CHAPTER
Rev 300 BUSINESS PROFITS TAX
Statutory
Authority: RSA 21-J:13, I; 77-A:1,
III(b); 77-A:4-a; 77-A:6, I & IV; 77-A:15, II
PART Rev 301 DEFINITIONS
Rev 301.01 “Adjusted gross business profits” means a
business organization’s gross business profits, as defined in RSA
77-A:1, III, modified by the additions and deductions provided in RSA 77-A:4.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 301.02 “Apportionment” means the division of a
business organization's adjusted gross business profits among the states where
its activities are conducted by use of a formula provided in RSA 77-A:3.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 301.03 “Association” means a group of individuals or
business organizations which:
(a) Transacts business activity;
(b) Perpetuates its period of existence
notwithstanding that its members or participants change; and
(c) Might have been created by a formal
agreement, declaration of trust or other legal arrangement.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 301.04 “Base of operation” means:
(a) In the case of transportation property, the
place of more or less permanent nature from which
property is regularly directed or controlled; and
(b) In the case of an employee, the place of more or less permanent nature from which the employee
regularly:
(1) Starts work and to which he or she
customarily returns in order to receive instructions from the employer;
(2) Communicates with customers or other persons;
or
(3) Performs any other functions necessary to the
exercise of his or her trade or profession.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 301.05 “Business trust” means an organization:
(a) Properly organized as a trust under the laws
of its domicile state; and
(b) Conducting business activity.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6129, eff 11-23-95; ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev 301.06 “Combined apportionment factors,” as used in
RSA 77-A:3, III, means the summation of the separately calculated sales, payroll and property apportionment factors of each business
organization within a combined group.
Source. #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 301.07 “Combined group” means business organizations
whose unitary business is conducted within
and without
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06
(formerly Rev 301.06); ss by #10758, eff 1-16-15
Rev 301.08 “Combined reporting” means the use of a
single tax return or document to report the taxable business profits of a
combined group of business organizations subject to the business profits tax.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06
(formerly Rev 301.07); ss by #10758, eff 1-16-15
Rev. 301.09 “Commissioner” means the commissioner of the
Source.
#4192, eff 12-23-86, ss by #5490, eff 10-19-92, ss by #6853,
eff 9-23-98; ss by #8709, eff 8-25-06 (formerly Rev 301.08); ss by #10758, eff
1-16-15
Rev 301.10 “Compensation”, as used in RSA 77-A:3, I(b),
means remuneration, excluding fringe benefits, paid for services rendered
during the tax period including, but not limited to:
(a) Salaries;
(b) Wages;
(c) Bonuses; and
(d) Commissions.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06
(formerly Rev 301.09); ss by #10758, eff 1-16-15 (from Rev 301.09)
Rev
301.11 “Costs of performance”, as used
in RSA 77-A:3, I(c), means the direct
costs of providing the service or activity
determined in a manner consistent with generally accepted accounting principles
and in accordance with practices prevalent in the trade or business of the
organization.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06
(formerly Rev 301.10); ss by #10758, eff 1-16-15 (from Rev 301.10); ss by
#13177, eff 3-6-21
Rev
301.12 “Delivered to a location in this state” means the
location of the market for the services provided by the taxpayer, without
regard to the location of the property or payroll of the taxpayer.
Source. #13177, eff 3-6-21
(formerly Rev 301.12)
Rev 301.13 “Earned income”, as used in RSA 77-A:4,
III(a), means the net earnings from self-employment as defined in IRC section
1402.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06
(formerly Rev 301.11); ss by #10758, eff 1-16-15 (from Rev 301.11) renumbered
by #13177 (formerly Rev 301.12)
Rev 301.14 “Eighty/twenty business organization”, as
used in RSA 77-A:1, XV(b), means a separate business organization which
includes all its income in a United States tax return but where 80% or
more of the average of the payroll and property of such business organization
is outside the 50 states and the District of Columbia.
Source. #2012, eff 5-5-82;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; ss by #4438, eff 6-22-88;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff
8-25-06 (formerly Rev 301.12); ss by #10758, eff 1-16-15 (from Rev 301.12) renumbered
by #13177 (formerly Rev 301.13)
Rev 301.15 “Employee” means any person performing
services for a business organization for which compensation is provided except
that it does not include a director of a corporation acting in such capacity or
an independent contractor.
Source. #5910, eff 10-14-94;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06 (formerly Rev 301.13); ss by
#10758, eff 1-16-15 (from Rev 301.13) renumbered by #13177 (formerly Rev 301.14)
Rev 301.16 “Enterprises as are expressly made exempt”,
as referenced in RSA 77-A:1, I, means:
(a) Entities exempt from taxation under section
501 of the IRC; and
(b) Does not mean business organizations which, for federal income tax purposes,
serve as conduits either in whole or in part for the real owners such as, but
not limited to:
(1) Partnerships;
(2) Single member limited liability companies;
(3) Subchapter S corporations;
(4) Qualified subchapter S subsidiaries;
(5) Grantor trusts;
(6) Real estate investment trusts;
(7) Real estate trusts; or
(8) Regulated investment companies.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15 (from Rev 301.14) renumbered by #13177 (formerly Rev
301.15)
Rev 301.17 “Fringe benefits” means the amounts, other
than salaries or wages, paid or allowed by the employer to, or on behalf of, the
employee for items including, but not limited to:
(a) Medical insurance premiums;
(b) Self-insured medical expenses;
(c) Life insurance premiums;
(d) Employer portion of F.I.C.A.;
(e) Unemployment compensation;
(f) Company discounts;
(g) Employer contributions to pension or profit sharing plans; or
(h) Education assistance payments.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15 (from Rev 301.15) renumbered by #13177 (formerly Rev
301.16)
Rev 301.18 “Income-producing activity”, as used in RSA
77-A:3, I(c), means:
(a) Transactions and activities directly engaged
in by the business organization for the ultimate purpose of obtaining gain or
profit and shall include, but not be limited to, the following:
(1) The rendering of personal services by
employees or the utilization of tangible and intangible property by the
business organization 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 mean:
(1) Transactions
and activities performed for the business organization by independent
contractors or other similar persons or entities; or
(2) The mere holding of a security interest in
intangible property.
Source. #4438, eff 6-22-88;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15 (from Rev 301.16) renumbered by #13177 (formerly Rev
301.17)
Rev 301.19 “Independent contractor” means a person who:
(a) Exercises independent employment;
(b) Contracts to do work for multiple business
organizations that are not related parties;
(c) Holds
himself or herself out to the public as an independent contractor in the
regular course of business; and
(d) Meets one of the following criteria:
(1) Has
been granted independent contractor status by the United States Internal
Revenue Service for federal income tax purposes; or
(2) Works according to his or her own judgment or
methods, without being subject to any employer except as to the results of the
work and, has the right to employ and direct the action of other workers
independently of such employer and freed from any superior authority to say how
the specified work will be done.
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.17) renumbered by #13177 (formerly Rev 301.18)
Rev 301.20 “Interdependence in their functions,” as
referenced in RSA 77-A:1, XIV, means that relationship in which the New
Hampshire entity is an integral part of a larger system where the business done
within the state is dependent upon or contributes to the operation of the
business without the state as demonstrated by such factors as:
(a) Centralized management;
(b) Functional integration; and
(c) Economies of scale.
Source. #5910, eff 10-14-94;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.18) renumbered by #13177 (formerly Rev 301.19)
Rev 301.21 “Internal Revenue Code (IRC)” means the United States Internal Revenue Code
as defined in RSA 77-A:1, XX, unless otherwise indicated.
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.19) renumbered by #13177 (formerly Rev 301.20)
Rev 301.22 “Net profit from all business activity” as
used in RSA 77-A:1, III(b) and Rev 302.01(c), means the difference between the
total income and total deductions on federal Form 1120-S after making the
modifications required by Rev 302.01(c) (1) and (2).
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.21); renumbered by #12361 (from Rev 301.22) renumbered by #13177
(formerly Rev 301.21)
Rev 301.23 “Net profit from such business activity” as
used in RSA 77-A:1, III(e), means the amount of net income from business
activity as is determinable under the provisions of the IRC for corporations and
applied within the provisions of RSA 77-A for such business organizations.
Source. #2012, eff 5-5-82;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; amd
by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff
8-25-06; ss by #10758, eff 1-16-15 (from Rev
301.22); renumbered by #12361 (from Rev 301.23) renumbered by #13177 (formerly
Rev 301.22)
Rev 301.24 “Partnership” means an unincorporated entity
comprised of 2 or more persons for the purpose of conducting business activity
as co-owners.
Source. #5910, eff 10-14-94;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.23); renumbered by #12361 (from Rev 301.24) renumbered by #13177
(formerly Rev 301.23)
Rev 301.25 “Principal New Hampshire business
organization” means an entity designated as the responsible party for filing
all returns, declarations, extensions, or other documents required under the
business profits tax on behalf of a combined group.
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06 (formerly Rev 301.26); ss by #10758, eff 1-16-15
(from Rev 301.24);renumbered by #12361 (from Rev 301.25) renumbered by #13177
(formerly Rev 301.24)
Rev 301.26 “Proprietorship”, as used in RSA 77-A:1, III
and Rev 300, means:
(a) The ownership of any unincorporated business
by an individual; and
(b) Does not mean businesses conducted by an
entity such as, but not limited to a:
(1) Partnership; or
(2) Single member limited liability company.
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06 (formerly Rev 301.27); ss by #10758, eff 1-16-15
(from Rev 301.25); renumbered by #12361 (from Rev 301.26) renumbered by #13177
(formerly Rev 301.25)
Rev 301.27 “Real and tangible personal property” means
land, buildings, improvements, equipment, merchandise or manufacturing
inventories, leasehold improvements, and other similar property that reflects
the organization's business activities.
Source. #2012, eff 5-5-82;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; amd
by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff
8-25-06 (formerly Rev 301.28); ss by #10758, eff 1-16-15
(from Rev 301.26); renumbered by #12361 (from Rev 301.27) renumbered by #13177
(formerly Rev 301.26)
Rev 301.28 “Regular corporation” means an incorporated
business not governed by Subchapter S of the IRC for filing its federal income
tax returns.
