HB 925-FN-A – AS INTRODUCED

2007 SESSION

07-1096

09/10

HOUSE BILL 925-FN-A

AN ACT relative to state and local taxes.

SPONSORS: Rep. Hamm, Merr 4; Rep. Wells, Rock 8; Rep. Gould, Rock 5; Rep. K. Shaw, Hills 26; Rep. Mulholland, Graf 10

COMMITTEE: Ways and Means

ANALYSIS

This bill:

I. Taxes property which is not primary residential real estate at twice the rate of primary residential real estate under the local property tax.

II. Establishes a luxury sales and use tax on motor vehicles costing $30,000 or more and any item costing $10,000 or more.

III. Establishes a tax on entertainment admission charges.

IV. Establishes a tax on gambling winnings.

V. Expands the definition of tobacco products subject to the tobacco tax.

VI. Changes the method of calculating the beer tax to a method based on price rather than volume.

VII. Establishes a tax on estates exceeding $3,000,000, excluding certain farm property.

VIII. Establishes a payroll tax on businesses with payrolls exceeding $10,000 per week.

IX. Changes the rate of the statewide enhanced education tax.

X. Dedicates revenues from the taxes established in this bill to the education trust fund.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-1096

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT relative to state and local taxes.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Property Taxes. Amend RSA 72:6 to read as follows:

72:6 Real Estate.

I. All real estate, whether improved or unimproved, shall be taxed except as otherwise provided. Any real estate which is not primary residential real estate, as defined in paragraph II of this section, and is otherwise subject to taxation under this chapter shall be taxed by the town or city at a rate twice that of primary residential real estate.

II. In this section, “residential real estate” means the real estate which the taxpayer occupies as his or her principal place of abode together with any land or buildings appurtenant thereto and shall include manufactured housing if used for said purpose.

2 New Chapter; Luxury Sales and Use Tax. Amend RSA by inserting after chapter 77-E the following new chapter:

CHAPTER 77-F

LUXURY SALES AND USE TAX

77-F:1 Definitions. In this chapter:

I. “Casual sale” means an isolated or occasional sale of a motor vehicle or an item of tangible personal property by a person who is not regularly engaged in the business of making sales of that general type of property at retail where the property was obtained by the person making the sale, through purchase or otherwise, for his or her own use. Aircraft, snowmobiles, motorboats, and vessels, are hereby specifically excluded from the definition of casual sale.

II. “Commissioner” means the commissioner of the department of revenue administration.

III. “In this state” or “in the state” means within the exterior limits of the state of New Hampshire and includes all territory within these limits owned by or ceded to the United States of America.

IV. “Person” means an individual, partnership, society, association, joint stock company, corporation, public corporation or public authority, estate, receiver, trustee, assignee, referee, and any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise and any combination of the foregoing.

V. “Persons required to collect tax” or “persons required to collect any tax imposed by this chapter” means and includes every vendor of taxable motor vehicles and taxable tangible personal property or services. These terms shall also include any officer or employee of a corporation or of a dissolved corporation who as that officer or employee is under a duty to act for the corporation in complying with any requirement of this chapter and any member of a partnership.

VI. “Property and services the use of which is subject to tax” means and includes all motor vehicles and property sold to a person within the state, whether or not the sale is made within the state, the use of which motor vehicle or property is subject to tax under RSA 77-F:4 or will become subject to tax when such motor vehicle or property is received by or comes into the possession or control of such person within the state.

VII. “Purchaser” means a person who purchases motor vehicles or property or who receives services taxable under this chapter.

VIII. “Receipt” means the amount of the sales price of any motor vehicles or property taxable under this chapter valued in money, whether received as money or otherwise, without any deduction for expenses or early payment discount, but excluding any amount for which credit is allowed by the vendor to the purchaser, and excluding any allowance in cash or by credit made upon the return of merchandise pursuant to warranty or the price of motor vehicles or property returned by customers when the full price thereof is refunded either in cash or by credit, and excluding the price received for labor or services used in installing or applying to repairing the motor vehicles or property sold, if separately charged or stated, and the cost of transportation from the retailer’s place of business or other point from which shipment is made directly to the purchaser provided those charges are separately stated and provided the transportation occurs by means of common carrier, contract carrier, or the United States mails.

