CHAPTER Rev 2400 BUSINESS ENTERPRISE TAX

Statutory Authority: RSA 21-J:13, I; 77-E:1, XVII; 77-E:11, II

PART Rev 2401 DEFINITIONS

Rev 2401.01 “Affiliated group” means:

(a) “Affiliated group” as defined in RSA 77-E:3, II, for corporate enterprises; or

(b) A group of non-corporate business enterprises, if the chain of business enterprises is connected through ownership with a common business enterprise, provided that:

(1) The common parent business enterprise owns directly at least 80% of the total ownership interest in at least one of the includible business enterprises; and

(2) An ownership interest with at least 80% of the total ownership interest is owned directly by one or more of the other includible business enterprises.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2401.02 “Business enterprise” means “business enterprise” as defined in RSA 77-E:1, III.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2401.03); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2401.03 “Capital” means the amount personally contributed to the business enterprise by the owners in exchange for their proprietary interest in the enterprise plus the amounts subsequently contributed by such individuals less any amounts withdrawn from the enterprise by the owners.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2401.05); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2401.04 “Client company” means “client company” as defined in RSA 277-B:2, III.

Source. #11044, eff 2-24-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2401.05 “Decentralized autonomous organization” means “decentralized autonomous organization” as defined in RSA 301-B:5, VIII and treated as an entity formed under RSA 304-C for the purpose of state of New Hampshire taxation pursuant to RSA 301-B:28, III and RSA 301-B:29.

Source. #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2401.06 “Costs of performance”, pursuant to RSA 77-E:4, I(c)(3) in effect prior to January 1, 2021 for taxable periods ending before December 31, 2021, reprinted in Appendix B, 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 business enterprise.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2401.07); ss by #11032, eff 1-29-16; renumbered by #11044 (formerly Rev 2401.04); ss by #13177, eff 3-6-21; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.05)

Rev 2401.07 “Employee leasing company” means “employee leasing company” as defined in RSA 277-B:2, V.

Source. #11044, eff 2-24-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.06)

Rev 2401.08 “Delivered to a location in this state” means the location in the state of New Hampshire 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; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.07)

Rev 2401.09 “Department” means the New Hampshire department of revenue administration.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2401.08); ss by #11032, eff 1-29-16; renumbered by #11044 (formerly Rev 2401.05); renumbered by #13177 (formerly Rev 2401.07); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.08)

Rev 2401.10 “Distributions” means a transfer of money or property from a business enterprise to its owners related to their ownership interest.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (formerly Rev 2401.12); ss by #11032, eff 1-29-16 (from Rev 2401.05); renumbered by #11044 (formerly Rev 2401.06); renumbered by #13177 (formerly Rev 2401.08); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.09)

Rev 2401.11 “Internal Revenue Code (IRC)” means the “United States Internal Revenue Code” as defined in RSA 77-E:1, XVII.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (formerly Rev 2401.13); ss by #11032, eff 1-29-16 (from Rev 2401.06); renumbered by #11044 (formerly Rev 2401.07) ); renumbered by #13177 (formerly Rev 2401.09); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.10)

Rev 2401.12 “Net earnings from self-employment” means the gross income derived by a business enterprise from trade or business carried on by the enterprise less deductions, not including those for guaranteed payments, allowed by chapter 1 of the IRC and attributable to such trade or business.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07; renumbered by #11044, eff 2-24-16 (from Rev 2401.08)

New. #9065, eff 1-10-08 (formerly Rev 2401.16); ss by #11032, eff 1-29-16; (from Rev 2401.07); renumbered by #11044 (formerly Rev 2401.08); renumbered by #13177 (formerly Rev 2401.10); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.11)

Rev 2401.13 “Personal investment activities,” as used in RSA 77-E:1, VI(f), means the actions taken by one or more individuals, or charitable remainder trusts, to place personal capital or wealth in such a way as to secure income or profit from its employment without the individual or trust becoming involved in the activities of a trade or business, or the rental of property, other than the rental of a residence or vacation home to the beneficiaries or grantors of the trust in which the capital is placed.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (formerly Rev 2401.18); ss by #11032, eff 1-29-16 (from Rev 2401.08); renumbered by #11044 (formerly Rev 2401.09); renumbered by #13177 (formerly Rev 2401.11); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.12)

Rev 2401.14 “Real and tangible personal property,” as used in RSA 77-E:4, I(b), means land, buildings, improvements, equipment, merchandise, or manufacturing inventories, leasehold improvements, and other similar property that reflects the enterprise's business activities.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (formerly Rev 2401.19); ss by #11032, eff 1-29-16 (from Rev 2401.09); renumbered by #11044 (formerly Rev 2401.10); renumbered by #13177 (formerly Rev 2401.12); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.13)

Rev 2401.15 “Revenue producing activity,” pursuant to RSA 77-E:4, I(c)(3) in effect prior to January 1, 2021 for taxable periods ending before December 31, 2021, reprinted in Appendix B:

(a) Means transactions and activities directly engaged in by the business organization for the ultimate purpose of obtaining gain or profit including, but not limited to, the following:

(1) The rendering of personal services by employees or the utilization of tangible and intangible property by the business enterprise in performing a service;

(2) The sale, rental, leasing, or other use of real property;

(3) The sale, rental, leasing, licensing, or other use of tangible personal property; or

(4) The sale, licensing, or other use of intangible personal property; and

(b) Does not mean the following:

(1) Transactions and activities performed for the business enterprise by independent contractors or other similar persons or entities; or

(2) The mere holding of a security interest in intangible property.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (formerly Rev 2401.21); ss by #11032, eff 1-29-16 (from Rev 2401.10); renumbered by #11044 (formerly Rev 2401.11); renumbered by #13177 (formerly Rev 2401.13); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.14)

Rev 2401.16 “State” means:

(a) Any state of the United States or any political subdivision thereof;

(b) The District of Columbia;

(d) A territory or possession of the United States; and

(e) Any foreign country or political subdivision thereof.

Source. #11032, eff 1-29-16 (from Rev 2401.11); renumbered by #11044 (formerly Rev 2401.12); renumbered by #13177 (formerly Rev 2401.14); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36 (formerly Rev 2401.15)

PART Rev 2402 COMPUTATION OF THE ENTERPRISE VALUE TAX BASE

Rev 2402.01 Compensation Element.

(a) The following shall be included in the compensation element:

(1) Wages subject to federal income tax withholding included on an employee's federal Form W-2, “Wage and Tax Statement”;

(2) Compensation specifically exempt from federal withholding such as, but not limited to, contributions by the employer on behalf of employees to:

a. Qualified pension, profit-sharing, and stock bonus plans under IRC section 401; or

b. Annuity or deferred-payment plans under IRC sections 403 and 404;

(3) Fringe benefits provided to, and included in the gross income of, employees for federal income tax purposes, unless such benefits are excluded under (a)(2) above, or are included in gross income solely because the recipient is a partner or shareholder of an "S" corporation;

(4) Imputed interest on a below-market rate loan between an employer and employee to which IRC section 7872 applies;

(5) The amount taken as a deduction for the personal services of a proprietor, partner, or member for business profits tax purposes;

(6) The net earnings from self employment, and guaranteed payments to partners on the partnership’s federal income tax return, not including:

a. The individual’s distributive share from a trade or business conducted by another business enterprise that are amounts reported as a separate entity adjustment under RSA 77-A including, but not limited to, pass-through federal Schedule K-1 income, deductions, and credits;

b. The amount included under (a)(5), above; or

c. Net losses from self-employment;

(7) Wages paid to statutory employees, in accordance with IRC section 3121(d) (3) who file federal Form Schedule C and do not have an employer-employee relationship;

(8) Wages paid to an employee for qualified research and development services reported as a credit and not deducted as an expense by the business enterprise under IRC section 41; and

(9) Wages paid, under RSA 277-B:9, I(a), by an employee leasing company to its leased employees in accordance with Rev 2402.08.

(b) Payments in the form of, or for, services identified in IRC section 3401(a)(1), (9), (10), (13), (14), (15), (16), (18), (19), or (20) shall not be considered compensation for purposes of the compensation element or apportionment.

(c) Compensation paid or accrued for an employee, employed by an affiliated group of business enterprises and performing services for multiple members, shall be included in the compensation element of the entity which:

(1) Is subject to tax in New Hampshire; or

(2) Deducts the individual's compensation for federal income tax purposes provided that:

a. The compensation amount is not included within a management fee charged to the affiliate;

b. The enterprise issuing the individual's federal Form W-2, “Wage and Tax Statement,” charges the affiliate for the actual payroll expenditures; and

c. All affiliated enterprises maintain detailed records to substantiate the amount of compensation paid or accrued for each employee and how such compensation was recorded and deducted by the various affiliates.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; amd by #11044, eff 2-24-16; amd by #12906, eff 10-23-19; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.02 Interest Element.

(a) Interest, as defined in RSA 77-E:1, XI, shall be included in the interest element when it is recognized as an expense for financial accounting purposes of the business enterprise without regard to:

(1) Any limitation on deductibility for federal income tax purposes; or

(2) The capitalization requirements provided in IRC section 263A.

(b) The interest element shall not be reduced by any interest income or other fee income received for the use of its money or property.