Source. #8709, eff
8-25-06; ss by #10758, eff 1-16-15 (from Rev
301.27); renumbered by #12361 (from Rev 301.28) renumbered by #13177 (formerly
Rev 301.27)
Rev 301.29 “Representative” means an employee of a
business organization, or any person
acting on behalf of the business organization. The term does not include
independent contractors as defined in Rev 301.18.
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.28); renumbered by #12361 (from Rev 301.29) renumbered by #13177
(formerly Rev 301.28)
Rev 301.30 “S corporation” means a business
organization, for federal income tax purposes, as defined within section 1361
of the IRC.
Source. #4192, eff 12-23-86;
ss by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff
8-25-06; ss by #10758, eff 1-16-15 (from Rev
301.29); renumbered by #12361 (from Rev 301.30) renumbered by #13177 (formerly
Rev 301.29)
Rev 301.31 “State”, as used in RSA 77-A:3 and RSA 77-A:4,
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. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
(from Rev 301.30); renumbered by #12361 (from Rev 301.31) renumbered by #13177
(formerly Rev 301.30)
Rev 301.32 “Taxpayer identification number” means:
(a)
Social Security number;
(b)
Federal employer identification number;
(c)
Individual taxpayer identification number;
(d)
Preparer tax identification number; or
(e)
Department identification number.
Source. #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15; renumbered
by #12361 (from Rev 301.32) renumbered by #13177 (formerly Rev 301.31)
Rev 301.33 “Taxable in another state” means the
activities of the business organization in another state:
(a) Exceed the parameters enumerated in 15 USC
section 381, P.L. 86-272; and
(b) Are sufficient to create a taxable presence
within that state.
Source. #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15; renumbered
by #12361 (from Rev 301.33) renumbered by #13177 (formerly Rev 301.32)
Rev
301.34 “Unity of operation”, means there is a
centralized executive structure generally directing operations commonly
referred to as staff functions.
Source. #6853, eff 9-23-98; ss by #8709, eff
8-25-06; ss by #10758, eff 1-16-15 (from Rev
301.32); renumbered by #12361 renumbered by #13177 (formerly Rev 301.33)
Rev 301.35 “Unity of ownership”, as used in RSA 77-A:1,
XIV, means the activities outside the taxing jurisdiction, together with the
in-state activities are owned either
directly or indirectly by the same economic entity or group of economic
entities.
Source. #10758, eff
1-16-15 (from Rev 301.33); renumbered by #12361
(from Rev 301.35) renumbered by #13177 (formerly Rev 301.34)
Rev 301.36 “Unity of use” means there is an executive
authority with control over major policy matters and activities of the business organization.
Source. #10758, eff
1-16-15 (from Rev 301.34); renumbered by #12361
(formerly Rev 301.35) renumbered by #13177 (formerly Rev 301.35)
PART Rev 302 COMPUTATION OF GROSS BUSINESS PROFITS
Rev 302.01 Business Organizations Filing as S
Corporations for Federal Income Tax Purposes.
(a) A corporation which qualifies and files as an
S corporation, for federal income tax purposes pursuant to sections 1361
through 1379 of the IRC, shall be treated the same as a corporation which files
as a regular corporation for federal income tax purposes.
(b) A corporation qualified as a subchapter S
subsidiary for federal income tax purposes pursuant to section 1361(b) of the
IRC shall:
(1) Be treated as an S corporation as provided in
(a) above, for purposes of the business profits tax;
(2) Maintain sufficiently detailed records to
determine the business profits tax liability of the corporation at the
corporate level; and
(3) File its own business tax return unless it is
part of a combined return.
(c) The following modifications shall be made to
federal Form 1120S to arrive at the net profit from all business activity:
(1) The ordinary income or loss from trade or
business activities on page one of federal Form 1120S shall be increased or
decreased by all necessary adjustments including, but not limited to, on
schedule K of federal Form 1120S for the amounts of:
a. Gross income or loss from real estate rental activities less expenses for such activities;
b. Gross income
or loss from other rental activities less
expenses for such activities;
c. Interest, dividend or royalty income;
d. Short-term and long-term capital gains;
e. Net gain or loss under section 1231 of the IRC; and
f. Any S corporation income, loss or expenses
not included in federal Form 1120S; and
(2) Expenses allowed to a C corporation may be
deducted.
(d) In a year wherein sections of the IRC
pertaining to formation or termination of an S corporation are applicable, and
the business organization is required to file a federal S corporation
short-year return and a federal regular corporation short-year return for the
same tax year, the corporation shall, for purposes of
business profits tax complete and file Form NH-1120, Corporate “Business
Profits Tax Return” with the department.
(e) Form NH-1120 shall be
accompanied by both federal returns.
(f) The method selected to
allocate income between the short S corporation and regular corporation tax years
for federal purposes shall not alter the amount due under RSA 77-A.
(g) A taxpayer shall determine the basis of stock
held in an S corporation for business profits tax purposes by:
(1) Calculating the basis amount as if the stock
were that of a regular corporation; and
(2) Not using basis adjustments which follow
federal conduit rules for taxation of partnership-type interests.
(h) Liquidations of S corporations shall follow
the same rules of the IRC as liquidations of regular
corporations for business profits tax purposes.
(i) No part of this
section shall be construed as allowing a greater deduction from income or
inclusion to income than would be allowable for regular corporations.
Source. #2651, eff 3-22-84;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; amd
by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss
by #8709, eff
8-25-06; ss by #10758,
eff 1-16-15
Rev 302.02 Partnerships.
(a) Co-owners of property shall be considered
partners in a business organization if they conduct business activity with the
intent of dividing the profits.
(b) Co-owners of property which is maintained,
kept in repair, rented or leased shall not, in and of
itself, create a partnership.
Source. #4192, eff 12-23-86;
ss by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15; amd
by #12186, eff 5-25-17
Rev 302.03 Proprietorships.
(a) The gross business profits of a
proprietorship, except
business activity conducted by a single member limited liability company, shall
include:
(1) The total net profit or loss from all
businesses, professions, or farming activities reported by an individual
on his or her federal income tax return;
(2) The total net income or loss from rental
activities reported by an individual on his or her federal income tax return;
(3) The total gain or loss from the disposition of
all business assets owned by an individual on his or her federal income tax
return; and
(4) The amount of an installment gain from the
disposition of all business assets owned by an individual on his or her federal
income tax return.
(b) A proprietorship engaged in business activity
both within and without New Hampshire shall apportion its gross business
profits using the provisions of RSA 77-A:3 and Rev 304.
(c) Where spouses jointly own rental property or
provide services for a business activity, and do not file as a partnership for
federal income tax purposes, the gross business profits from such business
activity shall be reported in its entirety, on a single proprietorship return,
by one of the spouses on a consistent basis.
Source. #4192, eff 12-23-86;
ss by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15; ss by #12361, eff 8-9-17
Rev 302.04 Use of Separate Accounting. Business organizations shall not determine
their
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
amd by #5910, eff 10-14-94; ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev 302.05 Business Organizations Whose Income or
Expenses are Federally Reportable by the Owners.
(a) Any business organization, whose income or
expenses are reportable by the true owners for federal income tax purposes,
shall include all items of income and expense in its business profits tax
return rather than the return of the shareholder, partner, or other owner.
(b) Any element of income, expense, or both,
required to be reported at the entity level for purposes of the business
profits tax shall be removed from the true owner's business profits tax return.
(c) The tax for the business organization shall be
computed before any distributions, adjustments, or both, resulting from the
application of federal tax law provisions which permit the pass-through of
items of income or expenses to the owners.
(d) A real estate investment trust shall be
subject to the business profits tax on the taxable income of the real estate
investment trust prior to adjustments provided in section 857(b)(2) of
the IRC.
(e) A regulated investment company shall be
subject to the business profits tax on the taxable income of the regulated
investment company prior to the adjustments provided in section
852(b)(2) of the IRC.
(f) A single member limited liability company
shall:
(1) Obtain a New Hampshire taxpayer
identification number, as defined in Rev 301.31 from the department at least 30
days prior to filing any tax documents with the department; and
(2) Determine its gross business profits as
provided in (a) above, in accordance with:
a. RSA 77-A:1, III(a), if the member
is a corporation;
b. RSA 77-A:1, III(c), if the member
is a partnership;
c. RSA 77-A:1, III(d), if the member is a proprietor; and
d. RSA 77-A:1, III(e), if the
member is a trust;
(g) A qualified subchapter S corporation
subsidiary shall determine its gross business profits, as provided in (a) above,
in accordance with RSA 77-A:1, III(b).
(h) A single member limited liability company and
a qualified subchapter S corporation subsidiary shall maintain records, as
provided in RSA 77-A:11, sufficiently detailed to calculate:
(1) Gross
business profits;
(2) Additions and deductions as provided in RSA
77-A:4; and
(3) Apportionment factors as provided in RSA 77-A:3.
Source.
#4192, eff
12-23-86; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff
8-25-06; ss by #10758, eff 1-16-15; ss by #12361, eff 8-9-17
Rev 302.06 Gains or Losses on Sale of Business Assets.
(a) The selling price for the sale or other
disposition of a business asset shall be the sum of:
(1) Money received;
(2) Indebtedness assumed by the buyer or
transferee; and
(3) The fair market value of any property, other
than money, received.
(b) The basis of the business asset sold or exchanged shall be:
(1) Determined using the requirements of the IRC; and
(2) Applied at the entity level.
(c) One hundred per cent of the
recognized gain or loss on the sale, exchange or other disposition of a business
asset shall be included in a business organization's gross business profits.
(d) The recognition and realization of gains or
losses on the sale, exchange, or other disposition of property shall be
determined based upon the requirements of the IRC except where RSA 77-A and these
rules prescribe a different treatment including,
but not limited to, the determination of gain or losses using the federal
provisions relating to consolidated returns.
(e) Property owned by more than one business
organization shall be reported by each business organization in proportion to
its ownership interest on the gain or loss on the sale, exchange or other disposition of such property.