IX. “Retail sale” or “sold at retail” means the sale of motor vehicles or tangible personal property to any person for any purpose, other than for resale, except resale as a casual sale. Sales of tangible personal property to all contractors, subcontractors or repairpersons of materials and supplies for use by them in erecting structures for others, or building on, or otherwise improving, altering, or repairing real property of others are deemed to be retail sales.

X. “Sales, selling, or purchase” means any transfer of title or possession or both, exchange or barter, rental, lease or license to use or consume, conditional or otherwise, in any manner or by any means whatsoever for a consideration, or any agreement therefor; except professional, insurance, personal service transactions, advertising services and computer and data processing services where tangible personal property is transferred as part of such service transaction so long as no separate charge is made for the tangible personal property and so long as the value of the tangible personal property transferred is essentially an inconsequential element in relation to the value of the service transaction. The provisions of this paragraph shall be retroactive if to the benefit of the taxpayer.

XI. “Tangible personal property” means personal property which may be seen, weighed, measured, felt, touched, or in any other manner perceived by the senses and shall include fuel, but shall not include rights and credits, insurance policies, bills of exchange, stocks and bonds, and similar evidences of indebtedness or ownership. Tangible personal property shall also include electricity unless RSA 83-E, the electricity consumption tax, is in effect. Tangible personal property shall not include motor vehicles.

XII. “Use” means the exercise of any right or power over motor vehicles or tangible personal property by the purchaser thereof and includes, but is not limited to, the receiving, storage, or any keeping or retention for any length of time, withdrawal from storage, any installation, any affixation to real or personal property, or any consumption of that property.

XIII. “Vendor” means and includes:

(a) A person making sales of motor vehicles or tangible personal property or services, the receipts from which are taxed by this chapter;

(b) A person maintaining a place of business in the state and making sales, whether at that place or business or elsewhere, to persons within the state of motor vehicles or tangible personal property or services, the use of which is taxed by this chapter;

(c) A person who solicits business either by employees, independent contractors, agents or other representatives or by distribution of catalogs or other advertising matter and by reason thereof makes sales to persons within the state of motor vehicles or tangible personal property or services, the use of which is taxed by this chapter;

(d) Any other person making sales to persons within the state of motor vehicles or tangible personal property or services, the use of which is taxed by this chapter, who may be authorized by the commissioner to collect the tax imposed by this chapter; and

(e) The state of New Hampshire or any of its agencies, instrumentalities, public authorities, public corporations, including a public corporation created pursuant to agreement or compact with another state, or political subdivision when that entity sells motor vehicles or services or property of a kind ordinarily sold by private persons.

77-F:2 Imposition of Luxury Sales Tax. Except as otherwise provided in this chapter, there shall be paid a tax of 3 percent upon the receipts from the sale of motor vehicles costing more than $30,000 or more and each item of tangible personal property costing $10,000 or more purchased at retail in this state.

77-F:3 Tax Bracket Schedule.

I. For the purpose of adding and collecting the tax imposed by RSA 77-F:2, or an amount equal as nearly as possible or practicable to the average equivalent thereof, to be reimbursed to the vendor by the purchaser, the following formula for each dollar the sales price exceeds the amounts in RSA 77-F:2, shall be in force and effect as follows:

Amount of Sale Amount of Tax

0.01 - 0.05 .01

0.06 - 0.50 .02

0.51 - 1.00 .03

II. In addition to a tax of .03 on each full dollar, a tax shall be collected on each part of a dollar in excess of a full dollar in accordance with the following formula:

0.01 - 0.50 .02

0.51 - 1.00 .03

III. When several taxable items are purchased together at the same time, the tax shall be computed on the total amount of the purchase of several taxable items.

77-F:4 Imposition of Compensating Use Tax. Unless property has already been or will be subject to the purchase tax under RSA 77-F:2, there is imposed on every person a use tax at the rate of 3 percent for the use within this state, except as otherwise exempted under this chapter:

I. Of each item of tangible personal property costing $10,000 or more purchased at retail; and

II. Of any tangible personal property manufactured, processed or assembled by the user, if items of the same kind of tangible personal property are offered for sale for $10,000 or more by the user in the regular course of business, but the mere storage, keeping, retention or withdrawal from storage of tangible personal property or the use for demonstrational or instructional purposes of tangible personal property by the person who manufactured, processed or assembled such property shall not be deemed a taxable use by such person.

