
and location for the conference; and
(2) The advance
information that the taxpayer or authorized representative shall be required to
provide the division.
(d)
The information required by (c), above, shall include:
(1) The name,
address and identification number of the taxpayer;
(2) An outline of
the areas of agreement and disagreement;
(3) Documentation
in support of taxpayer's position such as:
a. Citations of
supporting case law;
b. Statutory or
regulatory provisions;
c. Documents or
correspondence from unrelated parties;
(4) Responses to
any outstanding questions raised by the auditor during the audit; and
(5) The names of
the individuals who shall participate in the conference on behalf of the
taxpayer.
(e)
Upon completing the review of material provided during the pre-assessment
conference, the audit division shall issue a tax notice, notice of refund or no
change letter which shall begin the period for formal appeal to the
commissioner under RSA 21-J:28-b and Rev 200.
Source. #2881, eff 10-19-84; ss by #4557, eff 12-28-88; ss by
#5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04
(formerly Rev 907.03)
PART Rev 908 PENALTIES
Rev
908.01 Substantial Understatement of Tax
(a)
The department shall assess the 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
taxpayer
(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 taxpayer 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 the following
criteria are met:
(1) The statement
contains a prominent caption identifying the statement as a disclosure of the
tax treatment for the substantial underpayment penalty;
(2) The item for
which the disclosure is made is clearly identified;
(3) The dollar
amount of the item is disclosed; and
(4) The statement
contains those facts affecting the tax treatment of the item that will apprise
the department of the nature of the potential controversy or a concise description
of the legal issues presented by the facts in question.
(c)
In determining whether a taxpayer has substantial authority, the department
shall consider the following as being authoritative sources:
(1) For items
applying specifically to the interest and dividends tax:
a. Interest and
dividends tax law and any other
b. Rules adopted by
the department;
c. Declaratory
rulings requested by and issued to the taxpayer;
d. Technical
information releases issued by the department;
e. Decisions of
f.
Federal District Court and First
Circuit Court of Appeals decisions;
g.
h. Legislative
committee reports specifying legislative intent; and
i. Written advice
from the department issued to the taxpayer about the tax treatment of the item
in question;
(2) For items that
are considered corporate dividends, distributions in liquidation of corporation
or returns of capital from corporations for federal income tax purposes:
a. Internal Revenue Code and other statutory
provisions;
b. Temporary and
final United States Treasury regulations;
c. Federal
district, appeals or tax court cases;
d. Internal Revenue Service or United States Department
of the Treasury administrative pronouncements including revenue rulings and
revenue procedures;
e. Tax treaties and
related regulations, as well as the United States Department of the Treasury's
or other official explanation of such treaties;
f. 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;
g. Controlling
precedent of the United States Court of Appeals to which the taxpayer has a
right of appeal;
h. Technical advice
memoranda, ruling or determination letter issued to the taxpayer or in which
the taxpayer is named;
i. An affirmative
statement in a revenue agent's report with respect to the taxpayer's prior
taxable periods; and
j. Any other source
which was accepted by the Internal Revenue Service as substantial authority;
(d)
A taxpayer shall have substantial authority for the tax treatment of an item
only if the weight of the authorities supporting the treatment of the item by
the taxpayer is substantial in relation to the weight of the authorities
supporting the position of the department;
(e)
The following shall not be considered authoritative sources:
(1) Opinions
reached by tax professionals;
(2) Tax publication
opinions or narrative statements; and
(3) Articles
contained in any professional or tax periodicals;
(f)
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; and
(g)
The penalty shall be applied to the net understatement determined by reducing
the understatement by the portion of the understatement for which the taxpayer
had substantial authority or had adequately disclosed the position taken on the
return.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
908.02 Understatement of Taxpayer's Liability by Tax Preparer.
(a)
For the 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 taxpayer's tax liability.
(b)
An individual or company providing more than typing, reproducing or other
mechanical assistance shall be deemed to be a tax preparer when the individual
or company uses computer software which makes determinations about the
applicability of tax laws or the characterization of income and the
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 taxpayer shall have adequately disclosed the tax
treatment of an item on the return or in a statement attached to the front of
the return.
(d)
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 taxpayer's tax liability; or
(e)
A tax preparer shall have willfully attempted to understate a tax liability of
a taxpayer in the following instances:
(1) The preparer
disregards or misstates information furnished by the taxpayer or other person
in an attempt to wrongfully reduce the tax liability; or
(2) The preparer
does not make inquiries of the taxpayer or other person when the information
provided is incorrect or incomplete, and the preparer knows or should have
known that the information was incorrect or incomplete.