Source. #3066, eff 7-23-85;
ss by #4192, eff 12-23-86; amd by #4438, eff 6-22-88;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 302.07 Installment Method of Reporting Income.
(a) Business organizations reporting their income
under the installment method, for federal income tax purposes, shall report
their income for business profits tax purposes using the same method except as
provided in (f) and (g) below.
(b) Business organizations selling property on an
installment basis shall be considered a business organization until all the
installments have been reported and the total tax paid.
(c) The gross
sales price of the property shall be considered and not the amount received in
a particular year for purposes of the gross business income test.
(d) Neither the gross selling price nor the
installment proceeds shall be included in gross business income except for the
year of sale for purposes of the gross business income test.
(e) A return reporting the installment income
shall be completed and filed every year, regardless of the amount of each
installment, if the gross sales price exceeded $50,000 for tax years ending
after June 30, 1993.
(f) The reported installment gain income shall
not be increased or decreased by income from the other business activity if the
filing of a return is due to the reporting of installment income, and the
statutory minimum income level other than for the installment sale has not been
met.
(g) A business organization may elect to report
the entire gain or loss in a single year for business profits tax purposes
although it has not elected, pursuant to section 453(d) of the IRC, by
attaching a completed Form DP-95, “Election to Report Net Gain in a Year of
Sale”, to the business profits tax return if the filing requirement for
subsequent years is solely the result of reporting the gain or loss from the
installment sale to New Hampshire.
(h) The
sale, exchange or other disposition of an installment
obligation by a business organization shall require the inclusion of:
(1) The unreported gain or loss in the business
organization’s business profits tax return covering the year the sale, exchange
or other disposition took place; and
(2) The computation of the gain or loss and the
basis of the obligation in accordance with IRC section 453B.
Source. #4192, eff 12-23-86;
amd by #4438, eff 6-22-88; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev 302.08
(a) Amounts received by a business organization
from the state of New Hampshire for the purchase of agricultural land
development rights shall constitute gross business income within the meaning of
RSA 77-A:1, VI, as gross proceeds from the sale of assets used in the trade or
business.
(b) The gain or loss realized from the sale in
(a) above, shall be includible in the gross business profits of a business
organization if such asset is compatible with the underlying business activity.
(c) The gain or loss on the sale of agricultural
land development rights to the state of
(d) The gain or loss on the sale of agricultural
land development rights to the state of
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 302.09 Business Organizations Includible in
Federal Consolidated Return.
(a) Business organizations includible in a
federal consolidated return shall determine their gross business profits
without applying sections 1501 through 1505 of the IRC and the U.S. Department
of the Treasury’s Treasury Regulations 1.1501 et seq.
(b) Business organizations shall compute the
basis of their property, including the stock of subsidiaries, using the basis
provisions contained in the IRC for non-affiliated corporations.
(c) A combined group of business organizations
filing a federal consolidated return shall determine the gross business profits
of each separate business organization in accordance with (a) and (b) above.
(d) The amount of income, expense and gross
business profits determined under (a) above, for each entity shall be added
together and all intergroup activity eliminated to arrive at the gross business
profits of the combined group.
Source. #4438, eff 6-22-88;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 302.10 Business Organizations Includible in a
Combined Return.
(a) Business organizations utilizing combined
reporting, as defined in Rev 301.08, shall determine the gross business profits
of each business organization includible in the combined group as if the
business organizations were not affiliated in accordance with RSA 77-A:1, I and
III.
(b) The amounts of income from each business
organization shall be added and all intergroup activity shall be eliminated to
arrive at the gross business profits of the combined group.
(c) The amounts of deductions from each business
organization shall be added and all intergroup activity shall be eliminated to
arrive at the gross business profits of the combined group.
Source. #4438, eff 6-22-88;
ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 302.11 Factors Suggesting Unity of Operation. To determine if a centralized executive
structure controls the staff functions indicating unity of operation, the department
shall consider the importance to the business organization of, and the extent
to which, the following factors are controlled by a centralized executive
structure:
(a) Accounting;
(b) Advertising;
(c) Industrial or public relations;
(d) Insurance;
(e) Legal;
(f) Purchasing;
(g) Research and development;
(h) Retirement planning; or
(i) Any other factor commonly referred to as a staff function.
Source. #5355, eff 3-16-92;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev 302.12 Factors Suggesting
Unity of Use. To determine if a centralized
executive authority controls major policy decisions and activities of the
business organization indicating unity of use, the department shall consider
the importance to the business organization of, and the extent to which, the
following factors are overseen or performed by a centralized executive
authority:
(a) Defines and controls the general system for producing profit;
(b) Establishes professional standards to enhance or promote public perception of
the business;
(c) Imposes
and enforces procedures to implement compliance of business activities with
public law and regulations;
(d) Sets standards
of ethical performance;
(e) Controls major policy issues;
(f) Makes budgetary allocations;
(g) Approves major capital expenditures and expansions;
(h) Appoints, assigns or transfers personnel throughout the business;
(i) Coordinates the activities of the affiliated
entities within the general system of operations;
(j) Prepares the financial reports;
(k) Determines and defines required intergroup
transactions including sales, financing, and transfers of goods or services;
(l) Makes
decisions in matters involving intergroup conflicts or problems; or
(m) Any other function managed by a central executive authority.
Source. #8709, eff 8-25-06;
ss by #10758, eff 1-16-15
Rev 302.13 Election to Adopt Consolidated Group's
Averaging Convention.
(a) If a New Hampshire business organization is a
member of a federal consolidated group that has utilized a different averaging
convention under section 168(d) of the IRC than would be allowable for the New
Hampshire business organization under a separate entity filing, the New
Hampshire business organization may elect to follow the averaging conventions
of its consolidated group by indicating that choice to the department by
attaching the following statement to its business profits tax return:
“(name of business
organization) hereby elects to adopt the averaging conventions of Internal
Revenue Code section 168(d) utilized by the (name of parent) federal
consolidated group of which it is a part, and hereby attests that its usage
will have no material effect on the tax liabilities of (name of business
organization).”
(b) The business organization's election shall be
disallowed when an audit is performed on returns filed by a business
organization and the audit determines the election resulted in a
material impact upon the business organization's
(c) The averaging convention otherwise required
shall be required for each return so affected in (b) above.
(d) A material impact upon the business
organization’s
Source. #6853, eff 9-23-98;
ss by #8709, eff 8-25-06 (formerly Rev 302.11); ss by #10758, eff 1016-15 (from
Rev 302.14)
Rev 302.14 Reasonable Compensation for Employees of a
Corporation.
(a) Reasonable
compensation for an employee of a corporation shall follow IRC section 162 and
related federal authority in
determining the gross business profits of a corporation.
(b) The business organization shall be allowed to
deduct reasonable compensation to an owner employee in determining the gross
business profits of a corporation or other organization permitted a federal
compensation deduction for any owner employee in arriving at its gross business
profits.
Source. #6853, eff 9-23-98;
ss by #8709, eff 8-25-06 (formerly Rev 302.12); ss by #10758, eff 1-16-15
Rev 302.15 Professional Limited Liability Companies. A professional limited liability company
conducting business activity in
Source. #8709, eff 8-25-06
(formerly Rev 302.13); ss by #10758, eff 1-16-15 (formerly Rev 302.16)
PART Rev 303 ADDITIONS AND DEDUCTIONS MADE TO GROSS
BUSINESS PROFITS
Rev 303.01 Compensation for Personal Services of
Proprietor, Partner or Member.
(a) For purposes of this section, the following
definitions shall apply:
(1) “Actual
personal services” means the services performed by a natural person, who is a
proprietor, partner or member of an unincorporated business organization, that
are directly related to the operation of the unincorporated business
organization taking the compensation deduction, but not in any capacity for
another business organization;
(2) “Amounts that are fairly attributable to the
actual personal services of the proprietor, partner or member” means the amount
as would be allowed using the standards set forth in section 162(a)(1) of the
United States Internal Revenue Code, as amended, and Treasury Regulations,
administrative rulings, and judicial cases interpreting such provision;
(3) “Business activity” means “business activity”
as defined in RSA 77-A:1, XII;
(4) “Capital business asset” for purposes of
determining the amount of the addition to the fair and reasonable compensation
deduction allowable under RSA 77-A:4, III(a) means a “capital asset” as defined
in section 1221(a) of the United States
Internal Revenue Code, as amended, provided that the capital business asset is
an asset used by the unincorporated business organization to conduct business activity;
(5) “Unincorporated
business organization” means a proprietorship, partnership, or limited
liability company taxed as a proprietorship or partnership for federal income
tax purposes;
(6) “Gross selling
price as commissions on the sale of business assets” for purposes of
determining the amount of the addition to the fair and reasonable compensation
deduction allowable under RSA 77-A:4, III(a) means the amount received in
exchange for the sale or other disposition of a capital business asset measured
by the sum of:
a. Money received;
b. Indebtedness assumed by the buyer or
transferee; and
c. The fair market value of any property, other
than money, received in exchange for the
capital business asset;
(7) “Natural person” means a human being, as well
as a trustee of a grantor trust not recognized as a business organization; and
(8) “Total compensation” means the sum of
compensation, as defined in Rev 301.10, fringe benefits, as defined in Rev
301.16, and any other form of remuneration for all proprietors, partners or
members rendering actual personal services to the unincorporated business
organization.
(b) An unincorporated business organization shall
be allowed a compensation deduction for the total compensation that is
reasonable and fairly attributable to its proprietors,
partners or members who render actual personal services to the unincorporated
business organization.
(c) The compensation deduction shall be
determined for each proprietor, partner or member who rendered actual personal services
to the unincorporated business organization and shall be allowed for amounts
that would be allowable as reasonable under Internal Revenue Code section
162(a)(1), as amended in the year the deduction is taken, Treasury Regulation
section 1.162-7, administrative rulings and judicial cases interpreting
Internal Revenue Code section 162(a)(1).
