Bill Text: NH SB190 | 2019 | Regular Session | Amended
Bill Title: Relative to apportionment of sales under the business profits tax and the apportionment of dividends under the business enterprise tax and establishing a committee to study the apportionment of gross business profits under the business profits tax.
Spectrum: Bipartisan Bill
Status: (Passed) 2019-09-09 - II. Remainder Effective 09/06/2019 [SB190 Detail]
Download: New_Hampshire-2019-SB190-Amended.html
SB 190-FN - AS AMENDED BY THE HOUSE
03/07/2019 0624s
6Jun2019... 2182h
2019 SESSION
19-0625
10/01
SENATE BILL 190-FN
SPONSORS: Sen. Birdsell, Dist 19; Sen. D'Allesandro, Dist 20
COMMITTEE: Ways and Means
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AMENDED ANALYSIS
This bill modifies the apportionment to this state of sales of a business organization with activity in other states and the apportionment of dividends of a business enterprise based on sales made within this state.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/07/2019 0624s
6Jun2019... 2182h 19-0625
10/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Business Profits Tax; Apportionment of Sales. Amend RSA 77-A:3, I(c) to read as follows:
(c) The percentage of the total sales, including charges for services, made by the business organization everywhere as is made by it within this state[.]:
(1) 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 f.o.b. 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 [(1)] (A) the purchaser is the United States government, or [(2)] (B) the business organization is not taxable in the state of the purchaser.
(2) Sales other than sales of tangible personal property are in this state if the [income-producing activity is performed in this state, or the income-producing activity is performed both in and outside this state and a greater proportion of the income-producing activity is performed in this state than in any other state, based on costs of performance] business organization's market for the sales is in this state, as follows:
(A) In the case of sale, rental, lease or license of real property, if and to the extent the property is located in this state;
(B) In the case of rental, lease or license of tangible personal property, if and to the extent the property is located in this state;
(C) In the case of sale of a service, if the service is delivered to a location in this state;
(D) In the case of sale, rental, lease or license of intangible property, if and to the extent the property is used in this state;
(E) In the case of interest income, if and to the extent the debtor or encumbered property is located in this state;
(F) In the case of dividend income, if and to the extent the business organization's commercial domicile is in this state; and
(G) In the case of other income, if and to the extent the income is derived from sources in this state.
(3) 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.
(4) 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.
2 Business Enterprise Tax; Apportionment of Dividends. Amend RSA 77-E:4, I(c)(3) to read as follows:
(3) The percentage of the total sales, including charges for services, made by the business enterprise everywhere as is made by it within this state[.]:
(A) 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)] (i) the purchaser is the United States government, or [(B)] (ii) the business enterprise is not taxable in the state of the purchaser.
(B) 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] business enterprise’s market for the sales is in this state, as follows:
(i) In the case of sale, rental, lease or license of real property, if and to the extent the property is located in this state;
(ii) In the case of rental, lease or license of tangible personal property, if and to the extent the property is located in this state;
(iii) In the case of sale of a service, if and to the extent the service is delivered to a location in this state;
(iv) In the case of sale, rental, lease or license of intangible property, if and to the extent the property is used in this state;
(v) In the case of interest income, if and to the extent the debtor or encumbered property is located in this state;
(vi) In the case of dividend income, if and to the extent the business enterprise’s commercial domicile is in this state; and
(vii) In the case of other income, if and to the extent the income is derived from sources in this state.
(C) 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.
(D) 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.
3 Applicability. Sections 1 and 2 of this act shall apply to taxable periods ending on or after December 31, 2021.
4 Effective Date.
I. Sections 1 and 2 of this act shall take effect January 1, 2021.
II. The remainder of this act shall take effect upon its passage.
19-0625
Amended 3/11/19
SB 190-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2019-0624s)
AN ACT relative to apportionment of sales under the business profits tax.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | ||||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 | |
Appropriation | $0 | $0 | $0 | $0 | |
Revenue | $0 | Indeterminable | Indeterminable | Indeterminable | |
Expenditures | $0 | $0 | $0 | $0 | |
Funding Source: | [ X ] General [ X ] Education [ ] Highway [ ] Other | ||||
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METHODOLOGY:
This bill amends the Business Profits Tax method for assigning service-based revenue and income from the use of intangibles to New Hampshire from a cost-of-performance to market-based sourcing method. The Department has no data or records on file from which to determine the fiscal impact of shifting from the cost-of-performance method of apportionment to the market-based sourcing method to determine a fiscal impact.
AGENCIES CONTACTED:
Department of Revenue Administration
