SB 278-FN – AS INTRODUCED
2006 SESSION
09/01
SENATE BILL 278-FN
This bill exempts transfers of title related to a change in form of organization from the real estate transfer tax.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
06-2007
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
AN ACT exempting certain transfers from the real estate transfer tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraphs; Real Estate Transfer Tax; Exceptions. Amend RSA 78-B:2 by inserting after paragraph XVIII the following new paragraphs:
XIX.(a) To a transfer of title from an entity, the ownership of which is represented by transferable interests, to another entity, the ownership of which is represented by transferable interests, provided that:
(1) The transfer of title is coincidental to a change in the transferor entity's form of organization to that of the transferee entity;
(2) As a result of the change in the transferor entity's form of organization, the assets and liabilities of the transferor entity immediately preceding the change in form of organization and the assets and liabilities of the transferee entity immediately following the change in form of organization are the same; and
(3) At the time of the transfer of title, the owner or owners of the transferor and the owner or owners of the transferee, and the respective ownership percentages of each, are identical.
(b) This paragraph shall not apply any transfer of title from or to a sole proprietorship or any other entity the ownership of which is not represented by transferable interests.
(c) For the purpose of this paragraph, a beneficial interest in a trust shall be considered an ownership interest in such trust.
XX. To a transfer of title pursuant to a merger, consolidation, or other reorganization qualifying as a tax-free reorganization as defined under the United States Internal Revenue Code of 1986, section 368, as amended.
2 Declaration of Consideration Required. Amend RSA 78-B:10, III(a) to read as follows:
(a) Transfers exempted by RSA 78-B:2, except transfers exempted by RSA 78-B:2, IX, XIX, or XX.
3 Effective Date. This act shall take effect July 1, 2006.
LBAO
06-2007
Revised 12/30/05
SB 278 FISCAL NOTE
AN ACT exempting certain transfers from the real estate transfer tax.
FISCAL IMPACT:
The Department of Revenue Administration indicates this bill will decrease state unrestricted general fund revenue, state restricted education trust fund revenue and county revenue by an indeterminable amount in FY 2007 and each year thereafter. There is no fiscal impact on state, county and local expenditures or local revenue.
METHODOLOGY:
The Department of Revenue Administration (DRA) states that this bill exempts transfers of title related to a change in form of organization from the real estate transfer tax. The DRA determined that the reduction in real estate tax revenue from this exemption would be $10 to $30 million in FY 2007 based on actual observation of the impact of the previous repeal of a similar more narrow provision. A projection was not made beyond FY 2007, however, similar losses could be expected to occur in subsequent fiscal years. DRA also indicates that reductions in real estate transfer tax collections will result in a reduction of county revenue from the commission received for processing this tax. The Department states that this tax change can be administered within their existing budget.