(d)
The amount determined in (c) above shall not exceed the amount reported
as earned income, as defined in Rev 301.12, on the federal income tax returns
of the proprietor, partner, or member, but may also include:
(1) An amount not to exceed net income from
rental properties from federal Form 1040, schedule E, federal Form 8825 and federal Form 4835; and
(2) An amount not to exceed 15 percent of the
gross selling price as commissions on the sale of capital business assets. If
the proprietor, partner or member acted as the broker
or agent for the sale of capital business assets, the following shall apply:
a. If no other broker or agent representing the
seller was involved in the sale of the capital business asset, a commission not
to exceed 15 percent of the total gross sales price as shown on federal Form
4797, federal Form 6252, federal Form 1065 schedule D, and federal Form 1040
for the sale of business assets; or
b. If the partner, proprietor or member acts as
a co-broker, the maximum deduction shall be the difference between the amount
determined in a. above and the amounts paid to other brokers or agents.
(e)
If an unincorporated business organization or group of related business
organizations is under audit review by the department and did not elect the
record-keeping safe harbor on the return being audited, the unincorporated
business organization or group of related business organizations may elect the
record-keeping safe harbor during the audit review by filing an amended return
reporting a compensation deduction of up to $75,000 as total compensation for
the tax year under audit review, which the department shall accept as
reasonable.
(f) The compensation deduction shall not reduce
the taxable business profits of the unincorporated business organization to
below zero.
(g) An unincorporated business
organization that deducts the record-keeping safe harbor amount of up to
$75,000 as total compensation for the tax year shall not be required to keep
records as provided under (d), above.
(h) An unincorporated business organization that
deducts in excess of the record-keeping safe harbor
amount of $75,000 as total compensation for the tax year shall keep such
records as are necessary to determine that the compensation deduction is
reasonable under §162(a)(1) of the U.S. Internal Revenue Code, as it may be
amended in the year the deduction is taken, and Treasury Regulations,
administrative rules, and judicial decisions rendered thereunder.
(i) A partnership
business organization electing to be taxed as a corporation for federal income
tax purposes shall:
(1) Not take a compensation deduction under RSA
77-A:4, III; and
(2) Take a reasonable compensation deduction as
allowed under Internal Revenue Code section 162 when such deduction is:
a. Taken on the entity's federal corporate
return filed with the Internal Revenue
Service; and
b. In accordance with Rev 302.14.
(j) Where a proprietor, partner, or member
provides actual personal services for multiple business organizations, the
records of each business organization shall comply with the requirements of (i), above.
(k) Where a proprietor, partner, or member
provides actual personal services for multiple business organizations, the
deduction claimed by each business organization shall be for the actual
personal services rendered to it by the individual in the capacity of the proprietor,
partner, or member of the specific business organization for which the deduction is taken.
(l) Remuneration for the actual personal services
performed by a spouse shall be deductible:
(1) As compensation in determining the gross
business profits of the business organization when the spouse is an employee;
or
(2) Under the provisions of RSA 77-A:4, III if
the spouse is not an employee of the business organization and performs the
personal services as a surrogate for the proprietor, partner
or member.
Source. #4192, eff 12-23-86;
ss by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev 303.02 Qualified Research Contributions.
(a) For purposes of RSA 77-A:4, XII(a), the
business organization shall add back to its gross business profits the federally
deducted amount attributable to the specifically contributed items which meet
all requirements of qualified research contributions set forth in RSA 77-A:1,
X.
(b) Each business organization taking a qualified
research contribution under RSA 77-A:4, XII shall attach a document to its business profits tax
return containing the following information:
(1) Name of each donee;
(2) Date of each donation;
(3) Description of each item donated;
(4) Amount deducted under section 170 of the IRC
for the contributed item;
(5) Business organization's basis in the
contributed item;
(6) Total amount of unrealized appreciation for
the contributed item; and
(7) The portion of
the federal contribution carryover attributable to a
(c) The amount listed under (b)(7), above, shall
be utilized to increase the business organization's gross business profits in
subsequent years as the contribution carryover is used to reduce federal
taxable income.
(d) When a contribution becomes a
(1) Be considered fully taken in the year it is given;
(2) Not be endowed with special federal tax
attributes beyond the scope of the language of RSA 77-A:1, X, such as, but not
limited to, the federal carryover capabilities of unused charitable
contributions; and
(3) Not be carried over to a subsequent business
profits tax return.
Source. #2567, eff 12-28-83;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; ss by #5490, eff 10-19-92;
amd by #6675, eff 1-27-98; ss and moved by #6853, eff
9-23-98 (from Rev 303.03); ss by #8709, eff 8-25-06; ss by #10758, eff
1-16-15
Rev 303.03
Net Operating Loss Deduction.
(a)
Section 172 of the IRC in effect December 31, 1996, for purposes of calculating
the amount of any net operating loss deduction allowed under RSA 77-A:4, XIII,
shall be followed, except:
(1) The carryback
of loss required by IRC section 172 (b)(1) is not required for
(2)
The amount is limited
as provided in (c), (d), and (e), below.
(b) Net operating losses may be carried forward
for 10 years following the loss year.
(c) Business organizations, subject to RSA
77-A:3, regarding the apportionment of income shall apportion any net operating
loss carried forward using the formula provided in RSA 77-A:3 and Rev 304.
(d) Combined groups with more than one member
subject to RSA 77-A shall:
(1) Calculate separate apportionment percentages
for each business organization as follows:
a. The denominators used to calculate these
percentages shall be the sales, payroll and property
denominators of the combined group; and
b. The numerators shall be the
(2) Treat each business organization’s
apportioned share of the combined loss amount as a tax attribute which remains
with that business organization;
(3) Total the
apportioned loss carry forward amounts of each business organization in
the combined group possessing such tax
attributes; and
(4) Apply the result in (3) above as a deduction
from the gross business profits of the combined group before apportionment
under RSA 77-A:3 in the taxable period
in which the deduction is to be used.
(e) The net operating loss carry forward
calculated in either (a), (c) or (d) above, shall be limited as provided in RSA
77-A:4 XIII, (a), (b), (c), (d) and (e) for each business organization.
(f) The resulting net operating loss shall be
applied to the gross business profits before apportionment under RSA 77-A:3.
(g) Business organizations availing themselves of
the net operating loss deduction shall:
(1) Maintain
detailed records that confirm each step in the calculation of the:
a. Net
operating loss;
b. Net
operating loss carry forward; and
c. Net
operating loss deduction amounts; and
(2) Retain the
federal and state tax returns and the detailed records relating to a net
operating loss for all taxable periods to which the net operating loss relates.
(h) During a
department audit of a taxable period where a
(1) Provide the
department with all state and federal tax returns and detailed records with an
impact on the proper calculation of the deduction taken by the business organization;
(2) Not receive
a refund for a prior year overpayment nor be assessed additional tax liability
for prior year deficiencies resulting from an inquiry that reveals adjustments
to prior taxable period net operating loss calculations would be appropriate in
the liability of the business organization in any of the prior taxable periods
outside the statute of limitations;
(3) Deduct the
appropriate New Hampshire net operating loss deduction in the audit years as if
the extra-statutory year adjustments had been made; and
(4) Adjust the
carry forward amount in the years subsequent to the
audit year.
Source.
#2012, eff 5-5-82; amd
by #2403, eff 6-27-83; ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; ss
by 5355, eff 3-16-92; ss by #5490, eff 10-19-92; ss and moved by #6853, eff
9-23-98 (from Rev 303.04); rpld and ss by #8709, eff
8-25-06; amd by #10233, eff 11-21-12; ss by #10758, eff
1-16-15; amd by #12906, eff 10-23-19
Rev 303.04 Interest Income Derived from Notes, Bonds
and Other Securities of the
(a) For purposes of this section, “other securities”
means a long-term indebtedness similar to a bond that
can be sold or exchanged by the owner.
(b) Deposits, such as demand deposits, timed deposits or certificates of deposits, placed in financial
institutions of the
(c) Business organizations shall deduct only
interest which is received directly or indirectly from direct obligations of
the
(d) Business organizations, upon a request from
the department, shall provide documentation showing that the interest was from
a direct obligation of the
(e) The documentation provided in (d) above shall
indicate that the obligation:
(1) Was in writing;
(2) Was interest bearing;
(3) Contained a binding promise by the
(4) Contained specific congressional
authorization pledging the full faith and credit of the
(f) Business
organizations shall deduct that portion of interest from US obligations
represented by gross business profits, net
of business expenses relating to the obligation as provided in RSA 77-A:4, II.
(g) Interest received on obligations from
organizations where the United States guarantees, but is not the principal
obligor of the debt, shall not qualify for the deduction provided in RSA
77-A:4, II.
Source. #4192, eff 12-23-86;
ss by #5490, eff 10-19-92; amd by #5910, eff
10-14-94; amd by #6026, eff 4-27-95; amd by #6129, eff 11-23-95; ss and moved by #6853, eff
9-23-98 (from Rev 303.05); ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev
303.05 Sale or Exchange of an
Interest or a Beneficial Interest in a Business Organization.
(a) A business organization that did not, in a
prior tax period, make a required addition to gross business profits for an
increase of the basis of an asset under RSA 77-A:4, XIV, as in effect on June
20, 2016, due to the sale or exchange of an interest or a beneficial interest in
a business organization before January 1, 2016, shall not be allowed:
(1) A deduction against gross business profits in
any subsequent period for depreciation or amortization on the increased basis
in the asset to the extent of the under-reported addition to gross business profits;
and
(2) An increase in the basis of the asset upon disposition
in a subsequent period to the extent of the under-reported addition to gross
business profits.
(b) For sales or exchanges of interests in
business organizations that occur on and after January 1, 2016:
(1) A business organization’s election or
nonelection under RSA 77-A:4, XIV(b) shall be irrevocable upon the filing of
the original return for the tax period in which the sale or exchange of the
ownership interest occurs; and
(2) A business organization shall be deemed to
have made the election available under RSA 77-A:4, XIV(b) if such business organization
includes in adjusted gross business profits the net increase in the basis of
all assets transferred or sold in the tax period in which the sale or exchange
of the ownership interest occurs.
Source. #12186, eff 5-25-17
PART Rev 304 APPORTIONMENT OF ADJUSTED GROSS BUSINESS PROFITS
Rev 304.01 Availability or Requirement of
Apportionment for Business Organization.