III. Of any motor vehicles purchased at retail costing $30,000 or more.

77-F:5 Administration; Rulemaking. In addition to other powers granted to the commissioner in this chapter and in RSA 21-J, the commissioner shall:

I. Collect the taxes, interest, additions to tax, and penalties imposed under this chapter and RSA 21-J.

II. Adopt rules, pursuant to RSA 541-A, relative to:

(a) The administration of the luxury sales and use tax.

(b) The recovery of any tax, interest on tax, additions to tax, or the penalties imposed by RSA 77-F or RSA 21-J.

(c) The form of any returns, certificates and documents and the data which they must contain for the correct determination on computation of receipts and the tax assessed thereon.

III. Require any person required to collect taxes to keep detailed records of all receipts, received, charged or accrued, including those claimed to be nontaxable, and also of the nature, type, value, and amount of all purchases, sales, and other facts relevant in determining the amount of tax due and to furnish that information upon request to the commissioner.

IV. Publish and maintain, as the commissioner deems necessary, lists of specific items of tangible personal property which are found to be exempt from tax under RSA 77-F:2.

77-F:6 Liability for Tax. Every person required to collect any tax imposed by this chapter shall be personally liable for the tax imposed, collected or required to be collected, under this chapter. That person shall have the same rights in collecting the tax from the purchaser or regarding nonpayment of the tax by the purchaser as if the tax were a part of the purchase price of the motor vehicle or property, and payable at the same time; provided, however, that the commissioner shall be joined as a party in any action or proceeding brought to collect the tax.

77-F:7 Principal and Agent; Joint Liability. When, in the opinion of the commissioner, it is necessary for the efficient administration of this chapter to treat any salesperson, representative, peddler, or canvasser as the agent of the vendor, distributor, supervisor, or employer under whom the person operates or from whom the person obtains motor vehicles or tangible personal property sold by the person or for whom the person solicits business, the commissioner may, in the commissioner’s discretion, treat such agent as the vendor jointly responsible with the principal, distributor, supervisor, or employer for the collection and payment of the tax.

77-F:8 Payments and Return by Purchaser.

I. Where any purchaser has failed to pay a tax imposed by this chapter to the person required to collect the same, then in addition to all other rights, obligations, and remedies provided, the tax shall be payable by the purchaser directly to the commissioner and it shall be the duty of the purchaser to file a return with the commissioner and to pay the tax to the commissioner within 20 days of the date the tax was required to be paid.

II. The commissioner may, whenever the commissioner deems it necessary for the proper enforcement of this chapter, provide by rule that purchasers shall file returns and pay directly to the commissioner any tax herein imposed, at such times as returns are required to be filed and paid by persons required to collect the tax.

77-F:9 Transfers Not in Course of Business; Notice; Lien.

I. Whenever a person required to collect the tax shall make a sale, transfer, or assignment in bulk of any part or the whole of such person’s business assets, otherwise than in the ordinary course of business, the purchaser, transferee or assignee shall, at least 10 days before taking possession of the subject of the sale, transfer, or assignment, or payment therefor, notify the commissioner by registered mail of the proposed sale and of the price, terms and conditions thereof whether or not the seller, transferer, or assignor, has represented, to, or informed the purchaser, transferee, or assignee that any tax is owed pursuant to this chapter, and whether or not the purchaser, transferee, or assignee has knowledge that the taxes are owing, and whether any taxes are in fact owing.

II. Whenever the purchaser, transferee, or assignee shall fail to give notice to the commissioner as required by paragraph I, or whenever the commissioner shall inform the purchaser, transferee, or assignee that a possible claim for the tax or taxes exists, any sums of money, property or chooses in action, or other consideration, which the purchaser, transferee, or assignee is required to transfer over to the seller, transferer, or assignor shall be subject to first priority right and lien for any taxes theretofore or thereafter determined to be due from the seller, transferer or assignor to the state, and the purchaser, transferee, or assignee is forbidden to transfer to the seller, transferer or assignor any sums of money, property, or chooses in action to the extent of the amount of the state’s claim. For failure to comply with this section the purchaser, transferee, or assignee shall be personally liable for the payment to the state of any taxes theretofore or thereafter determined to be due to the state from the seller, transferer, or assignor, and the liability may be assessed and enforced in the same manner as the liability for tax under this chapter.