(c) When an amount of property is actually transferred by a business enterprise and is not classified as interest, but the substance of the transaction or the relatedness of the parties indicates that the payment was made in lieu of interest, then an amount of interest shall be deemed to have been paid. The amount of deemed interest shall be equal to the amount paid which is in excess of the fair market value of the property transferred.

(d) Imputed interest, pursuant to IRC section 7872, relative to treatment of loans at below market interest rates, shall be included in the interest element.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.03 Dividend Element.

(a) The following transactions between a business enterprise and its owners shall be a dividend:

(1) Property transferred from a business enterprise to an owner with respect to the owner's ownership interest from the accumulated revenues and profits of the business enterprise as defined by RSA 77-E:1, I;

(2) Personal expenditures made by a business enterprise on behalf of an owner except those properly reported as compensation to the owner for federal income tax purposes;

(3) Forgiveness of an owner's indebtedness to the business enterprise unless the amount is:

a. Reported as compensation or interest to the individual for federal income tax purposes; and

b. Included in the compensation or interest elements of the business enterprise value tax base;

(4) Automatic re-investment of property deemed distributed to the owners from accumulated profits into additional stock of the business enterprise; or

(5) Imputed interest on a below market interest rate loan under IRC section 7872.

(b) When property, other than money, is distributed as a dividend, the computation of the dividend amount paid to the owner shall be measured by the property's fair market value determined as of the date of the distribution.

(1) The current year profits of the business enterprise;

(2) The accumulated revenues and profits of the business enterprise; and

(3) The capital of the business enterprise.

(d) Distributions made by “S” corporations shall be a dividend to be included in the dividend element when the distribution is from:

(1) The accumulated adjustment account or the previously taxed income categories; and

(2) Earnings and profits of the corporation accumulated prior to the “S” corporation election being made.

(e) An “S” corporation shall treat an item of income or expense under federal income tax provisions in arriving at the accumulated revenues and profits of the business enterprise, in a manner consistent with that of the “C” corporation.

(f) For corporate business enterprises, other than "S" corporations, the current earnings and profits of the business enterprise shall be determined as they are for federal income tax purposes.

(g) The accumulated revenues and profits of a non-corporate business enterprise shall be the total undistributed net income from all business activities since the inception of operations.

(h) Any undistributed net income retained by the business enterprise and considered capital for federal income tax purposes shall not be considered as such for purposes of the business enterprise tax.

(i) Amounts deducted under RSA 77-A:4, III, for the personal services of the proprietor or partners shall:

(1) Be a deduction in determining the net income from business activities; and

(2) Not be included in the dividend element.

(j) Distributions made by a business enterprise in liquidation or in complete redemption of an owner's interest in the business enterprise shall not be considered as a dividend for business enterprise tax purposes.

k) Amounts included in the compensation element under Rev 2402.01(a)(6) shall not be included in the dividend element.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.04 Grantor Trusts.

(a) The grantor of a grantor trust shall include the compensation, interest, and dividends of the grantor trust within its own business enterprise value tax base.

(b) For purposes of both the business enterprise value tax base and the apportionment factor in instances where a grantor trust has only a portion of its activity considered business activity, the grantor trust shall only be required to report the compensation, interest, and dividends associated with the business activity portion of the business enterprise’s activities.

(c) The exclusion provided by RSA 77-E:1,VI(f), shall apply to a grantor trust that is subject to taxation under section 641 or described in section 664 of the IRC to the extent that such grantor trust limits its activities to personal investment activities as described in Rev 2401.13.

(d) When a grantor of a grantor trust has no other activity beyond that of the grantor trust subject to the business enterprise tax, the grantor trust shall be deemed to be a business enterprise and the grantor is required to report the compensation, interest, and dividends of the grantor trust.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.05 Business Enterprises, Exempt from Tax Under IRC Section 501(c)(3), with Unrelated Business Income.

(a) For purposes of the enterprise value tax base, the exempt business enterprise shall report on the applicable Form BET, “Business Enterprise Tax Return,” the activity associated with the unrelated business income portion of the business enterprise’s activities reported on federal Form 990T.

(b) The business enterprise shall allocate, when there is an overlap between the activities, the compensation and interest between the unrelated business income and exempt activities by basing:

(1) Compensation on the hours spent performing services for the unrelated business activity in relation to the total hours worked; and

(2) Interest on the portion of loan proceeds used for the unrelated business activities in relation to the total loans outstanding.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.06 Business Enterprises Whose Income or Expenses are Federally Reportable by the Owners. Business enterprises, other than grantor trusts, whose income or expenses are reportable by the true owners for federal income tax purposes, shall include all items associated with the enterprise value tax base on its business enterprise tax return.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.07 Non-applicability of Federal Immunity Provision. Since the business enterprise tax is not based on the net income or capital stock of the business enterprise, the provisions of 15 USC section 381, P.L. 86-272 shall not apply to a business enterprise.

Source. #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2402.08 Employee Leasing Companies.

(a) Employee leasing companies shall be solely responsible for paying wages to leased employees pursuant to RSA 277-B:9, I(a).

(b) An employee leasing company and a client company may jointly elect to make the client company solely responsible for including the leased employees’ wages in the client company’s compensation portion of the enterprise value tax base for those wages paid to leased employees.

(c) If the employee leasing company and the client company make such an election, the client company shall be the company eligible for the credit provided in RSA 77-A:5, X.

(d) In order to make the election described in this section, the employee leasing company and the client company shall jointly complete and file Form DP-216, “Employee Leasing Company Business Enterprise Tax (BET) Election,” with the department.

(e) For an election to be effective for any given tax year, the employee leasing company and the client company shall jointly complete and file Form DP-216 prior to the end of the employee leasing company's tax year.

(f) An election described in this section shall remain in effect until both the employee leasing company and the client company notify the department of the termination by completing and filing Form DP-216.

(g) In order to terminate the election described in this section, the employee leasing company and the client company shall jointly complete and file Form DP-216 with the department prior to the end of the employee leasing company’s tax year to which the termination relates.

(h) For both an election and termination of an election, if the client company has a different taxable period than the employee leasing company, the election or termination shall apply to the client company’s taxable period as of the first day of the employee leasing company’s taxable period to which the election or termination relates.

(i) By making the election pursuant to RSA 77-E:13-a and completing and filing Form DP-216, the employee leasing company and the client company agree that the department is authorized to disclose to each named company the information provided on Form DP-216 and any information relevant to the election for the sole purpose of auditing this election.

Source. #11044, eff 2-24-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2403 ADJUSTMENTS TO THE ENTERPRISE VALUE TAX BASE

Rev 2403.01 Net Earnings from Self-Employment Retained the Business Enterprise.

(a) A business enterprise may deduct from its enterprise value tax base, the amount of net earnings from self-employment which:

(1) Are retained and used for the reasonable needs of the business enterprise; and

(2) Have previously been, or are currently being, taxed under RSA 77-A as the business profits of the business enterprise.

(b) The reasonable needs of the business enterprise shall not include the following:

(1) The total amount of any deduction taken for the personal services of a proprietor or partner for business profits tax purposes under RSA 77-A:4, III; or

(2) The amount of funds loaned by the business enterprise to the proprietor, partners, or any directly or indirectly related party under the provisions of the IRC.

(c) The business enterprise shall maintain accounting records that are sufficient to analyze all transactions between the business enterprise and:

(1) The owner(s);

(2) Any related party under the provisions of the IRC; and

(3) The amount of funds needed by the business enterprise for its current and future operations.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2403.02 Dividend Received Deduction.

(a) The dividends received from a member of an affiliated group of business enterprises eligible for the deduction shall be limited to that portion of the dividend included in the payor’s taxable enterprise value tax base.

(b) The business enterprise shall maintain detailed accounting records to:

(1) Document any dividends received that are being deducted from the enterprise value tax base of the recipient business enterprise because they previously have been included in the enterprise value tax base of the payor; and

(2) Calculate the accumulated earnings and profits of the payor.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2403.03 Utilization of Deductions in Arriving at the Taxable Amount of the Enterprise Value Tax Base.

(a) The deduction allowed for compensation from self employment income retained in the business enterprise, as provided in RSA 77-E:3, I, shall be deducted from the compensation element of the tax base to arrive at the compensation amount subject to the apportionment factor.

(b) The deduction allowed for dividends received from members of an affiliated group of business enterprises as provided in RSA 77-E:3, II and III, shall be deducted from the dividend element of the tax base to arrive at the dividend amount subject to the apportionment factor.

(c) In instances where a business enterprise, entitled to a dividend received deduction, has not paid dividends to its owners, the business enterprise shall:

(1) Apportion the dividend received deduction using the dividends apportionment factor determined in accordance with Rev 2404.06 and Rev 2404.061; and

(2) Use such apportioned amount as an offset to either:

a. The taxable compensation portion of the tax base; or

b. The taxable interest portion of the tax base.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2403.04); ss by #11032, eff 1-29-16; ss by #13177, eff 3-6-21; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2404 APPORTIONMENT OF THE ENTERPRISE VALUE TAX BASE

Rev 2404.01 Definitions. For purposes of this part, the following definitions shall apply:

(a) “Base of operations” means the place of more or less permanent nature from which the service provider starts work and to which the service provider customarily returns in order to receive instructions from the business enterprise or communications from customers or other persons or to replenish stock or other materials, repair equipment, or perform any other functions necessary to the exercise of the service provider’s trade or profession;

(b) “Incidental to” means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction;

(c) “Material distortions” means the interest apportionment factor computed using monthly averages is 25% greater or lesser than the factor computed using the beginning and ending average;

(d) “Order” means a determination signed by the commissioner requiring use of the modified apportionment formula in instances when:

(1) The current apportionment formula does not accurately reflect the business enterprise’s business activity; or

(2) It is a result of an adjudicative proceeding;

(e) “Place from which the service is directed or controlled” means the place from which the business enterprise exercises its power to direct or control the service provider’s entire service, rather than the place from which a particular project is directed or controlled; and

(f) “Service provider” means an employee, officer, director, proprietor, partner, or member of a business enterprise who provides services to that entity.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.02 Availability or Requirement of Apportionment for a Business Enterprise.