(a) A
(1) Its business activities are conducted both
within and without
(2) The business organization's activities were
sufficient in another state for that state to impose a:
a. Net income tax;
b. Franchise tax based upon net income; or
c. Capital stock tax.
(b) A business organization not domiciled in
(1) Its activities within New Hampshire are sufficient
to meet the due process requirements of the New Hampshire constitution in part
1, article 12 and part 2, articles 5 and 6; and
(2) Its in-state activities exceed the protection
of 15 USC Section 381, P.L. 86-272.
(c) A business organization 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 voluntarily
files and pays a tax referred to in (a)(2), above, which it was not legally required
to do.
(d) A business organization shall determine its
immunity under 15 USC Section 381, P.L. 86-272, by comparing its activities
within
(1) Business activities which exceed the
protection of P.L. 86-272 when conducted in
a. Making repairs or providing maintenance;
b. Owning, maintaining, leasing, or otherwise
using any of the following facilities or property:
1. Repair shop;
2. Parts department;
3. Purchasing office;
4. Employment or recruiting office;
5. Warehousing facilities including the use of
public warehouses;
6. Meeting place for directors, officers or employees;
7. Stock of goods other than samples used
entirely ancillary to the solicitation of orders;
8. Mobile stores such as a truck with a driver
salesman making sales from the vehicle; or
9. Real property, fixtures or equipment of any kind;
c. Collecting current or delinquent accounts;
d. Installing merchandise or equipment or
supervising such work;
e. Conducting
training programs, seminars or lectures for personnel other than personnel
involved only in the solicitation of sales;
f. Investigating, handling, or otherwise
assisting in resolving customer complaints, other than mediating direct
customer complaints when the sole purpose of such mediation is to ingratiate
the sales personnel with the customer;
g. Approving or accepting customer orders;
h. Providing any kind of technical assistance or
services, such as engineering assistance or services, when one of the purposes
thereof is other than the facilitation of the solicitation of orders;
i. Accepting deposits on customer orders;
j. Picking up or replacing damaged or returned
property.
k. Hiring,
training, or supervising personnel, other than personnel involved only in solicitation;
l. Repossessing property;
m. Providing shipping information and coordinating
deliveries;
n. Maintaining a sample or display room in
excess of 14 days at any one location during the taxable period;
o. Carrying samples for sale, exchange or
distribution in any manner for consideration;
p. Consigning tangible
personal property to any person, including an independent contractor;
q. Using agency stock checks or any other
instruments or process by which sales are made within
r. Maintaining, by any representative, an office
or place of business in the home or otherwise that is publicly attributed to
the business organization or to the agent of the business organization in their
agency status, even if such office is for the exclusive use of soliciting orders;
or
s. Conducting any activity in addition to those
described in Rev 304.01(d)(2) which is not entirely ancillary to the
solicitation of orders, even if such activity helps to increase purchases; and
(2) Business activities which fall within the protection
of P.L. 86-272 when conducted in
a. Soliciting orders for sales by any type of advertising;
b. Carrying
samples only for display or for distribution without charge or other consideration;
c. Owning or furnishing motor vehicles to sales personnel;
d. Submitting inquiries and complaints received
to the home office;
e. Checking of customers' inventories without a
charge for the purpose of a replacement order but not for other purposes such
as quality control;
f. Soliciting orders using an in-state resident
representative of the business organization provided the representative
maintains no in-state sales office or place of business whether in-home or
otherwise that is attributable to the business organization or to the business
organization's agent in his agency capacity;
g. Conducting missionary sales activities;
h. Maintaining a sample or display room for 14
days, or less, at any one location during the taxable period;
i. Recruiting, training, or evaluating sales
personnel, including occasionally using homes, hotels or similar places for
meetings with sales personnel;
j. A representative maintaining an
in-home office that is not:
1. Paid for directly or indirectly by the
business organization;
2. Attributable to the business organization; or
3. Attributable to the business organization's
agents in their agency capacity; or
k. Mediating direct customer complaints when the
purpose thereof is solely for ingratiating the sales personnel with the
customer and facilitating requests for orders.
(e) Independent contractors conducting activities
in
(1) Lose its immunity when the activities
include:
a. Maintaining a consignment inventory of the
organization's products other than for purposes of display; or
b. Entering into any
other type of arrangement extending beyond the solicitation of orders; or
(2) Not lose its immunity when the activities
include:
a. Soliciting and making sales for the business
organization; or
b. Maintaining their own office.
(f) A business organization whose activities do
not exceed the protection of P.L. 86-272, claiming exemption under the federal
law and desiring to commence the 3 year statute
of limitation shall:
(1) Indicate on the front page of
their applicable New Hampshire business profits tax return that the business
organization is exempt by typing or clearly printing “exempt under P.L.
86-272”; and
(2) Attaching a
(g) To reconcile the combined reporting method
with the limitations imposed by P.L. 86-272 on states’ taxing jurisdictions, if
any member of a combined group has nexus with New Hampshire, and one member
does not have nexus with New Hampshire or another state the following shall
apply:
(1) An individual business
organization shall be subject to the tax jurisdiction of New Hampshire or
another state for purposes of Rev 304.01 (b) and (c) respectively only on the basis of the separate activities of that individual
business organization and its representatives; and
(2) A business organization shall not be subject
to the tax jurisdiction of New Hampshire or another state for purposes of Rev
304.01 (b) and (c) respectively, merely because an affiliate of the business
organization conducts business activities in New Hampshire or another state
that are unitary with the individual business organization’s business activities.
Source.
#4192, eff
12-23-86; ss by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; amd by #5910, eff 10-14-94; ss by #6853, eff 9-23-98; ss by
#8709, eff 8-25-06; ss by #10758, eff 1-16-15
Rev 304.02 Property Factor.
(a) The property factor shall include:
(1) All the real and tangible personal property,
as defined in Rev 301.26;
(2) Property that is used, is available for use,
or is capable of being used, during the taxable period in the regular course of
the trade or business of the business organization;
(3) Property used in the regular course of
business until its permanent withdrawal from use;
(4) Property, in transit with the property being
included in the numerator of the destination state; and
(5) The value of moveable or mobile property,
such as construction equipment and common carrier vehicles, with the value being
determined for purposes of the property factor on the total time or miles
within a state during the period.
(b) Property or equipment under construction
during the tax period, except inventoriable goods in process, shall be excluded
from the property factor until such property is used or available for use by
the business organization in its regular trade or business.
(c) Property, other than inventory, owned by the
business organization shall be valued at its original cost and 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.
(d) Inventory,
owned by the business organization, shall be included in the property factor in
accordance with the valuation method used for federal income tax purposes.
(e) Property rented by a business organization
shall be valued at 8 times the net annual rental rate.
(f) The net annual rental rate shall be the annual
rent paid or accrued by the business organization less the aggregate annual
sub-rental rates accrued or received from sub-tenants.
(g) Rent shall be the amount payable for the use
of real or tangible property whether designated as a fixed sum or as a
percentage of sales or profits, and includes any
additional amounts due in lieu of rent such as interest and taxes which are
required by the terms of the lease.
(h) Business organizations renting property in
the regular course of a trade or business shall not deduct such rental income
as sub-rents.
(i) Business
organizations utilizing combined reporting shall:
(1) Determine the property includible in the
property factor after having eliminated all of the
inter-group activity; and
(2) Eliminate any intergroup profits from the
valuation of property included in the property apportionment factor.
(j) The beginning and ending average value of owned
property shall be used for the property factor unless material distortions of
the property factor are caused by:
(1) Fluctuations in values existing during the
period; or
(2) The acquisition or disposition of significant
property during the period.
(k) Material distortions shall exist in instances
where the property factor computed using monthly averages is 25% greater or
lesser than the property factor computed using the beginning and ending
average.
(l) Business organizations 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. #2012, eff 5-5-82;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; amd
by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; amd
by #5910, eff 10-14-94; ss by #6853, eff
9-23-98; ss by #8709, eff 8-25-06 (formerly Rev 304.03); ss by #8709, eff
8-25-06; ss by #10758, eff 1-16-15; ss by #12361, eff 8-9-17
Rev 304.03 Payroll Factor.
(a) The total amount of compensation paid to
employees shall be determined based on:
(1) The basis of the business organization's
method of accounting; or
(2) The wages reported on the various state
unemployment tax returns.
(b) The method selected under paragraph (a) above
shall be used in a consistent manner.
(c) Business organizations making a change under
(a) above from one method to another, shall make all adjustments required in order to prevent the inclusion of the identical wages in
the payroll factor for more than one taxable period.
(d) An employer and employee relationship shall
exist before compensation is included in the payroll apportionment
factor.
(e) The employer and employee relationship shall
exist when the individual for whom the services are to be performed has the
right to:
(1) Control and direct the individual performing
the activities in areas greater than the overall results of the work; or
(2) Determine the methods and individuals used in
performing the activity.
(f) Payment made to, or on behalf of, independent
contractors shall not be includible in a business organization's payroll
apportionment factor.
(g) A designation of employee or independent
contractor adopted by the individuals not factually supported shall not change
the relationship that actually exists for purposes of
RSA 77-A:3, I(b).
(h) Business organizations includible in a
combined group shall eliminate all intergroup payments for the use of
another group member's employees with only the compensation actually paid to
the employee being included.
(i) An employee's
compensation shall be included in a state's numerator when:
(1) The employee's base of operations is located
in that state;
(2) The employee's activities are controlled from
within that state in instances where there is no base of operations; or
(3) That state is the employee's state of residency
in instances where:
a. There is no base of operations; and
b. The location from which the employee's
activities are controlled cannot be determined.
Source. #2012, eff 5-5-82;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06 (formerly Rev 304.04); ss by
#10758, eff 1-16-15
Rev
304.04 Sales Factor. For taxable periods ending before December 31,
2021:
(a) Income producing activity shall include any:
(1) Transaction, procedure, or operation directly
engaged in by a business organization resulting in a separately identifiable
item of income; or
(2) Activity which creates an obligation of a
particular customer to pay specific consideration to the business organization.