77-F:10 Registration.

I. On or before September 1, 2007, or in the case of persons commencing business or opening new places of business after that date, within 3 days after the commencement or opening, every person required to collect any tax imposed by this chapter and every person purchasing motor vehicles and tangible personal property subject to the tax under this chapter for resale shall file with the commissioner a certificate of registration in a form prescribed by the commissioner. The commissioner shall issue, without charge, to each registrant a certificate of authority empowering the registrant to collect the tax. Each certificate shall state the place of business to which it is applicable. The certificate of authority shall be prominently displayed in the place of business of the registrant. A registrant who has no regular place of doing business shall attach the certificate to the registrant’s cart, stand, truck or other merchandising device, or carry it on the registrant’s person. The certificate shall be nonassignable and nontransferable and shall be surrendered to the commissioner immediately upon the registrant’s ceasing to do business at the place named.

II. Any person who is not otherwise required to collect any tax imposed by this chapter and who makes sales to persons within the state of motor vehicles or tangible personal property or services, the use of which is subject to tax under this chapter, may, if such person so elects, file a certificate of registration with the commissioner who may, in the commissioner’s discretion and subject to such conditions as the commissioner may impose, issue to such person a certificate of authority to collect the compensating use tax imposed by this chapter.

77-F:11 Restrictions on Advertising.

I. No person required to collect any tax imposed by this chapter shall advertise or hold out to any person or to the public in general, in any manner, directly or indirectly, that the tax is not considered as an element in the price payable by the customer, or that such person will pay the tax, that the tax will not be separately charged and stated to the customer, or that the tax will be refunded to the customer.

II. Upon written application duly made and proof duly presented to the satisfaction of the commissioner showing that in the vendor’s particular business it would be impractical for such vendor to separately charge the tax to the customer, the commissioner may waive the application of the requirement herein as to such vendor.

III. Whenever reference is made in placards or advertisements or in any other publications to any tax imposed by this chapter, the reference shall be in substantially the following form: “luxury sales and use tax”; except that in any bill, receipt, statement or other evidence or memorandum of sale issued or employed by a person required to collect tax, if the tax is required to be stated separately thereon as provided in RSA 77-F:23, the word “tax” shall suffice.

77-F:12 Recordkeeping. Every person required to collect any tax imposed by this chapter shall keep records of every sale and of all amounts paid or charged or due thereon and of the tax payable thereon, in such form as the commissioner shall require. These records shall include a true copy of each sales slip, invoice, receipt, statement or memorandum upon which RSA 77-F:23 requires that the tax be stated separately. The records shall be available for inspection and examination at any time upon demand by the commissioner or the commissioner’s duly authorized agent or employee and shall be preserved for a period of 3 years, except that the commissioner may consent to their destruction within that period or may require that they be kept longer.

Exemptions

77-F:13 Sales Not Covered. Receipts from the following shall be exempt from the tax on retail purchases imposed under RSA 77-F:2 and the use tax imposed under RSA 77-F:4:

I. Sales not within the taxing power of this state under the Constitution of the United States.

II. All health care items, including, but not limited to, purchases of medicines and drugs sold pursuant to a doctor’s prescription for human use, oxygen for medical purposes, blood, blood plasma, artificial components of the human body, prosthetic devices, medicinal appliances, corrective appliances, corrective optical devices, dentures, hearing aids, seeing eye dogs, crutches, wheelchairs, hospital type beds, medical and dental devices and instruments, medical and dental equipment (including component parts thereof) and supplies used in treatment intended to alleviate human suffering or to correct, in whole or in part, human physical disabilities.

III. Casual sales.

IV. Purchases of all alcoholic beverages.

V. Purchases of motor fuels; taxed or exempted under RSA 260, provided, however, that jet fuel shall be taxed under this chapter.

VI. Purchases of tobacco products taxed or exempted under RSA 78.

VII. Rents for rooms, taxed under RSA 78-A and the transactions exempted therefrom.

VIII. Purchases of meals, taxed or exempted under RSA 78-A.

IX. Purchases of food, food stamps, purchases made with food stamps, food products and beverages sold for human consumption off the premises where sold.

X. Purchases of equipment, supplies, and building materials made directly to volunteer fire departments, volunteer ambulance companies, or volunteer rescue squads for official use by the volunteer organizations.