(a) A New Hampshire business enterprise shall apportion its enterprise value tax base outside of New Hampshire if:

(1) Its business activities are conducted both within and without New Hampshire; and

(2) The business enterprise's activities were sufficient in another state for that state to impose a:

a. Net income tax;

b. Franchise tax based upon net income;

c. Capital stock tax;

d. Business privilege tax; or

e. Tax of the type imposed by RSA 77-E.

(b) A business enterprise shall complete and file Form BET-80, “Business Enterprise Tax Apportionment,” with the applicable Form BET described in Rev 2407.03, to apportion its New Hampshire business activity in accordance with RSA 77-E:4.

(c) A business enterprise, which is a member of a combined group required to apportion its New Hampshire business activity, in accordance with RSA 77-E:4, shall complete and file Form BET-80-WE, “Business Enterprise Tax Apportionment for Individual Nexus Members of a Combined Group.”

(d) A business enterprise not domiciled in New Hampshire shall apportion a portion of its enterprise value tax base to New Hampshire if its business activities within New Hampshire are sufficient to meet the due process requirements of the New Hampshire Constitution in Part I, Article 12 and Part II, Articles 5 and 6.

(e) A business enterprise shall not apportion a portion of its income to another state when:

(1) Its activities within the other state were not sufficient for that state to impose the taxes referred in (a)(2) above;

(2) It pays a minimal fee for qualifying to do business within that state; or

(3) It files and pays a tax, referred to in (a)(2) above, which was not legally required.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2404.02); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.03 Apportionment for Grantor Trust Activity. A grantor of a grantor trust shall include the apportionment factor information of the grantor trust within its own compensation, interest, and dividend factors.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2404.02); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.04 Compensation Apportionment Factor.

(a) The compensation apportionment factor shall include:

(1) The total amount of compensation, as described in Rev 2402.01, paid or accrued to all of the following in a business enterprise:

a. Employees;

b. Officers;

c. Directors;

d. Partners; or

e. LLC members;

(2) The net earnings from self-employment, less that portion of earnings retained for use in the business enterprise by the owner and the amount included in (a)(3) below; and

(3) The amount deducted as compensation for the personal services of a proprietor, partner, or member under RSA 77-A:4, III, for purposes of the business profits tax.

(b) The total amount of compensation paid to service providers shall be determined based on:

(1) The business enterprise's method of accounting; or

(2) The wages reported on the employer's state unemployment wage reports.

(d) If the method in (b), above, is changed, adjustments shall be made to prevent the inclusion of the identical wages in the compensation apportionment factor for more than one taxable period.

(e) Payment made to, or on behalf of, independent contractors shall not be included in a business enterprise's compensation apportionment factor.

(f) Service providers performing services for an affiliated enterprise shall be included in the compensation apportionment factor of the entity which:

(1) Issues the individual's federal Form W-2; or

(2) Deducts the individual's compensation for federal income tax purposes provided that:

a. The compensation amount is not included within a management fee charged to the affiliate;

b. The business enterprise issuing the individual's federal Form W-2 only charges the affiliate for the actual payroll expenditures; and

c. All affiliates maintain detailed records to substantiate the amount of compensation paid or accrued for each employee and how such compensation was recorded and deducted by the various affiliates.

(g) The compensation for services of an employee, officer, or director, or personal services of a proprietor, partner, or member shall be included in New Hampshire’s numerator when:

(1) The services are performed entirely within this state;

(2) The services are performed both within and without this state and the services performed without this state are incidental to the services within this state; or

(3) Some of the services are performed in this state, and:

a. The base of operations or, if there is no base of operations, the place from which the services are directed or controlled is in this state; or

b. The base of operations or the place from which the services are directed or controlled is not in any state in which some part of the services are performed, but the individual performing such services resides within this state.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2404.03); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.05 Interest Apportionment Factor.

(a) The interest apportionment factor shall include:

(1) All real property and tangible personal property, as defined in Rev 2401.14;

(2) Property that is:

a. Actually used, is available for, or capable of being used, during the taxable period in the regular course of the trade or business of the business enterprise;

b. Used in the regular course of business until its permanent withdrawal from use; or

c. In transit with the property being included in the numerator of the destination state; and

(3) The value of moveable or mobile property, such as construction equipment and common carrier vehicles, with the value being determined for purposes of the property factor on the total time or miles within a state during the period.

(b) Property, other than inventory, owned by the business enterprise shall be valued at its original cost which is deemed to be the basis of the property for federal income tax purposes at the time of acquisition prior to any federal adjustments and adjusted by subsequent sale, exchange, abandonment, or other such disposition.

(c) Inventory shall be included in the interest apportionment factor in accordance with the valuation method used for federal income tax purposes.

(d) Real and tangible personal property rented or leased by the business enterprise shall not be included in the interest apportionment factor.

(e) The beginning and ending average value of owned property shall be used for the interest apportionment factor unless material distortions of the factor are caused by:

(1) Fluctuations in values existing during the period; or

(2) The acquisition or disposition of significant property during the period.

(f) Business enterprises having material distortions caused by the use of a beginning and ending average value shall calculate the value of their property for apportionment purposes using a monthly average.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2404.04); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.06 Dividends Apportionment Factor. For taxable periods ending before December 31, 2021:

(a) Revenue producing activity shall include any:

(1) Transaction, procedure, or operation directly engaged in by a business enterprise resulting in a separately identifiable item of income; or

(2) Activity creating an obligation of a particular customer to pay specific consideration to the business enterprise.

(b) The denominator of the sales portion of the dividends apportionment factor shall include the following:

(1) Sales less returns and allowances;

(2) Dividends which are not eligible for the dividend deduction under RSA 77-E:3, II and III;

(3) Other interest;

(4) Rental income;

(5) Royalties;

(6) Capital gain income;

(7) Net gains or losses; and

(8) Other income, unless the other income is properly includible as a reduction of an expense or allowance.

(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 enterprise 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 enterprises 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) Sales price shall include:

(1) All interest;

(2) Carrying charge or time-price differential charges; and

(3) Excise taxes passed on to the buyer or included as part of the selling price of the product.

(e) The rental, lease, licensing, or other use of tangible or intangible personal property in New Hampshire shall be considered a separate and distinct revenue producing activity within New Hampshire.

(f) When a revenue 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) The time the property was used in New Hampshire as compared to the total time of use of the property everywhere during that taxable period when the amount of time is the most appropriate measure under the specific facts and circumstances of the business enterprise’s activities; or

(2) The distance traveled or covered in New Hampshire as compared to the total distance traveled or covered everywhere during the taxable period when distance is the most appropriate measure under the specific facts and circumstances of the business enterprise’s activities.

(g) Personal services performed in New Hampshire shall be a separate revenue producing activity performed in New Hampshire unless the business enterprise can demonstrate the activity performed in New Hampshire is completely dependent upon activities performed by the business enterprise in one or more other states.

(h) Personal services shall be attributed to New Hampshire if:

(1) The activity is completely performed in New Hampshire; or

(2) The activity performed in New Hampshire is a dependent component of a service performed both within and without New Hampshire and a greater proportion of the costs directly associated with performing such service are incurred in New Hampshire.

(i) In determining the costs directly associated with the performance of the service in (h), above, the business enterprise shall allocate all compensation costs, including benefits, of personnel performing the service based on the amount of time spent performing the service in New Hampshire as compared to the time spent in performing the service outside New Hampshire.

(j) Expenses incurred in obtaining or retaining customers or clients, including contract negotiations, shall not be costs directly associated with the performance of the service.

Source. #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2404.05); ss by #11032, eff 1-29-16; ss by #13177, eff 3-6-21; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.061 Dividends Apportionment Factor. For taxable periods ending on or after December 31, 2021:

(a) The denominator of the sales portion of the dividends apportionment factor shall include the following:

(1) Sales less returns and allowances;

(2) Dividends which are not eligible for the dividend deduction under RSA 77-E:3, II and III;

(3) Other interest;

(4) Rental income;

(5) Royalties;

(6) Capital gain 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 numerator of the sales portion for each business enterprise shall include:

(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 enterprise 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, license, or other use of real property, if and to the extent the property is located in this state;

(7) Rental, lease, license, or other use of tangible personal property, if and to the extent the property is located in this state;

(8) Sales of a service, if and to the extent the service is delivered to a location in this state;

(9) Sales, 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 enterprise’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-E:1, III, 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; and

(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.

Source. #13177, eff 3-6-21; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2404.07 Modification of Apportionment Provisions.

(a) A business enterprise seeking to modify the statutory apportionment formulas provided in RSA 77-E:4 shall, prior to using a modified formula, petition the commissioner in writing.