(b) The sales factor shall include:
(1) Sales less returns and allowances;
(2) Dividends not eligible for the dividend
deduction under RSA 77-A:4, or the factor relief provided in RSA 77-A:3, II(b);
(3) Interest;
(4) Rents;
(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 sales factor numerator for separate
business organizations and all members of a combined group shall include the
sum of:
(1) Sales of tangible personal property,
regardless of the conditions of sale delivered in New Hampshire, other than to
the United States government;
(2) Sales of tangible personal property
originating in New Hampshire to a purchaser in another state in which the
business organization is not taxable or subject to tax;
(3) Sales of tangible personal property
originating in New Hampshire and delivered to the United States government in
any state;
(4) Interest on receivables where the debtor or
the encumbered property is located in New Hampshire;
(5)
Gross receipts from the lease, rental, or other use of real or personal
property located in New Hampshire;
(6) Gross receipts from the licensing or other
use of intangible property when such property is used within New
Hampshire;
(7) Gains or losses from the sale of property
located in New Hampshire;
(8) Capital gains from the sale of business
assets located within New Hampshire;
(9) Dividend income received by business
organizations domiciled in New Hampshire;
(10) Gross receipts for the rendering of personal
services when the services are performed in New Hampshire; and
(11) Other income which is earned in New
Hampshire.
(d) The rental, lease, licensing, or other use of
tangible or intangible personal property in New Hampshire shall be considered a
separate and distinct income producing activity within New Hampshire.
(e) Business organizations utilizing combined
reporting shall determine the costs of performance as used in RSA 77-A:3, I (c)
and Rev 301.11 for each business organization on a separate entity basis.
(f) When an income producing activity results
from the use of personal property within and without New Hampshire during the
taxable period, gross receipts attributable to New Hampshire shall be measured
by one of the following ratios:
(1) Where the amount of time is the most
appropriate measure under the specific facts and circumstances of the business
organization’s activities, 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; or
(2) Where distance is the most appropriate
measure under the specific facts and circumstances of the business
organization’s activities, the distance traveled or covered in New Hampshire as
compared to the total distance traveled or covered everywhere during the
taxable period.
(g) Personal services performed in New Hampshire
shall be a separate income producing activity performed in New Hampshire unless
the business organization demonstrates the activity performed in New Hampshire
is completely dependent upon activities performed by the business organization
in one or more other states.
(h) The rendering of personal services shall be
attributed to New Hampshire if the activity:
(1) Is completely performed in New Hampshire; or
(2) 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) Costs of
performance shall be determined on a separate entity basis consistent with the
separate entity treatment provided in RSA 77-A:1, I notwithstanding that the
taxpayer files a combined report.
(j) In determining the costs directly associated
with the performance of the service in (h) above, the business organization
shall allocate all compensation costs, including benefits, of personnel
rendering the service based on the amount of time spent rendering the service
in New Hampshire as compared to the time spent in rendering the service outside
New Hampshire.
(k) Expenses incurred in obtaining or retaining
customers or clients, including contract negotiations, shall not be costs
directly associated with the performance of the service.
(l)
The sales price shall include all
interest, carrying charge or time-price differential charges, and excise taxes
passed on to the buyer or included as part of the selling price of the product.
(m) Business organizations includible in a combined
group shall eliminate all intergroup transactions with other members of the
combined group for both the numerator and denominator of the sales factor.
Source. #2012, eff 5-5-82;
ss by #2722, eff 5-23-84; ss by #4192, eff 12-23-86; ss by #5490, eff 10-19-92;
ss by #6853, eff 9-23-98;
ss by #8709, eff 8-25-06 (formerly Rev 304.05); ss by
#10758, eff 1-16-15; ss by #13177, eff 3-6-21
Rev
304.041 Sales Factor. For taxable
periods ending on or after December 31, 2021:
(a) The sales factor shall include:
(1) Sales less returns and allowances;
(2) Dividends not eligible for the dividend
deduction under RSA 77-A:4, or the factor relief provided in RSA 77-A:3, II(b);
(3)
Interest;
(4) Rents;
(5) Royalties;
(6) Capital gain net 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.
(b) The sales factor numerator for separate
business organizations and all members of a combined group shall include the
sum of:
(1) Sales of tangible personal property,
regardless of the conditions of sale delivered in New Hampshire, other than to
the United States government;
(2) Sales of tangible personal property
originating in New Hampshire to a purchaser in another state in which the
business organization is not taxable or subject to tax;
(3) Sales of tangible personal property
originating in New Hampshire and delivered to the United States government in
any state;
(4) Ordinary net gains or losses and capital gains
from the sale of real or tangible property, if and to the extent the property
is located in this state;
(5)
Ordinary net gains or losses and capital gains from the sale of intangible
property, if and to the extent the property is used in this state;
(6) Sales, rental, lease, licensing, or other use
of real property, if and to the extent the property is located in this state;
(7)
Rental, lease, licensing, or other use
of tangible personal property, if and to the extent the property is located in this
state;
(8) Sales of services, if and to the extent the
service is delivered to a location in this state;
(9) Sale, rental, lease, license, or other use of
intangible property, if and to the extent the property is used in this state;
(10) Interest income, if and to the extent the
debtor or encumbered property is located in this state;
(11) Dividend income, if and to the extent the
business organization’s commercial domicile is in this state; and
(12) Other income, if and to the extent the income
is derived from sources in this state.
(c)
In the case of the delivery of a service
to a customer by in-person means, the service shall be considered delivered in
New Hampshire if and to the extent that the customer receives the service in
New Hampshire.
(d)
In the case of the delivery of a service
to a customer by electronic transmission, the service shall be considered delivered
in New Hampshire if and to the extent that the taxpayer’s customer receives the
service in New Hampshire.
(e)
In the case of the delivery of a service
by electronic transmission, where the service is delivered electronically to
end users or other third-party recipients through or on behalf of the customer,
the service shall be considered delivered in New Hampshire if and to the extent
that the end users or other third-party recipients are in New Hampshire.
(f)
In the case of the delivery of a
professional service to a customer other than by in-person means, the service shall
be considered delivered in New Hampshire if and to the extent that the customer
receives the benefit of the service in New Hampshire.
(g)
In the case of sales other than sales of
tangible personal property, if the state or states of assignment cannot be
determined, the state or states of assignment shall be reasonably approximated.
Methods to reasonably approximate such sales shall include, but not be limited
to, multiplying such sales by a percentage that equals the ratio that the
population of New Hampshire bears to the combined total population of every
state within the United States where such business organization is taxable or
subject to tax. The need, and methodology
used, for reasonable approximation shall be determined on a separate entity
basis consistent with the separate
entity treatment provided in RSA 77-A:1, I, notwithstanding that a combined
report is filed.
(h)
In the case of sales other than sales of
tangible personal property, if the taxpayer is not taxable in a state to which
a sale is assigned, or if the state of assignment cannot be determined or
reasonably approximated, such sale shall be excluded from the denominator of
the sales factor.
(i) The sales price
shall include all interest, carrying charges or time-price differential charges,
and excise taxes passed on to the buyer or included as part of the selling
price of the product.
(j) Business organizations includible in a combined
group shall eliminate all intergroup transactions with other members of the
combined group for both the numerator and denominator of the sales factor.
Source.
#13177, eff
3-6-21
Rev 304.05 Business Organizations Seeking a Modification
of Apportionment Provisions.
(a) A business organization shall petition the
commissioner in writing by separate cover for approval prior to using the
modified apportionment formula provided in RSA 77-A:3.
(b) The petition for use of the modification of
the apportionment formula shall:
(1) Be mailed to:
Commissioner
New Hampshire
Department of Revenue Administration
(2) Set forth a complete statement of the facts
relating to the request including:
a. For all interested parties:
i. Full names and addresses;
ii. Taxpayer identification numbers; and
iii. Department license numbers, if any;
b. A full and precise statement of the necessity
for the modification;
c. A detailed description of the business
activity which necessitates the modification; and
d. Evidence supporting the business
organization's petition including:
i. Court decisions on the matter; and
ii. True copies of all contracts, deeds, agreements,
instruments, or other documents demonstrating the necessity of the modification;
(3) Reference to the statutory provisions
relating to the subject of the petition;
(4) A description of the modified formula
proposed by the business organization; and
(5) A statement whether or not,
to the best of the petitioner's knowledge, the modification is the subject of prior
petition requests of a similar or identical factual nature.
(c) The information in the
petition shall be reviewed by the commissioner’s designee, to determine whether
the requested modification measures the activity being conducted in
(d) A petitioner may appeal the department’s written determination and
request 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.
(e) An
appeal shall be filed, pursuant
to Rev 200, within 60 days of the notice of the determination of the
commissioner’s designee.
(f) The use of a separate accounting result which
differs from the standard apportionment result shall not prove the need for, or
the acceptability of, a modified apportionment formula.
(g) If the commissioner disapproves a petition,
no return shall be considered filed by the business organization until a proper
apportionment schedule is submitted to the department.
(h) The use of a modified apportionment formula by
a business organization without prior written approval or final hearing order
of the commissioner shall:
(1) Constitute a willful violation of RSA 77-A:3;
and
(2) Not be considered filed for purposes of RSA
77-A:6, RSA 77-A:1, VII; and Rev 307 until such approval has been obtained from
or ordered by the commissioner.
(i) A copy of the
commissioner's approval letter shall be attached to all subsequent returns
filed.
Source. #4192, eff 12-23-86;
ss by #4438, eff 6-22-88; ss by #5490, eff 10-19-92; amd
by #5910, eff 10-14-94; ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06 (formerly
Rev 304.06); ss by #10758, eff 1-16-15
Rev
304.06 Use of Special Industry
Apportionment Provisions. Paragraphs
(a) through (e) shall apply to taxable periods ending before December 31, 2021 and paragraph (f) shall apply to taxable periods ending
on or after December 31, 2021 as follows:
(a) A business organization, which is not a
member of a combined group, may elect to use one of the industry specific
apportionment provisions in Rev 304.07 through Rev 304.11, provided more than
50% of the business organization’s:
(1) Gross receipts for the taxable period are
from sources relating to the industry identified by the rule; and
(2) Total assets on the last day of the taxable
period are commonly related to the industry identified by the rule.