(f)
If, in an adjudicative proceeding or a judicial decision, it is established
there was no understatement of liability and, if previously paid by the
preparer, the penalty imposed by RSA 21-J:33-b shall
be abated and refunded.
(g)
The refund of the penalty shall be made without any consideration of any period
of limitation for the issuance of a refund.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
Rev
908.03 Aiding and Abetting an Understatement of Tax Liability.
(a)
An individual or company providing more than typing, reproducing or other
mechanical assistance shall be deemed to be a tax preparer when the individual
or company uses computer software which makes determinations about the
applicability of tax laws or the characterization of income and the
allowability of deductions or credits.
(b)
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 other
document in connection with the interest and dividends tax law or departmental
rules if:
(1) The person
knows that the information provided will be used in the preparation of any
material document; and
(2) The person
knows that if used, the information will result in an understatement of tax
liability.
(c)
The penalty shall not be assessed in instances where the taxpayer adequately
disclosed the relevant facts regarding the tax treatment of the item in the
manner provided in Rev 908.01(b).
(d)
If, in an adjudicative proceeding or a judicial decision, it is established that
there was no understatement of liability and if previously paid by the
preparer, then the penalty imposed by RSA 21-J:33-c
shall be abated and refunded.
(e)
The refund of the penalty shall be made without any consideration of any period
of limitation for the issuance of a refund.
Source. #6321, eff 8-22-96; ss by #8137, eff 8-10-04
APPENDIX
|
RULE |
STATUTE |
|
Rev 901.01 |
RSA 21-J:13, I |
|
Rev 901.02 |
RSA 21-J:13 RSA
77:3,I(b) |
|
Rev 901.03 |
RSA 21-J:13 RSA
77:4 III |
|
Rev 901.04 |
RSA 21-J:13 RSA
77:7 |
|
Rev 901.05 – 901:14 |
RSA 21-J:13,I |
|
Rev 901.15 |
RSA 21-J:13,I RSA
77:5 |
|
Rev 901.16 |
RSA 21-J:13 ,I RSA
77:4 II & III |
|
Rev 901.17 |
RSA 21-J:13,I |
|
Rev 901.18 |
RSA 21-J:13,I RSA
77:3,I (b) RSA 77:4,III |
|
Rev 901.19 |
RSA 21-J:13,I RSA
77:14 RSA 77:16 |
|
Rev 902.01 – 902.04 |
RSA 21-J:13,I |
|
Rev 902.05 |
RSA 21-J:13,I RSA
77:12, RSA 77:16, RSA 77:3, I-II, |
|
Rev 902.06 |
RSA 21-J:13,I |
|
Rev 902.07 |
RSA 21-J:13,I RSA
77-A:4 |
|
Rev 902.08 - 903.04 |
RSA 21-J:13, I |
|
Rev 903.05 |
RSA 21-J:13,I RSA
77:4 |
|
Rev 903.06 – 903.08 |
RSA 21-J:13, I |
|
Rev 904.01 |
RSA 21-J:13, I RSA
77:3, I RSA 77:18, IV RSA 77:5 |
|
Rev 904.02 |
RSA 21-J:13 ,I RSA
77:5, III |
|
Rev 904.03 |
RSA 21-J:13, I |
|
Rev 904.04 |
RSA 21-J:13 ,I RSA
77:8 |
|
Rev 904.05 |
RSA 21-J:13, I RSA
77:4-e |
|
Rev 905.01 |
RSA 21-J:13, I |
|
Rev 905.02 |
RSA 21-J:13 , I
RSA 77:18, II & III |
|
Rev 905.03 |
RSA 21-J:13 ,I RSA
21-J:28-a,IV |
|
Rev 906.01 |
RSA 21-J:13, I RSA
77:18 RSA 21-J:28, 31 and 33 |
|
Rev 906.02 – 906.03 |
RSA 21-J:13, I |
|
Rev 906.04 |
RSA 21-J:13,I RSA
77:18 II |
|
Rev 906.05 |
RSA 21-J:13 ,I RSA
77:5 |
|
Rev 906.06 |
RSA 21-J:13 ,I RSA
77:18 |
|
Rev 906.07 |
RSA 21-J:13,I RSA
77:3 I & II |
|
Rev 906.08 |
RSA 21-J:13 ,I RSA
77:24-b |
|
Rev 906.09 |
RSA 21-J:13,I RSA
21-J:29 |
|
Rev 907.01 |
RSA 21-J:13,I |
|
Rev 908.01 |
RSA 21-J:13 RSA
21-J:33-a |
|
Rev 908.02 |
RSA 21-J:13 RSA
21-J:33-b, I III & IV |
|
Rev 908.03 |
RSA 21-J:13 RSA
21-J:33-c |