(b) The petition for modification of the apportionment formula shall be:

(1) Submitted separately and not attached to a tax return being filed; and

(2) Mailed to:

Commissioner

New Hampshire Department of Revenue Administration

Legal Bureau

PO Box 457

Concord, NH 03302-0457.

(1) The business enterprise’s:

a. Full name and address;

b. Taxpayer identification number as defined in Rev 2902.11; and

c. Taxpayer representative’s power of attorney, if applicable;

(2) A full and precise statement of the business activity and the necessity for the modification;

(3) Evidence supporting the business enterprise's petition including:

a. Any court decisions and New Hampshire administrative rules on the matter; and

b. True copies of all contracts, deeds, agreements, instruments, or other documents which evidence the necessity of the modification of the apportionment formula;

(4) Reference to the statutory provisions relating to the subject of the written petition;

(5) A description of the modified formula proposed by the business enterprise; and

(6) A statement whether, to the best of the petitioner's knowledge, the modification is the subject of prior petition requests of a similar or identical factual nature.

(d) The use of a separate accounting result, which differs from the standard apportionment result, shall not be deemed to demonstrate conclusively the need for, or the acceptability of, a modified apportionment formula.

(e) The information in the petition shall be reviewed by the commissioner’s designee to determine whether the requested modification of the apportionment formula measures the activity being conducted in New Hampshire more accurately than the statutory apportionment formulas.

(f) The petitioner shall receive the determination signed by the commissioner or the commissioner’s designee.

(g) If the petitioner is aggrieved by the determination, the petitioner may appeal the determination within 60 days after the date of the determination letter by requesting a hearing on the petition in the same manner as an adjudicative proceeding, involving the administration, assessment, or refund of taxes, governed by Rev 200.

(h) The use of a modified apportionment formula by a business enterprise without the prior written approval of the commissioner or the commissioner’s designee shall:

(1) Constitute a willful violation of RSA 77-E:4; and

(2) Not be considered filed for purposes of RSA 77-E:5, RSA 77-E:1, XII, and Rev 2407 until approval has been obtained from the commissioner’s designee, or ordered by the commissioner.

(i) A copy of the commissioner’s order or the approval letter shall be attached to all subsequently filed returns.

(j) Once a modified apportionment formula has been approved by the commissioner or the commissioner’s designee, or ordered by the commissioner, it shall remain in effect in its entirety until:

(1) Another modification of apportionment formula petition has been approved; or

(2) Another modification of apportionment formula has been ordered by the department’s commissioner.

(k) The business enterprise may petition in writing for, or the commissioner may order, another modification of the apportionment formula when further adjustments are necessary.

Source. #9065, eff 1-10-08 (from Rev 2404.06); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2405 COMPUTATION OF TAX, PAYMENTS, REFUNDS AND CARRYOVER OF CREDIT

Rev 2405.01 Payments of Liabilities.

(a) Where a business enterprise has a payment due with any document, such payment shall be submitted:

(1) With the document when the business enterprise is not:

a. Statutorily required to participate in the electronic funds transfer program; or

b. Voluntarily participating in the department’s electronic funds transfer program in accordance with Rev 2500; or

(2) Separately from the document by means of an electronic funds transfer program as provided in RSA 21-J:3, XXI and Rev 2500 in instances where the business enterprise is:

a. Statutorily required to participate in the program; or

b. Voluntarily participating in the program in accordance with Rev 2500.

(b) A business enterprise with a tax liability under one dollar shall not be required to remit the payment. The tax return, however, shall be filed.

(c) The payment of the business enterprise tax shall be made on, or before, the prescribed payment date as defined in RSA 77-E:1, XIII.

(d) An extension of time to file the tax return shall not extend the time for the payment of the tax.

(e) The department shall apply any overpayment of the business profits tax estimated payments against the business enterprise tax liability.

(f) Checks or money orders submitted as payments shall be payable to the state of New Hampshire.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2405.02 Estimated Taxes.

(a) A business enterprise having an annual projected tax liability in excess of $260 shall:

(1) Complete and file the applicable estimated tax form:

a. Form NH-1040-ES, “Estimated Proprietorship Business Tax”;

b. Form NH-1041-ES “Estimated Fiduciary Business Tax”;

c. Form NH-1065-ES, “Estimated Partnership Business Tax”; or

d. Form NH-1120-ES, “Estimated Corporation Business Tax”; and

(2) Make 4 payments of 25% on such annually projected tax liability on or before the fifteenth day of the fourth, sixth, ninth, and the twelfth months of the tax year.

(b) When an annually projected tax liability in excess of $260 is determined in a quarter subsequent to the first quarter, the initial estimated tax payment shall equal the cumulative amount payable as of that quarter as if the liability had been determined in the first quarter.

(1) Determined for the combined group as a whole; and

(2) Paid by the principal New Hampshire business enterprise in accordance with the provisions of (a) and (b) above.

Source. #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #10332, eff 5-9-13; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2405.03 Application of an Overpayment.

(a) An overpayment of tax, verified by the department, shall be treated in the following sequence:

(1) Applied to offset any other tax liability of the business enterprise or the water’s edge combined group, in accordance with RSA 21-J:28-a, IV;

(2) Refunded to the taxpayer if requested;

(3) Credited to subsequent tax liability in accordance with RSA 77-E:6, II; or

(4) A combination of (2) and (3), above, if indicated on Form BT-Summary, “Business Tax Summary” by the business enterprise or the water’s edge combined group.

(b) A business enterprise, which is not required to file a tax return, but incorrectly files and makes a payment of estimated taxes, shall request a refund by:

(1) Completing and filing Form BT-SUMMARY with the department to request a refund pursuant to RSA 21-J:29, I(b); or

(2) Submitting a written request:

a. To the department at:

New Hampshire Department of Revenue Administration

Taxpayer Services Division

PO Box 637

109 Pleasant Street

Concord, NH 03302-3306; and

b. Which includes the following:

1. Name and mailing address;

2. Taxpayer identification number;

3. The type of entity for the business organization;

4. The reason the estimated tax payment was not required to be made;

5. The tax year for which the estimated tax payment was made;

6. The amount of the estimated tax payment; and

7. Preparer’s dated signature.

Source. #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #13126-B, eff 10-24-20; ss by #13450, eff 9-23-22; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2405.04 Carryover of Unused Credits Resulting From Mergers or Changes in Form of Business.

(a) The surviving entity involved in a merger may utilize unused business enterprise tax credits of the merged companies.

(b) The surviving entity involved in a merger shall determine the expiration date of unused credits based on the original carryover periods of the credits obtained in the merger.

(c) A business enterprise which changes its form of conducting business, such as the incorporation of a proprietorship, shall:

(1) Not lose the unused business enterprise tax credits available to it at the time of change; and

(2) Determine the expiration date of all unused credits based on the original carryover periods of the credits.

Source. #7178, eff 12-23-99 (from Rev 2405.02), EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2406 CREDITS ALLOWED AGAINST TAX LIABILITY

Rev 2406.01 Credits Allowed Against the Business Profits Tax. Except as referenced in Rev 2405.04 or as provided in RSA 77-E:13, the business enterprise tax credit against the business profits tax shall only be taken by a business organization having the same federal employer identification number or social security number as the business enterprise liable for the business enterprise tax.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2406.02 Credits Allowed Against the Business Enterprise Tax. In addition to other statutory credits which might be available, the following credits may be allowed against the business enterprise tax pursuant to statute and rule:

(a) A community development finance authority investment tax credit, pursuant to RSA 162-L:10 and Rev 2406.03;

(b) An economic revitalization zone credit, pursuant to RSA 162-N:6-7 and Rev 2406.04;

(d) The education tax credit, pursuant to RSA 77-G and Rev 2406.06.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; rpld by #7178, eff 12-23-99

New. #9065, eff 1-10-08 (from Rev 2406.01); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2406.03 Community Development Finance Authority Investment Tax Credit.

(a) A business organization qualified for the credit under RSA 162-L:10 shall be allowed a credit for the amount available based on its contributions against either its:

(1) Business profits tax liability; or

(2) Business enterprise tax liability.

(b) Any amount of the investment tax credit applied first against the business profits tax shall not be used as a credit against the business enterprise tax.

(1) Be considered business enterprise tax paid; and

(2) Not be available as a credit against the business profits tax, except to the extent it is a credit against the business enterprise tax.

(d) In addition to the filing requirements under Rev 2407.02, a copy of the following documents shall be attached to the business enterprise tax return:

(1) The authorization letter from New Hampshire community development finance authority awarding a credit; and

(2) Form DP-160, “Schedule of Credits”.

Source. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2406.04 Economic Revitalization Zone Tax Credits.

(a) Economic revitalization zone tax credits, pursuant to RSA 162-N:7, may be allowed as a credit against either:

(1) The business profits tax liability; or

(2) The business enterprise tax liability.

(b) Economic revitalization zone tax credits applied first against the business profits tax shall not be available as a credit against the business enterprise tax.

(1) Be considered business enterprise tax paid; and

(2) Not be available as a credit against the business profits tax, except to the extent it is a credit against the business enterprise tax.

(d) In addition to the filing requirements under Rev 2407.02, a copy of the following documents shall be attached to the business enterprise tax return:

(1) The authorization letter from the New Hampshire department of resources and economic development awarding the credit; and

(2) Form DP-160 “Schedule of Credits”.