(b) A business organization, which is a member of
a combined group, may elect to use one of the industry specific apportionment
provisions in Rev 304.07 through Rev 304.11 provided more than 50% of the
combined group’s:
(1) Gross receipts for the taxable period are
from sources relating to the industry identified by the rule; and
(2) Total assets on the last day of the taxable
period are commonly related to the industry identified by the rule.
(c) The business organization or group of
business organizations electing to use the industry specific apportionment
provisions contained in Rev 304.07 through Rev 304.11 shall continue to use the
apportionment provisions until:
(1) The department grants, in writing, a request
made to the department to change the method used; and
(2) The department approves of a change in the
apportionment method upon a showing that the business organizations:
a. No longer meets the
requirements to use special industry apportionment provisions; or
b. Circumstances have changed so
that the use of special industry apportionment provisions no longer accurately
reflects the business organization’s business activity in New Hampshire.
(d) Unless otherwise indicated, the industry
specific apportionment provision elected by the business organization shall
apply in its entirety.
(e) If further adjustments to the formula are
necessary to accurately reflect the business organization’s business activity
in New Hampshire, the business organization may petition pursuant to Rev 304.05,
or the commissioner may require, modification under RSA 77-A:3, II.
(f) A business organization or combined group
shall use one of the industry specific apportionment provisions in Rev 304.07
through Rev 304.11, provided more than 50% of the business organization’s or
combined group’s:
(1) Gross receipts for the taxable period are
from sources relating to the industry identified by the rule; and
(2) Total assets on the last day of the taxable
period are commonly related to the industry identified by the rule.
Source. #5910, eff 10-14-94;
ss by #6853, eff 9-23-98; ss by #6962, eff 3-25-99; ss by #8709, eff 8-25-06;
ss by #10758, eff 1-16-15; ss by #13177, eff 3-6-21
Rev 304.07 Adjustments Required to Apportionment
Factors for Airline Industries.
(a) For purposes of this section,
the following definitions shall apply:
(1) “Aircraft ready for flight” means aircraft
which are:
a. Owned or acquired through
rental or lease;
b. In the possession of the
business organization; and
c. Available for service on the
business organization's routes or charters;
(2) “Commercial airlines” means business
organizations which operate aircraft in the income producing activity of
carrying passengers or cargo for remuneration;
(3) “Cost of aircraft by type” means the average
original cost, as calculated by the business organization, by type of aircraft
ready for flight;
(4) “Departures” means all takeoffs whether they
are regularly scheduled service or charter flights that occur during the
taxable period excluding takeoffs where the sole purpose of the departure is
the maintenance or ferrying of the aircraft;
(5) “Mobile payroll” means the total compensation
determined in accordance with Rev 304.034 for flight crew and maintenance
facility personnel;
(6) “Mobile property” means:
a. Aircraft;
b. Engines;
c. Transmissions;
d. Electronic components; or
e. Other parts of an aircraft
capitalized or inventoried for federal income tax purposes
or which generally move from location to location in the organization's route
system;
(7) “NH departures” means departures occurring
from within the geographical confines of New Hampshire;
(8) “Non-mobile payroll” means the total
compensation determined in accordance with Rev 304.03 for all employees of the
business organization other than flight crew and maintenance facility personnel;
(9) “Non-mobile property” means tangible personal
property used in the operation of a commercial airline and permanently located
at a particular place of business;
(10) “Non-transportation sales” means all receipts
of the business organization other than those classified as transportation
sales; and
(11) “Transportation sales” means the receipts
from transporting passengers, freight or mail and the sale of products or services
associated with such transportation such as, but not limited to, liquor sales,
and audio headset or pet crate rentals.
(b) Commercial airlines shall apportion their
income to New Hampshire using the apportionment provisions contained in
RSA 77-A:3 and Rev 304.02, Rev
304.03, Rev 304.04, and Rev 304.041, subject to the
adjustments in paragraphs (c), (d), and (e), below.
(c) The property factor's
components shall be calculated utilizing the following provisions:
(1) The factor shall be the sum of average New
Hampshire mobile property and average New Hampshire non-mobile property,
divided by the sum of average mobile property everywhere and average non-mobile
property everywhere;
(2) Average New Hampshire non-mobile property,
and average non-mobile property everywhere shall be calculated using the
provisions of Rev 304.02;
(3) Average mobile property everywhere shall include
the average value, as provided in Rev 304.02 (j), of all mobile property owned,
rented and used by the business organization except that aircraft ready for
flight shall be included based on the cost of aircraft by type;
(4) Average New Hampshire mobile property shall
equal average mobile property everywhere:
a. Multiplied by
b. Divided by total departures;
and
c. Departures of aircraft shall be
weighted based upon the cost of aircraft by type; and
(5) The property factor shall be expressed by the
formula as follows:
|
Mobile Property Everywhere |
X |
NH Departures -------------------- Total Departures |
= |
NH Mobile
Property |
|
|
|
|
|
|
|
Average NH Mobile Property |
+ |
|
|
Total Average NH
Property |
|
------------------------------------------------------------------------------- |
= |
--------------- |
||
|
Average |
+ |
Average
Non-Mobile Property Everywhere |
|
Total Average
Property Everywhere |
(d) The payroll factor's components shall be
calculated utilizing the following provisions:
(1) The factor shall be the sum of New Hampshire
mobile payroll and New Hampshire non-mobile payroll, divided by the sum of
mobile payroll everywhere and non-mobile payroll everywhere;
(2) New Hampshire non-mobile payroll, and
non-mobile payroll everywhere shall be calculated using the provisions of Rev 304.03;
(3) Mobile payroll everywhere shall include the
total compensation of the business organization's flight crews and maintenance
facility personnel;
(4) New Hampshire mobile payroll shall equal
mobile payroll everywhere:
a. Multiplied by
b. Divided by total departures;
and
c. Departures of aircraft shall be
weighted based upon the cost of aircraft by type; and
(5) The payroll factor
shall be expressed by formula as follows:
|
Mobile Payroll Everywhere |
X X |
NH Departures -------------------- Total Departures |
= |
NH |
|
|
|
|
|
|
|
NH |
+ |
NH Non-Mobile
Payroll |
|
Total NH Payroll |
|
--------------------------------------------------------------------------------- |
= |
--------------- |
||
|
Mobile Payroll
Everywhere |
+ |
Non-Mobile
Payroll Everywhere |
|
Total Payroll
Everywhere |
(e) The
sales factor's components shall be calculated utilizing the following
provisions:
(1) The sales factor shall be the sum of New
Hampshire transportation sales and New Hampshire non-transportation sales,
divided by the sum of transportation sales everywhere and non-transportation
sales everywhere;
(2)
New Hampshire non-transportation sales
and non-transportation sales everywhere shall be calculated using the
provisions of Rev 304.04 and Rev 304.041;
(3) Transportation sales everywhere shall include
the total transportation sales of the business organization;
(4) New Hampshire transportation sales shall
include the receipts from all passengers and cargo enplaned in New Hampshire;
and
(5) The sales factor shall be expressed by
formula as follows:
|
|
|
|
|
|
|
NH
Transportation Sales |
|
NH Non-Transportation
Sales |
|
Total NH Sales |
|
-------------------------- |
+ |
--------------------------------- |
= |
--------------- |
|
Transportation
Sales Everywhere |
|
Non-Transportation
Sales Everywhere |
|
Total Sales Everywhere |
(f) The business organization shall maintain the
records necessary to substantiate the departures by type of aircraft and the
receipts for passengers and cargo that enplaned in New Hampshire and
everywhere.
Source. #5910, eff 10-14-94;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15;
ss by #13177, eff 3-6-21
Rev 304.08 Adjustments Required To
Apportionment Factors For Printing and Publishing Industries.
(a) For purposes of this section, the following
definitions shall apply:
(1) “Outer-jurisdictional property” means
tangible personal property, such as orbiting satellites and undersea
transmission cables, which are not physically located in any particular
state, that are:
a. Owned or rented by the business
organization; and
b. Used in the business of:
1. Publishing;
2. Licensing;
3. Selling; or
4. Otherwise distributing printed material;
(2) “Print” or “printed material” means the
physical or digital embodiment or printed version of any thought or expression
including, without limitation:
a. A play;
b. A story;
c. An article;
d. A column; or
e. Other literary, commercial,
educational, artistic or other written or printed work
and may take the form of:
1. A book;
2. A newspaper;
3. A magazine;
4. A periodical;
5. A trade journal; or
6. Any other form of printed matter contained on
any medium or property;
(3) “Purchaser” or “subscriber” means:
a. The individual
location of the:
1. Residence;
2. Business; or
3. Other outlet which is the final recipient of
the print or printed material; and
b. Not a wholesaler or other distributor of print or
printed material; and
(4) “Terrestrial facility” means any:
a. Telephone line;
b. Cable;
c. Fiber optic;
d. Microwave transmission or
reception equipment;
e. Earth station;
f. Satellite dish; or
g. Antennae or other relay system
or device that is used to:
1. Receive;
2. Transmit;
3. Relay; or
4. Carry any data, voice, image, or other
information transmitted from or by any outer-jurisdictional property to the
ultimate recipient thereof.
(b) Business organizations having income derived
from the publishing, sale, licensing, or other distribution of books, newspapers,
magazines, periodicals, trade journals, or other printed material, shall
apportion their income to New Hampshire using the apportionment
provisions contained in RSA 77-A:3, Rev 304.02, Rev 304.03, Rev 304.04, and Rev 304.041, subject to the adjustments
in paragraphs (c), (d), and (e), below.