XI. Funeral charges, including, but not limited to, sales of tangible personal property such as caskets, vaults, boxes, clothing, crematory urns, and other such funeral furnishings as are necessary incidents of the funeral, and other items sold as an accommodation rather than as an integral part of the funeral service or preparation therefor.

XII. Tangible personal property purchased for use or consumption directly and exclusively, except for isolated or occasional uses, in commercial, industrial or agricultural research or development in the experimental or laboratory sense. It shall be rebuttably presumed that uses are not isolated or occasional if they total more than 4 percent of the time the machinery or equipment is operated. Such research or development shall not be deemed to include the ordinary testing or inspection of materials or products for quality control, efficiency surveys, management studies, consumer surveys, advertising promotions, or research in connection with literary, historical or similar projects.

XIII. Purchases of electricity, oil, gas and other fuels used in a residence for all domestic uses including heating, and sales of such fuels when used by businesses and farms for farming and business purposes.

XIV. All vessels over 50 tons.

77-F:14 Transactions Not Covered. This chapter shall not apply to the following transactions:

I. The transfer of tangible personal property to a corporation solely in consideration for the issuance of its stock, pursuant to a merger or consolidation effected under the laws of New Hampshire or any other jurisdiction.

II. The distribution of property by a corporation to its stockholders as a liquidating dividend.

III. The distribution of property by a partnership to its partners in whole or partial liquidation.

IV. The distribution of property by a limited liability company to its members in whole or partial liquidation.

V. The transfer of property to a corporation upon its organization in consideration for the issuance of its stock.

VI. The contribution of property to a partnership in consideration for a partnership interest.

VII. The contribution of property to a limited liability company in consideration for a membership interest.

VIII. The sale of tangible personal property where the purpose of the vendee is to hold the thing transferred as security for the performance of an obligation of the vendor.

IX. The sawing of lumber owned by the person requesting the sawing or such person’s agent.

77-F:15 Organizations not Covered. Any purchase or service charged by or to any of the following or any use by any of the following are not subject to the sales and use taxes imposed under this chapter:

I. The state of New Hampshire, or any of its agencies, instrumentalities, public authorities, public corporations, including a public corporation created pursuant to agreement or compact with another state, or political subdivisions when it is the purchaser, user or consumer, or when it is a vendor of services or property of a kind not ordinarily sold by private persons.

II. The United States of America, any of its agencies and instrumentalities, insofar as it is immune from taxation when it is the purchaser, user or consumer, or when it sells services or property of a kind not ordinarily sold by private persons.

III. Organizations which qualify for exempt status under the provisions of section 501(c)(3) of the United States Internal Revenue Code, as the same may be amended or redesignated, excepting sales, storage or use in activities which are mainly commercial enterprises; provided, however:

(a) That the organization first shall have obtained a certificate from the commissioner stating that it is entitled to the exemption;

(b) That the sale or service or use is for the exempt purpose of such organization; and

(c) That the vendor keeps a record of the purchase price of each such separate purchase, the name of the purchaser, the date of each separate purchase, and the number of the certificate.

IV. Purchases of building materials and supplies to be used in the construction, reconstruction, alteration, remodeling or repair of:

(a) Any building structure or other public work owned by or held in trust for the benefit of any governmental body or agency mentioned in paragraphs I and II of this section and used exclusively for public purposes;

(b) Any building or structure owned by or held in trust for the benefit of any organization described in paragraph III and used exclusively for the purposes upon which its exempt status is based; and

(c) Any building or housing project subject to the provisions of RSA 204-C, provided, however, that the governmental body or agency, the organization, or person has first obtained a certificate from the commissioner stating that it is entitled to the exemption and the vendor keeps a record of the purchase price of each separate purchase, the name of the purchaser, the date of each separate purchase, and the number of the certificate. In this paragraph, the words “building materials and supplies” shall include all materials and supplies consumed, employed or expended in the construction, reconstruction, alteration, remodeling, or repair of any building, structure, or other public work as well as the materials and supplies physically incorporated therein.

V. Organizations which qualify for exempt status under the provisions of section 501(c)(4)-(13) and (19), and political organizations as defined in section 527(e) of the United States Internal Revenue Code, as the same may be amended or redesignated, shall not be exempt from taxation of the purchase or use of motor vehicles and tangible personal property as defined in RSA 77-F:1.