Source. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2406.05 Research and Development Tax Credit.

(a) A business enterprise shall complete and file Form DP-165 “Research & Development Tax Credit Application” by June 30, following the taxable period, to apply for the research and development tax credit pursuant to RSA 77-A:5, XIII(a).

(b) Any unused research and development tax credit not applied against the business profits tax liability may be used to offset the taxpayer’s business enterprise tax liability as provided in RSA 77-E:3-b.

(c) Any wages included in the calculation of the research and development tax credit shall be included in the compensation element of the enterprise value tax base pursuant to RSA 77-A:5, XIII(b)(1)(

D) and Rev 2402.01(a)(8).

(d) Taxpayers making quarterly estimated tax payments resulting in overpayments after applying the credits may request a refund for the overpayments on its Form BT-Summary.

Source. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2406.06 Education Tax Credit.

(a) A business enterprise granted an education tax credit under RSA 77-G may use the amount approved against its business enterprise tax liability for the taxable period during which the corresponding donation was made and up to 5 succeeding taxable periods as provided in (c) below, after receiving a Form ED-03, “Education Tax Credit Scholarship Receipt” pursuant to RSA 77-G:1, XX, from the approved scholarship organization, as defined in RSA 77-G:1, XVII, who received the donation.

(b) No portion of the education tax credit used against the business enterprise tax shall be considered taxes paid pursuant to RSA 77-E for purposes of the credit against the business profits tax under RSA 77-A:5, X.

(c) Any portion of the education tax credit which is not used to offset the business enterprise’s liability under the business enterprise tax, the business profits tax, or the interest and dividends tax, for the taxable period during which the corresponding donation was made, may be carried forward and allowed against the business enterprise tax, the business profits tax, or both, for no more than 5 succeeding taxable periods, but shall not exceed $1,000,000 in any given taxable period. No portion of the education tax credit shall be carried forward against the interest and dividends tax.

(d) Every business enterprise using an education tax credit pursuant to RSA 77-G against its liability under the business enterprise tax or the business profits tax shall attach a copy of each applicable Form ED-03 “Education Tax Credit Scholarship Receipt” to its business tax return, in accordance with RSA 77-G:1, XX.

Source. #10232, eff 11-21-12; ss by #11032, eff 1-29-16; ss by #12883, eff 9-27-19; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2407 RETURNS, EXTENSIONS, AND DECLARATIONS

Rev 2407.01 Timeliness. Returns, extensions, and declarations shall be timely filed in accordance with Rev 2904.03.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2407.02 Filing.

(a) A business enterprise required to file a business profits tax return shall complete and file its business enterprise tax return with its business profits tax return and Form BT-Summary.

(b) A business enterprise shall attach a clear and legible copy of its federal income tax return and all schedules attached or required to be attached thereto with the business enterprise tax return.

(c) A business enterprise, other than a single member entity, electing, under the U.S. Department of the Treasury's Treasury Decision 8697, to be taxed as a corporation or partnership for federal income tax purposes, shall:

(1) Comply with all federal income tax regulations relating to such election;

(2) Complete and file its New Hampshire business enterprise tax returns based on the entity type selected for federal income tax purposes; and

(3) Attach:

a. A copy of federal Form 8832, if required to be filed with the Internal Revenue Service; or

b. A statement that the business enterprise has accepted the federal default treatment of being taxed as a partnership.

(d) An entity electing, for federal income tax purposes the provisions under the U.S. Department of the Treasury's Treasury Decision 8697, shall:

(1) Not include the income or expenses of the entity within the member's business enterprise tax return as provided under RSA 77-E:1, III; and

(2) Complete and file Form BET.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2407.01); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2407.03 Tax Returns.

(a) A business enterprise as defined in RSA 77-E:1, III and Rev 2401.02 shall complete and file Form BET and Form BT-SUMMARY and indicate the beginning and end dates for the taxable period.

(b) The BET and BT-SUMMARY forms shall be completed and filed by the 15th day, following the close of the business enterprise's taxable period, of:

(1) The third month for partnerships;

(2) The fourth month for combined groups and all other entities except non-profit organizations; and

(3) The fifth month for non-profit organizations.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2407.02); ss by #11032, eff 1-29-16; ss by #13126-B, eff 10-24-20; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2407.04 Amended Returns.

(a) A business enterprise amending its business enterprise tax return for reasons other than an Internal Revenue Service audit change shall complete and file Form BET and Form BT-Summary for the particular taxable period.

(b) Amended business enterprise tax returns not requesting a refund or credit shall be filed within 3 years of the prescribed filing date for the original return as provided by RSA 21-J:29.

(c) Amended business enterprise tax returns requesting a refund or credit shall be filed within 3 years of the prescribed payment date for the tax or within 2 years from the date the tax was actually paid, whichever is later.

(d) The 2-year period from the date the tax was actually paid shall not be applicable to an amended return requesting a refund or credit where the payment of tax, interest, or penalty paid was a result of an assessment or a demand for payment as provided by RSA 21-J:29.

(e) Business enterprises shall attach a copy of the applicable federal income tax return to the amended business enterprise tax return.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-9, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2407.03); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2407.05 Short Period Returns.

(a) A business enterprise whose taxable period is less than 12 months shall complete and file Form BET and Form BT-Summary and indicate the beginning and end dates for the taxable period.

(b) Short period returns shall be completed and filed by the 15th day following the close of the business enterprise's taxable period of:

(1) The third month for partnerships;

(2) The fourth month for combined groups and all other entities except non-profit organizations; and

(3) The fifth month for non-profit organizations.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2407.04); ss by #11032, eff 1-29-16; ss by #12187, eff 5-25-17; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2407.06 Corrections Resulting From Internal Revenue Service Audit Changes.

(a) Business enterprises shall report all federal audit changes, as provided in RSA 77-E:9, with the department when such changes finally have been determined by:

(1) Filing the applicable entity type Form DP-87, “Report of Change for IRS Adjustment Only” for taxable periods ending on or before December 31, 2020; or

(2) Filing an amended business tax return indicating on the BT-Summary Form that it's for an IRS adjustment for tax periods ending after December 31, 2020; and

(3) Attaching a clear and legible copy of:

a. The federal revenue agent's report;

b. Closing agreement; and

c. Court decision, where applicable.

(b) For purposes of this section, federal audit changes shall have been finally determined when:

(1) The business enterprise has made payment to the IRS on any additional income tax liability resulting from the federal audit and has not filed a federal petition for redetermination or claim for refund for the portions of the federal audit on which payment was made;

(2) The business enterprise received a refund from the U.S. Department of the Treasury resulting from the federal audit;

(3) The business enterprise signed federal Form 870 or other Internal Revenue Service form consenting to the deficiency or accepting any over-assessment;

(4) The business enterprise’s time period for filing its federal petition for redetermination to the United States Tax Court expired;

(5) The business enterprise entered into a closing agreement with the Internal Revenue Service as provided in section 7121 of the Internal Revenue Code as amended; or

(6) The business enterprise has received a decision from the U.S. Tax Court, U.S. District Court, U.S. Court of Appeals, U.S. Court of Claims, or the U.S. Supreme Court which is final and non-appealable.

(c) Notwithstanding paragraph (b), any federal audit that results in a refund that is referred to the Joint Committee on Taxation of the U.S. Congress shall be deemed finally determined when the business enterprise has received such refund from the U.S. Department of Treasury.

(d) A separate applicable business entity type Form DP-87, “Report of Change for IRS Adjustment Only,” or applicable New Hampshire business tax return, as described in (a)(1) and (a)(2) above, shall be completed and filed for each:

(1) Business enterprise; and

(2) Taxable period affected by the federal audit.

(e) Payment of any additional tax liability shall accompany the applicable business entity type Form DP-87 or applicable New Hampshire business tax return.

(f) The statute of limitations shall be opened only for a federal audit change on a tax return for the items of compensation, interest, or dividends, pursuant to RSA 77-E:9, that are directly affected by the specific changes within the federal revenue agent’s report, closing agreement, or court decision.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2407.05); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2407.07 Extension of Time to File Returns.

(a) Pursuant to RSA 77-E:8, the commissioner may extend the time within which a business enterprise is required to file a return and, if the return is filed within the extended period, no penalty may be imposed for the failure to file the return at the time required by the statute. A business enterprise which has paid 100% of the business enterprise tax determined to be due by the prescribed due date shall be allowed an automatic 7-month extension of time to file a return without filing an extension application.

(b) A business enterprise which has not paid the business enterprise tax determined to be due through estimated payments shall pay the additional amount due on or before the prescribed payment date.

(d) An extension of time for filing a business enterprise tax return shall not extend the time for the payment of the tax.

(e) Payments not made by the prescribed payment date shall be subject to the interest and penalty provisions of RSA 21-J.

(f) Form BT-EXT, “Payment Form and Application for 7 Month Extension of Time to File Business Tax Return,” shall, prior to the due dates:

(1) Be completed and filed with:

New Hampshire Department of Revenue Administration

PO Box 1265

Concord, NH 03302-1265 ; and

(2) Remit payment of any additional tax liability.

Source. #9065, eff 1-10-08 (from Rev 2407.06); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2408 ADMINISTRATION

Rev 2408.01 Taxpayer Records and Information.