(c) The property factor's components shall be
calculated utilizing the following provisions:
(1) The property factor shall be the sum of
average New Hampshire outer-jurisdictional property and average New Hampshire
non-outer jurisdictional property, divided by the sum of average
outer-jurisdictional property everywhere and average non-outer jurisdictional
property everywhere;
(2) Average
(3) Average outer-jurisdictional property everywhere shall include the average value, as
provided in Rev 304.02(j), of all outer-jurisdictional
property owned, rented, and used by the business organization;
(4) Average New Hampshire outer-jurisdictional
property shall equal average outer-jurisdictional property everywhere:
a. Multiplied by the number of
uplinks and downlinks used during the taxable period to transmit from New
Hampshire and to receive in New Hampshire any data, voice, image, or other
information; and
b. Divided by the total number of
uplinks and downlinks the business organization used for transmissions everywhere;
(5) Should information requested in (c)(4) above
not be available or should such measurement of activity not be applicable to
the type of outer-jurisdictional property used by the business organization,
the average New Hampshire outer-jurisdictional property shall be calculated as
follows:
a. Multiplied by the amount of time,
in terms of hours and minutes of use or such other measurement of use of
outer-jurisdictional property used during the taxable period to transmit from
New Hampshire and to receive in New Hampshire any data, voice, image, or other
information; and
b. Divided by the total amount of
time or other measurement of use that was used for transmissions everywhere;
(6) Outer-jurisdictional property shall be
considered to have been used by the business organization in its business activities within
New Hampshire when such property, wherever located, has been employed by the
business organization in any manner in the following functions:
a. The publication, sale,
licensing, or other distribution of books, newspapers, magazines, or other
printed material; and
b. Transmission of any data,
voice, image, or other information to or from New Hampshire, through an earth
station or terrestrial facility located in New Hampshire; and
(7) The property factor shall be expressed by
formula as follows:
|
Average NH Outer-Jurisdictional Property |
+ |
Average NH
Non-Outer Jurisdictional Property |
|
Total Average NH Property |
|
-------------------------------------------------------------------------------------- |
= |
--------------- |
||
|
Average
Outer-Jurisdictional Property
Everywhere |
+ |
Non
Outer-Jurisdictional Property
Everywhere |
|
Total Average
Property Everywhere |
(d) The payroll factor shall be calculated in
accordance with Rev 304.03.
(e) The sales factor's components shall be
calculated in the following manner:
(1) The sales factor shall be the sum of New
Hampshire print or printed material sales and New Hampshire non-print or
non-printed material sales, divided by the sum of print or printed material
sales everywhere and non-print or non-printed material sales everywhere;
(2) New Hampshire non-print or non-printed
material sales, and non-print or non-printed material sales everywhere, shall
be calculated using the provisions of Rev 304.04 and Rev 304.041;
(3) Print or printed material sales everywhere shall
include all receipts from advertising and the sale, rental, or other use of the
business organization's printed materials or customer lists;
(4) New Hampshire print or printed material sales
for each publication shall be equal to the receipts calculated in (e)(3) above:
a. Multiplied by the business organization's in-state circulation to
purchasers and subscribers of its printed material; and
b. Divided by its total
circulation to purchasers and subscribers everywhere;
(5) In the event the purchaser or subscriber is
the United States government or the business
organization is not taxable in a state, the gross receipts from all sources
associated with the printed materials, shall be included in the numerator of
the sales factor of New Hampshire if the printed material or other property is
shipped from an in-state:
a. Office;
b. Store;
c. Warehouse;
d. Factory; or
e. Other place of storage or business;
(6) The method used to determine the circulation
of a publication shall be used consistently between the numerator and the
denominator and from year to year; and
(7) The sales factor shall be expressed by
formula as follows:
|
NH Print or
Printed Material Sales |
+ |
NH Non-Print or
Non-Printed Material Sales |
|
Total NH Sales |
|
|
----------------------------------------------------------------------------------------- |
= |
---------------- |
|||
|
Print or Printed
Material Sales Everywhere |
+ |
Non-Print or
Non-Printed Material Sales Everywhere |
|
Total Sales Everywhere |
|
Source. #5910, eff 10-14-94;
ss by #6853, eff 9-23-98; ss by #8709, eff 8-25-06; ss by #10758, eff 1-16-15;
ss by #13177, eff 3-6-21
Rev 304.09 Adjustments Required to Apportionment Factors For Television and Radio Broadcasting Industries.
(a)
For purposes of
this section, the following definitions shall apply:
(1)
“Broadcast” means the transmission of radio programming by an electronic
signal conducted by:
a. Radio waves;
b. Microwaves;
c. Wires;
d. Lines;
e. Coaxial cables;
f. Wave guides;
g. Fiber optics; or
h. Other conduits of communications;
(2)
“Film” means performances or productions
telecast, live or otherwise, including, but not limited to:
a. News;
b. Sporting events;
c. Plays;
d. Stories; and
e. Other literary,
commercial, educational, or artistic works, in the format of a motion picture,
a videotape, video disc, or other medium;
(3)
“Outer-jurisdictional property” means tangible personal property, such
as orbiting satellites, undersea transmission cables, which are not physically
located in any particular state, that are:
a. Owned or rented by the business organization;
and
b. Used in the business of
1. Telecasting;
or
2. Broadcasting;
(4)
“Placed into service” means when the film
is first telecast to the primary audience for which the film was created;
(5) “Radio” means
performances or productions broadcast, live or otherwise, on radio, including,
but not limited to:
a. News;
b. Sporting events;
c. Plays;
d. Stories; or
e. Other literary, commercial, educational, or
artistic works, in the format of an audiotape, disc, or other medium;
(6) “Rent”
means the payments or consideration such as, but not limited to, license fees
provided for the broadcast or other use of television or radio programming;
(7) “Subscriber”
means the individual location of the residence or other outlet which is the
ultimate recipient of the transmission;
(8) “Tangible personal property” means property
other than:
a. Real estate;
b. Film; or
c. Radio programming; and
(9) “Telecast” means the transmission of
television programming by an electronic signal conducted by:
a. Radio waves;
b. Microwaves;
c. Wires;
d. Lines;
e. Coaxial cables;
f. Wave guides;
g. Fiber optics; or
h. Other conduits of communications.
(b)
Business organizations shall apportion their income to New Hampshire
using the apportionment provisions contained in RSA 77-A:3, Rev 304.02, Rev
304.03, Rev 304.04, and Rev 304.041,
subject to the adjustments in (f), (g), (h), and (i)
below.
(c) Each
episode of a series of films produced for television shall constitute a
separate film notwithstanding that the series relates to the same principal
subject and is produced during one or more television seasons.
(d)
Each episode of a series of radio programming produced for radio
broadcast shall constitute separate radio programming notwithstanding that the series
relates to the same principal subject and is produced during one or more taxable
periods.
(e)
A film shall not be placed in service merely
because it is:
(1) Completed
and therefore in a condition or state of readiness and availability for telecast;
(2) Telecast to
prospective sponsors or purchasers; or
(3) Shown in
preview before a select audience.
(f)
The property factor for television and radio broadcasters shall be:
(1) The sum of
New Hampshire programming property and New Hampshire non-programming property,
divided by the sum of total programming property and total non-programming
property; and
(2) The
components calculated in accordance with the provisions of Rev 304.02, and in
the following manner:
a. Total non-programming property shall include
all real and tangible personal property other than outer-jurisdictional
and film or radio programming property owned, rented, or employed by the
business organization;
b. New Hampshire non-programming property shall
include all real and tangible personal property other than outer-jurisdictional and film or radio programming property owned,
rented, or employed by the business organization in New Hampshire;
c. Total programming property shall be the
average cost, determined as provided in Rev 304.02(j), of all
outer-jurisdictional and film or radio programming property owned, rented, and
used by the business organization;
d. New Hampshire programming property shall be
the average costs, determined as provided in Rev 304.02(j), of all
outer-jurisdictional and film or radio programming property owned, rented, and
used by the business organization in New Hampshire;
e.
1. The average
cost of outer-jurisdictional property everywhere:
i.
Multiplied by the amount of use, in hours and minutes or other
comparable form of measurement, of outer-jurisdictional property during the
taxable period to transmit from New Hampshire and to receive in New Hampshire
any data, voice, image, or other
information; and
ii.
Divided by the total amount of time or other comparable measurement that
outer-jurisdictional property was used for transmissions everywhere;
2. The original
cost of audio or video cassettes, discs or similar media containing film or radio programming and
intended for sale or rental by the business organization for home viewing or
listening within New Hampshire; and
3. To the
extent the business organization licenses or otherwise permits others to
manufacture or distribute audio or video cassettes, disc, or other media
containing film or radio programming for home viewing or listening, the
license, royalty, or other fees reviewed by the business organization
capitalized at a rate of 8 times the gross receipts derived there from during the
taxable period; and
f.
The property factor shall be expressed by formula as follows:
|
|
|
|
|
|
|
Average NH Outer-Jurisdictional & Programming
Property |
+ |
|
|
Total Average NH Property |
|
----------------------------------------------------------------------------- |
= |
--------------- |
||
|
Average Outer-Jurisdictional & Programming
Property Everywhere |
+ |
Average Non- Outer Jurisdictional &
Non-Programming Property Everywhere |
|
Total Average Everywhere Property |
(g)
The payroll factor shall be calculated in
accordance with Rev 304.03.
(h)
The sales factor shall be the sum of New
Hampshire programming sales and New Hampshire non-programming sales, divided by
the sum of programming sales everywhere and non-programming sales everywhere.
(i) The sales factor
components shall be calculated in the following manner:
(1)
Non-programming sales, both everywhere and in New Hampshire, shall be
calculated using the provisions of Rev 304.04 and Rev 304.041;
(2) Programming
sales everywhere shall include all receipts from advertising and the sale,
rental or other use of the business organization’s film or radio programming or
customer lists; and
(3) New
Hampshire programming sales shall equal programming sales everywhere:
a.
Multiplied by the business organization’s in-state audience; and
b.
Divided by the business organization’s total audience everywhere;
(4) The method
used to determine the audience shall be used consistently to determine both
in-state audience and total audience, and used consistently from year to year;
and
(5) The sales
factor shall be expressed by formula as follows:
|
NH Programming Sales |
+ |
NH Non-Programming Sales |
|
Total NH Sales |
|
------------------------------------------------------------------------------------- |
= |
---------------- |
||
|
Programming Sales Everywhere |
+ |
Non-Programming Sales Everywhere |
|
|