77-F:16 Property Exempt From Use Tax.

I. The following uses of property are not subject to the compensating use tax imposed under this chapter:

(a) Property used by the purchaser in this state prior to July 1, 2007.

(b) Property purchased by the user while a nonresident of this state, except in the case of tangible personal property which the user, in the performance of a contract, incorporates into real property located in the state and except in the case of vessels under 50 tons and used in the waters of this state for at least 30 days.

(c) Property or services to the extent that a retail sales or use tax was legally due and paid thereon, without any right to a refund or credit thereof, to any other state or jurisdiction within any other state but only when it is shown that the other state or jurisdiction allows a corresponding exemption with respect to the purchase or use of tangible personal property or services upon which such a purchase tax or compensating use tax was paid to this state. To the extent that the tax imposed by this chapter is at a higher rate than the rate of tax in the first taxing jurisdiction, this exemption shall be inapplicable and the tax imposed by RSA 77-F:4 shall apply to the extent of the difference in the rates.

(d) Property withdrawn from inventory for the purpose of donating such property to an entity described in RSA 77-F:15, I, II, or III.

II. A person while engaged in any manner in carrying on in this state any employment, trade, business, or profession, not entirely in interstate or foreign commerce, shall not be deemed a nonresident with respect to the use in this state of property in that employment, trade, business, or profession.

77-F:17 Certificate or Affidavit of Exemption. Unless a vendor shall have taken from the purchaser a certificate, signed by the purchaser and bearing the purchaser’s name and address and the number of the purchaser’s registration certificate, to the effect that the property was purchased for resale or the purchaser prior to taking delivery, furnishes to the vendor any affidavit, statement, or additional evidence, documentary or otherwise, which the commissioner may require demonstrating that the purchaser is an exempt organization described in RSA 77-F:15, the purchase shall be deemed a taxable purchase at retail. Provided, however, the commissioner may authorize a purchaser, who acquires tangible personal property or services taxable under this chapter under circumstances which make it impossible at the time of acquisition to determine the manner in which the tangible personal property or services will be used, to pay the tax directly to the commissioner and waive the collection of the tax by the vendor. Provided, further, the commissioner shall authorize any contractor, subcontractor or repairperson who acquires tangible personal property taxable under this chapter consisting of materials and supplies for use in erecting structures for others, or building on, or otherwise improving, altering, or repairing real property of others, to pay the tax directly to the commissioner and waive the collection of the tax by the vendor. No such authority shall be granted or exercised except upon application to the commissioner and the issuance by the commissioner of a direct payment permit. If a direct payment permit is granted, its use shall be subject to conditions specified by the commissioner and the payment of tax on all acquisitions pursuant to the permit shall be made directly to the commissioner by the permit holder.

77-F:18 Computing Receipts and Consideration.

I. The retail purchase tax imposed under RSA 77-F:2 and the compensating use tax imposed under RSA 77-F:4 when computed in respect to motor vehicles and tangible personal property wherever manufactured, processed, or assembled and used by such manufacturer, processor, or assembler in the regular course of business within the state, shall be based on the price at which items of the same kind of motor vehicle or tangible personal property are offered for sale by such manufacturer, processor, or assembler.

II. Motor vehicles and tangible personal property which have been purchased by a resident of the state outside of this state for use outside of this state and subsequently become subject to the compensating use tax imposed under this chapter, shall be taxed on the basis of the purchase price of the motor vehicle or property, provided however:

(a) That where a taxpayer affirmatively shows that the motor vehicle or property was used outside the state by the taxpayer for more than 6 months prior to its use within this state, the motor vehicle or property shall be taxed on the basis of current market value of the motor vehicle or property at the time of its first use within this state but the value of the motor vehicle or property, for compensating use tax purposes, may not exceed its cost.

(b) That the compensating use tax on the motor vehicle or tangible personal property brought into this state, other than for complete consumption or for incorporation into real property located in this state, and used in the performance of a contract or subcontract within this state by a purchaser or user for a period of less than 6 months may be based, at the option of the taxpayer, on the fair rental value of the motor vehicle or property for the period of use within this state.

III. For purposes of RSA 77-F:4, I and III, the tax shall be at the rate of 3 percent of the consideration given or contracted to be given for the motor vehicle or property or for the use of the motor vehicle or property adjusted in the same manner as is the sales price under the purchase tax to arrive at “receipts.”