(a) Every business enterprise shall maintain all information:

(1) Necessary to establish the amount of compensation paid or accrued, net earnings from self-employment, interest paid or accrued, dividends paid; and

(2) Required to be shown on any return, schedule, or attachment required under RSA 77-E and any administrative rules adopted to implement the business enterprise tax.

(b) The information required by (a) above shall include, but not be limited to, the following:

(1) General ledger;

(2) Cash receipts records;

(3) Cash disbursements records;

(4) Sales records;

(5) Payroll records;

(6) Bank statements with all enclosures;

(7) Paid and unpaid invoices from vendors;

(8) Correspondence, contracts, or other agreements;

(9) Federal tax returns and all schedules attached or required to be attached thereto;

(10) State and local tax returns and all schedules attached or required to be attached thereto for all jurisdictions in which the business enterprise has activities; and

(11) Agreements between the enterprise and its owners or shareholders.

(c) The information may be maintained in either a formal or informal nature such as in a worksheet format provided that such worksheets shall be the basis for the preparation of any financial statements and federal or state tax returns.

(d) The information shall be retained for a minimum period of 5 years from the date the returns were filed or until the completion of all:

(1) Audits commenced by the department;

(2) Administrative appeals pending before the department; and

(3) Judicial proceedings pending between the business enterprise and the department.

(e) Business enterprises shall provide the commissioner or authorized representatives access to:

(1) All information, listed in (b) above, necessary to establish the amount of compensation paid or accrued, net earnings from self-employment, guaranteed payments, interest paid or accrued, dividends paid, or any other information required to be shown on any return, schedule, or attachment required under RSA 77-E and any administrative rules adopted to implement the business enterprise tax;

(2) Key company personnel, officers, or employees, for interviews, where applicable, upon advance notice and at times during the regular business day relative to substantial knowledge of and access to documentation on:

a. Compensation policies;

b. Financing policies;

c. Profit centers or other methods of allocating income and expense among related parties;

d. Methods of factor determination; or

e. Other data needed to establish a business enterprise's proper tax liability;

(3) Minutes of meetings for the business enterprise’s:

a. Board of directors;

b. Audit committee;

c. Compensation committee;

d. Finance committee; and

e. Other similar committees or subcommittees of the board;

(4) Consolidated or separate federal income tax returns and related schedules and exhibits as filed with the United States Internal Revenue Service including federal Form 5471 or other similar document for each taxable period under audit;

(5) Annual financial statement and supporting schedules, including consolidating work papers for each taxable period under audit;

(6) Reconciliation between net income from financial statements and net income per books on Schedule M of the federal income tax return as filed with the United States Internal Revenue Service for each taxable period under audit;

(7) Schedules of sales, payroll, and property by state and supporting documentation that can be tied to the respective denominators for each taxable period under audit; and

(8) Unemployment and withholding returns, as applicable, for each taxable period under audit, filed with:

a. The United States Internal Revenue Service for each taxable period under audit; and

b. The New Hampshire department of employment security.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2408.02 Confidentiality of Department Records.

(a) All business enterprise tax returns and information shall be confidential pursuant to RSA 21-J:14.

(b) The department shall make a disclosure or allow a representative to act on behalf of the business enterprise pursuant to Rev 2903.02(b).

(c) Taxpayers shall provide their taxpayer identification number or numbers on all tax returns and related documents pursuant to Rev 2903.02(c).

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2408.03 Informal Conference Prior to Assessment.

(a) The purpose of conducting an informal conference prior to assessment shall be to discuss the audit findings with taxpayers and the department’s audit division in an effort to reach an agreement on the issues of facts, audit results, or both.

(b) At the conclusion of an audit when the facts and circumstances of the audit review indicate to the department or business enterprise that conducting an informal conference prior to assessment would benefit both the state and the business enterprise, either party may request and the department’s audit division shall provide an informal conference with the business enterprise, or its authorized representative.

(1) The date, time, and location for the informal conference; and

(2) The advance information that the business enterprise or its authorized representative shall be required to provide the department’s audit division.

(d) The information specified in (c)(2), above, shall include:

(1) The name, address, and taxpayer identification number of the business enterprise;

(2) An outline of the areas of agreement and disagreement;

(3) Documentation in support of the business enterprise’s position such as, but not limited to:

a. Citations of supporting case law;

b. Statutory or regulatory provisions; and

c. Documents or correspondence from unrelated parties;

(4) Responses to outstanding questions raised by the department’s auditor during the audit; and

(5) The names of the individuals who shall participate in the informal conference on behalf of the business enterprise.

(e) Upon completing a review of material provided during the informal conference, the department’s audit division shall determine the appropriate disposition of the audit or department review, notification of which shall begin the period for formal appeal to the commissioner under RSA 21-J:28-b and Rev 200.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2409 CERTIFICATIONS

Rev 2409.01 Business Enterprise Requests For Certifications of Dissolution, Withdrawal, or Good Standing. The issuance of certification statements for good standing, dissolution, or withdrawal shall be subject to the following requirements:

(a) Taxpayers shall:

(1) Complete and file Form AU–22, “Certification Request Form,” and mail the form and any required submissions to:

New Hampshire Department of Revenue Administration

Taxpayer Services Division

PO Box 3306

Concord, NH 03302-3306; or

(2) File the request and pay the fee online using the Granite Tax Connect web portal;

(b) Certification statements shall be mailed to the business enterprise unless the request authorizes the department to send the certification statements to someone other than the business enterprise;

(c) The non-refundable fees under RSA 77-E:12 for the certification statements referred to in this section shall not be used to offset any outstanding tax liability;

(d) The non-refundable fee paid for the certification statements referred to in this section shall be considered fully expended when:

(1) The requested certification statements are issued to the business enterprise; or

(2) The business enterprise or its authorized representative is notified that the department is unable to issue the required certification statement and the reason why it cannot do so;

(e) All checks for the fees shall be made payable to the state of New Hampshire;

(f) If a request for the certification statement signed by someone other than a corporate officer, general partner, managing member, or the proprietor, the request shall be accompanied by a power of attorney authorizing someone to act as an agent for a taxpayer as prescribed in Rev 2903.03;

(g) The petitioner shall receive the requested certification if the department’s commissioner determines that no returns, tax, additions to tax, interest, or penalties for taxes administered by the department are due and unpaid; and

(h) Certification statements shall be issued within 30 days of the request for a certificate of good standing and within 60 days of a request for certificate of dissolution or certificate of withdrawal, or the later of receiving:

(1) The requests and all documents required by Rev 2409; and

(2) In the case of a request for a certificate of good standing, all of the required returns and documents have been received from the business enterprise that are necessary to bring the business into good standing.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2409.02 Certification Statement of Good Standing.

(a) A business enterprise seeking the issuance of a certification statement of good standing from the department shall submit to the department, either in hard copy or electronically, through the Granite Tax Connect web portal:

(1) A completed Form AU-22, signed by a corporate officer, general partner, managing member, proprietor, or a duly authorized representative;

(2) Payment of the fee established by RSA 77-E:12, III; and

(3) All of the required returns and documents that are necessary to bring the business

enterprise into good standing.

(b) The certification statement of good standing shall be issued within 30 days of the later of receiving:

(1) The request; or

(2) All the required returns and documents from the business enterprise that are necessary to bring the business organization into good standing.

Source. #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2409.03 Certification of Dissolution. Business enterprises which are dissolving and seeking a certification statement of dissolution shall submit to the department, either in hard copy or electronically, through the Granite Tax Connect web portal:

(a) A completed Form AU-22, signed by a corporate officer, general partner, managing member, proprietor, or a duly authorized representative;

(b) Payment of the fee established in RSA 77-E:12, I(b); and

(1) A final New Hampshire business enterprise tax return, including clear and legible copies of the final federal tax return which reflects the disposition of all corporate assets;

(2) A clear and legible copy of federal Form 966, corporate dissolution or liquidation, if applicable;

(3) Clear and legible copies of all federal Forms 4797 and 6252 filed pertaining to the sale of assets and any other schedule that is required to show the breakdown of the sale of assets;

(4) A copy of the corporate minutes adopting the liquidation, describing the disposition of the corporate assets, if applicable; and

(5) A copy of the plan of liquidation, if one exists.

Source. #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2409.04 Certification for Withdrawal.

(a) Business enterprises seeking a certification statement for withdrawal shall submit to the department, either in hard copy or electronically, through the Granite Tax Connect web portal:

(1) A completed Form AU-22 signed by a corporate officer, general partner, managing member, proprietor, or their duly authorized representative; and

(2) Payment of the fee established in RSA 77-E:12, II.

(b) The business enterprise shall provide:

(1) An explanation for the withdrawal;

(2) A copy of federal form 966 if a plan of liquidation has been adopted; and

(3) A final New Hampshire business enterprise tax return which addresses the disposition of all New Hampshire assets.

(c) The department shall issue the requested withdrawal certification statement or a letter of denial with the reasons for the denial within 60 days of the later of receiving:

(1) The request; or

(2) All the required returns and documents from the business enterprise.

Source. #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2410 APPLICATION OF PENALTIES

Rev 2410.01 Substantial Understatement of Tax Penalty.

(a) The department shall assess the 25% penalty for understatement of tax provided by RSA 21-J:33-a on returns where the understatement exceeds the greater of 10% of the correct tax liability or $5,000 unless the business enterprise:

(1) Adequately disclosed the relevant facts regarding the tax treatment of the item generating the understatement; or

(2) Had substantial authority for its tax treatment of such item.

(b) A business enterprise shall have adequately disclosed the tax treatment of an item on the return or in a statement attached to the front of the return if:

(1) The statement contains:

a. A prominent caption identifying the statement as a disclosure of the tax treatment for the substantial underpayment penalty provided in RSA 21-J:33-a; and

b. Those facts affecting the tax treatment of the item will apprise the department of the potential controversy or a concise description of the legal issues presented by the facts in question;

(2) The item for which the disclosure is made is clearly identified; and

(3) The dollar amount of the item is disclosed.

(c) A business enterprise shall have substantial authority for the tax treatment of an item if the weight of the authorities supporting the treatment of the item is substantial in relation to the weight of the authorities supporting the position of the department.

(d) The department shall consider the following as being authoritative sources, which shall be considered based on the relevance to the matters at issue and precedential value of each source, of substantial authority for items specific to the application of the business enterprise tax:

(1) Any New Hampshire statutes having a bearing on the tax statutes;

(2) Department administrative rules;

(3) Declaratory rulings issued to the business enterprise;

(4) Department technical information releases;

(5) Superior court and board of tax and land appeals decisions;

(6) Federal District Court and First Circuit Court of Appeals decisions;

(7) United States and New Hampshire supreme court decisions;

(8) New Hampshire Legislative committee reports specifying legislative intent; and

(9) Written advice from the department issued to the business enterprise about the tax treatment of the item in question.

(e) The department shall consider the following as being authoritative sources, which shall be considered based on the relevance to the matters at issue and precedential value of each source, of substantial authority in arriving at the enterprise value tax base that are included in federal taxable income before any state required adjustments:

(1) Internal Revenue Code and other statutory provisions;

(2) Temporary and final United States Department of the Treasury regulations;

(3) Federal or state court cases;

(4) Internal Revenue Service or United States Department of the Treasury administrative pronouncements including revenue rulings and revenue procedures;

(5) Tax treaties and related regulations, as well as the United States Department of the Treasury's or other official explanation of such treaties;

(6) Congressional intent as reflected in Committee Reports, joint explanatory statements of managers included in the conference committee reports and floor statements made by the bill's managers prior to enactment;

(7) Controlling precedent of the United States Court of Appeals to which the business enterprise has a right of appeal;

(8) Technical advice memoranda, ruling or determination letter issued to the business enterprise or in which the business enterprise is named;

(9) An affirmative statement in a federal revenue agent's report with respect to the business enterprise’s prior taxable periods; and

(10) Any source accepted by the Internal Revenue Service as substantial authority.

(f) The following shall not be considered authoritative sources:

(1) Opinions by tax professionals;

(2) Tax publication opinions or narrative statements; and

(3) Articles contained in professional or tax periodicals.

(g) The existence of substantial authority for a particular item shall be determined as of the date the tax return containing the item was filed or as of the last day of the taxable period to which the tax return relates, whichever is later.

(h) The penalty shall be applied to the net understatement determined by reducing the understatement, as defined in RSA 21-J:33-a, III, by the portion of the understatement for which the business enterprise had substantial authority or had adequately disclosed the position taken on the return.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2410.02 Understatement of Taxpayer's Liability by Tax Preparer Penalty.

(a) For purposes of RSA 21-J:33-b, I, "substantial portion" means any instance where the efforts of the tax preparer have affected more than 25% of the business enterprise's tax liability.

(b) An individual or company providing more than typing, reproducing, or other mechanical assistance shall be deemed to be a tax preparer when the individual or company uses computer software to make determinations about the:

(1) Applicability of tax laws or characterization of income; and

(2) Allowability of deductions or credits.

(c) The penalty provided in RSA 21-J:33-b, III, shall be assessed when any part of an understatement of tax is the result of a tax preparer's willful neglect or intentional disregard of the statute or department administrative rule unless the business enterprise has adequately disclosed the tax treatment of an item on the tax return or in a statement attached to the front of the tax return as provided in Rev 2410.01(b).

(d) A tax preparer shall be deemed to have acted with willful neglect or intentional disregard when the tax preparer fails:

(1) To comply with a statutory provision interpreted in an opinion of the New Hampshire supreme court;

(2) To comply with a department administrative rule prescribing the appropriate tax treatment of an item contained in the business enterprise tax return; or

(3) To follow a statute, administrative rule, or court decision that addresses the proper treatment of an item or issue.

(e) The penalty provided in RSA 21-J:33-b, IV shall be assessed when any part of an understatement of tax is the result of a tax preparer's willful attempt to understate the business enterprise’s tax liability.

(f) A tax preparer shall be deemed to have made a willful attempt to understate a tax liability of a business enterprise by:

(1) Disregarding or misstating information furnished by the business enterprise, or other person in an attempt to reduce the tax liability; or

(2) Not inquiring of the business enterprise or other person when the tax preparer knows or should have known that the information provided was incorrect or incomplete.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2410.03 Aiding and Abetting an Understatement of Tax Liability Penalty.

(a) The penalty provided in RSA 21-J:33-c shall be assessed against any person who aids in, assists in, procures, or advises in the preparation of any tax return or document in connection with the business enterprise tax law or department administrative rule if the person knows that:

(1) The information provided will be used in the preparation of any material document; and

(2) If used, the information will result in an understatement of tax liability.

(b) The penalty shall not be assessed when the business enterprise adequately disclosed the relevant facts regarding the tax treatment of the item in the manner provided in Rev 2410.01(b).

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

PART Rev 2411 BUSINESS ENTERPRISE TAX FORMS

Rev 2411.01 Availability of Forms.

(a) Forms may be obtained:

(1) Online at www.revenue.nh.gov;

(2) By calling the forms line at 603-230-5001;

(3) By requesting them through the Granite Tax Connect web portal at gtc.revenue.nh.gov/TAP/ /; or

(4) By requesting them, in writing, from:

New Hampshire Department of Revenue Administration

Tax Forms

P.O. Box 637

Concord, NH 03302-0637.

(b) Business enterprise tax forms listed on www.revenue.nh.gov may be filled in online, printed, signed, and submitted to the department.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2411.02); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.02 Form BT-EXT, Payment Form and Application for 7-Month Extension of Time to File Business Tax Return.

(a) Business enterprises that have not paid 100% of their tax liability and need an extension of time to file their business enterprise tax return shall:

(1) Remit payment of any additional tax liability; and

(2) Complete and file Form BT-EXT, by mail, electronically pursuant to Rev 2900, or via the Granite Tax Connect web portal.

(b) Business enterprises that have paid 100% of their tax liability and need an extension of time to file their business enterprise tax return, shall be granted a 7-month extension of time to file the tax return without filing Form BT-EXT.

(c) A granted extension of time to file its business tax return shall extend the due date of the tax return, not the due date of any payment.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2411.05); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.03 Form BT-SUMMARY, Business Tax Return Summary.

(a) Form BT-SUMMARY, “Business Tax Return Summary,” shall be completed and filed by business enterprises to report all business enterprise tax liabilities, interest, penalties, and payments to the department.

(b) Business enterprises shall attach:

(1) The required business enterprise tax return and business profits tax return to Form BT-SUMMARY; and

(2) Copies of the federal forms and schedules used to support the information being reported as provided for in Rev 2408.

(c) Individual spouses who are proprietors shall complete and file a separate Form BT-SUMMARY for each proprietorship with all applicable business enterprise tax returns.

Source. INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; amd by #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev 2411.02), EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2411.06); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.04 Form BET, Business Enterprise Tax Return.

(a) Form BET, “Business Enterprise Tax Return” shall be completed and filed by business enterprises to report their business enterprise tax liability in compliance with RSA 77-E:5.

(b) Business enterprises preparing Form BET shall attach the form to Form BT-SUMMARY.

Source. #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev 2411.03), EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2411.07); ss by #11032, eff 1-29-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.05 Form BET-80, Business Enterprise Tax Apportionment.

(a) Form BET-80, “Business Enterprise Tax Apportionment,” shall be completed and filed by business enterprises required to apportion their New Hampshire business activity in accordance with RSA 77-E:4.

(b) Business enterprises preparing Form BET-80 shall attach the form to Form BET.

Source. #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev 2411.05), EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2411.09); ss by #11032, eff 1-29-16 (formerly Rev 2411.06); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.06 Form BET-80-WE, Business Enterprise Tax Apportionment for Individual Nexus Members of a Combined Group.

(a) Form BET-80-WE, “Business Enterprise Tax Apportionment for Individual Nexus Members of a Combined Group,” shall be completed and filed by its combined group business enterprises required to apportion their New Hampshire business activity, in accordance with RSA 77-E:4.

(b) Combined group business enterprises preparing Form BET-80-WE shall attach the form to Form BET.

Source. #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev 2411.07), EXPIRED: 12-23-07

New. #9065, eff 1-10-08 (from Rev 2411.11); ss by #11032, eff 1-29-16 (formerly Rev 2411.08); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.07 Estimated Tax Forms. A business enterprise having an annual projected tax liability in excess of $260 shall complete and file the applicable estimated tax form:

(a) Form NH-1040-ES, “Estimated Proprietorship Business Tax”;

(b) Form NH-1041-ES “Estimated Fiduciary Business Tax”;

(d) Form NH-1120-ES, “Estimated Corporation Business Tax.”