IV. For purposes of RSA 77-F:4, II, the tax shall be at the rate of 3 percent of the price at which items of the same kind of tangible personal property are offered for sale by the user.

77-F:19 Returns.

I. Every person required to collect or pay tax under this chapter shall on or before the twenty-eighth day of February and the thirtieth day of each other month make and file a return for the preceding month with the commissioner. The return of a vendor of motor vehicles or tangible personal property shall show such vendor’s receipts from sales and also the aggregate value of motor vehicles or tangible personal property sold, the use of which is subject to tax under this chapter.

II. The commissioner may extend, for cause shown, the time of filing any return for a period not exceeding 3 months on such terms and conditions as the commissioner may require.

III. The commissioner may permit or require returns to be made covering other periods upon such dates as the commissioner specifies. In addition, the commissioner may require payment of tax liability at such intervals and based upon such classifications as the commissioner may designate. In prescribing the other periods to be covered by the return or intervals or classifications for payment of tax liability, the commissioner may take into account the dollar volume of tax involved as well as the need for insuring the prompt and orderly collection of the taxes imposed.

IV. The commissioner may require amended returns to be filed within 20 days after notice and to contain the information specified in the notice.

77-F:20 Payment of Tax.

I. Every person required to file a return under this chapter shall, at the time of filing the return, pay to the commissioner the taxes imposed by this chapter as well as all other moneys collected by such person under this chapter; provided, however, that every person who collects the tax from purchasers of taxable items according to the tax bracket schedule of RSA 77-F:3 shall be allowed to retain, as partial compensation for services rendered to the state of New Hampshire in collecting the tax, any amount lawfully collected by such person in excess of the tax imposed by this chapter.

II. All the taxes for the period for which a return is required to be filed or for such lesser interval as shall have been designated by the commissioner, shall be due and payable to the commissioner on the date established for the filing of the return for that period, or on the date for such lesser interval as the commissioner has designated, without regard to whether a return is filed or whether the return which is filed correctly shows the amount of receipts, or the value of property or services sold or purchased, or the taxes due thereon.

77-F:21 Surety Bonds.

I. When the commissioner deems it necessary to protect the revenues to be obtained under this chapter, the commissioner may, after notice and hearing, require any vendor required to collect the tax imposed by this chapter to file with the commissioner a bond issued by a surety company authorized by the New Hampshire insurance department to do business in this state, in an amount fixed by the commissioner, to secure the payment of any tax, interest, or penalties due, or which may become due. The vendor shall file a bond within 10 days after the department has issued and mailed such notice. Surety bonds may be required in situations such as, but not limited to, failure to file returns, failure to make payments with returns at the time required by law, tender by a vendor of checks returned for insufficient funds, failure to pay interest and penalties assessed, vendors who are itinerant, transient or temporary, and any other situation which, in the discretion of the commissioner, renders the collection of the tax in jeopardy.

II. The surety on such bond shall be discharged from the liability accruing on the bond after the expiration of 60 days from the date on which the surety shall have lodged with the department a written request to be so discharged; but such request shall not discharge such surety from any liability already accrued or which shall accrue before the expiration of said 60-day period. The duration of surety bonds shall be for one year only, unless the requirement is cancelled or revised by the commissioner before the expiration of the one-year period.

III. In lieu of a bond, cash in an amount prescribed by the commissioner may be deposited with the state treasurer who may, at any time, upon instructions from the commissioner and without notice to the depositor, apply the cash deposited to any tax or interest or penalties due. Cash deposited in lieu of a surety bond shall not earn interest.

IV. Failure to comply with the provisions of this section shall result in the suspension of the vendor’s license, as provided in RSA 77-F:27.

77-F:22 Determination of Tax.

I. If a return required by this chapter is not filed, or if a return when filed, is incorrect or insufficient, the amount of tax due shall be determined and assessed by the commissioner from any information available. If necessary, the tax may be estimated on the basis of external indices, such as stock on hand, purchases, rental paid, location, scale of rents or charges, comparable rents or charges, type of accommodations and service, number of employees or other factors.

II. The commissioner may provide by rule for the exclusion from taxable receipts of amounts representing sales where the contract of sale has been cancelled, the property returned or the receipt or charge has been ascertained to be uncollectable or, in the case the tax has been paid upon that receipt or charge, for refund or credit of the tax so paid.