Source. #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev 2411.08), EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #10332, eff 5-9-13; ss by #11032, eff 1-29-16 (formerly Rev 2411.09); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.08 Form AU-22, Certification Request Form. A business enterprise seeking a certification statement of good standing, statement for withdrawal, or certificate of dissolution from the department shall submit Form AU-22, “Certification Request Form,” accompanied by the statutorily set fee and the documents described in Rev 2409.

Source. #6130, eff 11-23-95; ss and moved by #7178, eff 12-23-99 (from Rev 2411.09), EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #10332, eff 5-9-13; ss by #11032, eff 1-29-16 (formerly Rev 2411.10); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.09 Form DP-165, Research and Development Tax Credit Application.

(a) A business enterprise shall complete and file Form DP-165, “Research & Development Tax Credit Application” by June 30 following the taxable period, to apply for a research and development tax credit.

(b) The application shall be accompanied by federal Form 6765, Credit for Increasing Research Activities.

Source. #7178, eff 12-23-99 (from Rev 2411.10), EXPIRED: 12-23-07

New. #9065, eff 1-10-08; ss by #11032, eff 1-29-16 (formerly Rev 2411.11); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.10 Forms Applying Credits for Business Enterprise Tax. A business enterprise reporting a business profits tax credit for research and development, or an economic revitalization zone tax credit, shall complete and file the following applicable form with their business enterprise tax return Form DP-160 “Schedule of Credits”.

Source. #9065, eff 1-10-08; ss by #11032, eff 1-29-16 (formerly Rev 2411.12); ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.11 Form DP-216, Employee Leasing Company Business Enterprise Tax (BET) Election.

(a) An employee leasing company and a client company shall make an election under RSA 77-E:13-a by jointly completing and filing Form DP-216, “Employee Leasing Company Business Enterprise Tax (BET) Election,” with the department.

(b) For an election to be effective for any given tax year, the employee leasing company and the client company shall jointly complete and file Form DP-216 prior to the end of the employee leasing company's tax year.

(c) To terminate an election, the employee leasing company and the client company shall jointly complete and file Form DP-216 with the department prior to the end of the employee leasing company’s tax year to which the termination relates.

(d) Employee leasing companies and client companies making an election under RSA 77-E:13-a shall attach a copy of Form DP-216 to each Form BET filed while the election is in effect.

Source. #11044, eff 2-24-16; ss by #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.12 Form GPA-01, Granite Patron of the Arts Tax Credit Application.

(a) Business organizations, business enterprises, or individuals that made a donation to the New Hampshire department of natural & cultural resources division of the arts or New Hampshire council of the arts and wish to apply for a tax credit shall complete and file Form GPA-01, “Granite Patron of the Arts Tax Credit Application” by June 30 following the taxable period.

(b) The application shall be accompanied by Form GPA-02, “Granite Patron of the Arts Tax Credit Receipt.”

Source. #14573, eff 5-2-26, EXPIRES: 5-2-36

Rev 2411.13 Form GPA-02, Granite Patron of the Arts Tax Credit Receipt.

(a) Business organizations, business enterprises, or individuals that made a donation and wish to apply for a tax credit shall complete and file by June 30 following the taxable period Form GP-02, “Granite Patron of the Arts Tax Credit Receipt.” Form GPA-02 shall have been signed by an authorized representative of the New Hampshire department of natural & cultural resources division of the arts or New Hampshire council of the arts.

(b) The receipt shall be accompanied by Form GPA-01, “Granite Patron of the Arts Tax Credit Application.”

Source. #14573, eff 5-2-26, EXPIRES: 5-2-36

APPENDIX A

Rule	Specific State Statute the Rule Implements
Rev 2401.01	RSA 21-J:13, I; RSA 77-E:3, II
Rev 2401.02	RSA 77-E:1, III
Rev 2401.03	RSA 21-J:13, I
Rev 2401.04	RSA 277-B:2, III
Rev 2401.05	RSA 21-J:13, I; RSA 301-B:5, VIII; RSA 301-B:28, III; RSA 301-B:29
Rev 2401.06	RSA 77-E:4
Rev 2401.07	RSA 277-B:2, V
Rev 2401.08	RSA 77-E:4
Rev 2401.09	RSA 21-J:13, I
Rev 2401.10	RSA 21-J:13, I; RSA 77-A:15; RSA 77-E:1, XVII
Rev 2401.11	RSA 21-J:13, I
Rev 2401.12	RSA 21-J:13, I; RSA 77-E:1, VI(f)
Rev 2401.13	RSA 21-J:13, I; RSA 77-E:4, I
Rev 2401.14	RSA 21-J:13, I; RSA 77-E:4, I(c)(3)
Rev 2401.15	RSA 21-J:13, I; RSA 77-A:3; RSA 77-A:4
Rev 2401.16	RSA 21-J:13, I
Rev 2402.01 – Rev 2402.07	RSA 21-J:13, I; RSA 77-E:1, RSA 77-E:2, RSA 77-E:4
Rev 2402.01(a) intro and (a)(7)	RSA 77-E:1; RSA 77-E:11, II
Rev 2402.08	RSA 77-A:5, X; RSA 77-E:13-a;
Rev 2403.01 – Rev 2403.02	RSA 21-J:13, I; RSA 77-E:3
Rev 2403.03	RSA 77-E:4; RSA 77-E:3
Rev 2404.01	RSA 21-J:13, I; RSA 77-E:4
Rev 2404.02 – Rev 2404.05	RSA 21-J:13, I; RSA 77-E:1; RSA 77-E:4
Rev 2404.06	RSA 77-E:4
Rev 2404.061	RSA 77-E:1, III; RSA 77-E:4
Rev 2404.07	RSA 21-J:13, I; RSA 77-E:4
Rev 2405.01 and Rev 2405.04	RSA 21-J:13, I; RSA 77-E:6, RSA 77-E:13
Rev 2405.02	RSA 77-E:5, II; RSA 77-E:6, RSA 77-E:13
Rev 2405.03	RSA 77-E:11, II; RSA 77-E:6; RSA 21-J:28-a
Rev 2406.01	RSA 21-J:13, I; RSA 77-E:13
Rev 2406.02	RSA 21-J:13, I; RSA 162-L:10; RSA 162-N:6-7; RSA 162-P:1; RSA 77-G; RSA 77-E
Rev 2406.03	RSA 21-J:13, I; RSA 162-L:10; RSA 77-E:3-a; RSA 77-E:3-b
Rev 2406.04	RSA 21-J:13, I; RSA 162-N:7; RSA 77-E:3-a
Rev 2406.05	RSA 21-J:13, I; RSA 162-P:1; RSA 77-A:5, XIII(b)(1)(D); RSA 77-E:3-b
Rev 2406.06	RSA 77-E:3-d; RSA 77-G:3; RSA 77-G:4, II; RSA 77-G:6, I(f)
Rev 2407.01	RSA 21-J:13, I; RSA 77-E:5, RSA 77-E:7, RSA 77-E:8, RSA 77-E:9
Rev 2407.02	RSA 21-J:13, I
Rev 2407.03	RSA 77-E:11, II; RSA 77-E:5, I
Rev 2407.04	RSA 21-J:13, I; RSA 21-J:29.
Rev 2407.05	RSA 21-J:13, I; RSA 77-E:5, I; RSA 77-E:8; RSA 77-E:11, II
Rev 2407.06	RSA 21-J:13, I; RSA 77-E:9
Rev 2407.07	RSA 21-J:13, I; RSA 77-E:8
Rev 2408.01 – Rev 2408.03	RSA 21-J:13, I; RSA 77-E:10; RSA 21-J:14
Rev 2409.01 – Rev 2409.04	RSA 21-J:13, I; RSA 77-E:12
Rev 2410.01 – Rev 2410.03	RSA 21-J:13, I; RSA 21-J:33-a; RSA 21-J:33-b; RSA 21-J:33-c; RSA 77-E:7, RSA 77-E:11
Rev 2411.01 – Rev 2411.08	RSA 21-J:13, I; RSA 77-E:4; RSA 77-E:5
Rev 2411.09	RSA 77-E:5, II; RSA 77-E:6, RSA 77-E:13
Rev 2411.10	RSA 21-J:13, I
Rev 2411.11	RSA 77-E:13-a
Rev 2411.12	RSA 77-E:3-f
Rev 2411.13	RSA 77-E:3-f

APPENDIX B

RSA 77-E:4, I(c)(3) in effect prior to January 1, 2021 for taxable periods ending before December 31, 2021 reads:

The percentage of the total sales, including charges for services, made by the business enterprise everywhere as is made by it within this state. Sales of tangible personal property are made in this state if the property is delivered or shipped to a purchaser, other than the United States government, within this state regardless of free on board point or other conditions of sale, or the property is shipped from an office, store, warehouse, factory or other place of storage in this state and (A) the purchaser is the United States government, or (B) the business enterprise is not taxable in the state of the purchaser. Sales other than sales of tangible personal property are in this state if the revenue-producing activity is performed in this state, or the revenue-producing activity is performed both in and outside this state and a greater proportion of the revenue-producing activity is performed in this state than in any other state, based on costs of performance.