77-F:23 Collection of Tax From Purchaser. Every person required to collect the tax shall collect the tax from the purchaser when collecting the price to which it applies. If the purchaser is given any sales slip, invoice, receipt or other statement or memorandum of the price paid or payable, the tax shall be stated, charged and shown separately on the first of the documents given to him. The tax shall be paid to the person required to collect it as trustee for and on account of the state.

77-F:24 Deferred Payment Purchases. The commissioner may provide that the tax upon receipts from purchases on the installment plan, seasonal purchases, or deferred payment purchases may be paid on the amount of each deferred payment and upon the date when the payment is received.

77-F:25 Refunds.

I. Claims for refund or credit may be made by a customer who has actually paid the tax or by a person required to collect the tax, who has collected and paid over the tax to the commissioner, provided that the claim is timely made in accordance with RSA 21-J:28-a and RSA 21-J:29. No actual refund of moneys shall be made to a person until such person establishes to the satisfaction of the commissioner, under such rules as the commissioner may adopt, that such person has repaid to the customer the amount for which the application for refund is made. The commissioner may, in lieu of any refund, allow credit on payments due from the claimant.

II. If the commissioner determines, on a petition for refund or otherwise, that a person has paid an amount of tax under this chapter which, as of the date of the determination, exceeds the amount of tax liability owing from the person to the state, with respect to the current and all preceding taxable periods, under any provision of this title, the commissioner shall forthwith refund the excess amount to the person together with interest as provided in RSA 21-J:28.

77-F:26 Proceedings to Recover Tax.

I. The commissioner may institute actions in the name of the state to recover any tax, interest on tax, additions to tax, or penalties imposed by this chapter.

II. In the collection of the tax imposed by this chapter, the commissioner may use all of the powers granted to tax collectors under RSA 80 for the collection of taxes, except that the tax imposed by this chapter shall not take precedence over prior recorded mortgages. The commissioner shall also have all of the duties imposed upon the tax collectors by RSA 80 that are applicable to the commissioner. The provisions of RSA 80:26 apply to the sale of land for the payment of taxes due under this chapter, and the state treasurer is authorized to purchase the land for the state. If the state purchases the land, the state treasurer shall certify the purchase to the governor, and the governor shall draw a warrant for the purchase price out of any money in the treasury not otherwise appropriated.

77-F:27 Suspension or Revocation of Certificates; Appeal.

I. The commissioner may, after notice and hearing, suspend or revoke the certificate of registration of any person required to collect the tax or may refuse to issue or renew any registration for failure to comply with this chapter or with any pertinent rules adopted hereunder.

II. Any person required to collect the tax aggrieved by a suspension, revocation, or refusal may appeal therefrom, in the same manner as provided in RSA 21-J:28-b for appeal for redetermination or reconsideration of assessments, within 10 days after written notice of the suspension, revocation or refusal has been mailed or delivered to such person.

III. If the appealing person required to collect the tax files a bond running to the state as provided in RSA 77-F:22, then the suspension or revocation shall be inoperative during the appeal.

77-F:28 Liens. If any person required to pay or collect and transmit a tax under this chapter neglects or refuses to pay the same after demand, the amount, together with all penalties and interest provided for in this chapter and together with any costs that may accrue in addition thereto, shall be a lien in favor of the state of New Hampshire upon all property and rights to property, whether real or personal, belonging to such person. Such lien shall arise at the time demand is made by the commissioner of taxes and shall continue until the liability for such sum with interest and costs is satisfied or becomes unenforceable. No lien upon real estate for taxes imposed by this chapter is valid and binding against any person other than the taxpayer until notice of such lien stating the name and address of the taxpayer and the amount of the tax due shall have been filed and recorded in the registry of deeds in the grantor index in the county in which such real estate is located. Notwithstanding the provisions of any other law, the lien shall continue and shall be valid and binding until the liability for the sum, with interest and costs, is satisfied or becomes unenforceable.

77-F:29 Disposition of Revenues. The state treasurer shall deposit all revenues collected by the commissioner under this chapter into the education trust fund established by RSA 198:39.

3 Definitions; Meals and Rooms Tax; Operator. RSA 78-A:3, IV is repealed and reenacted to read as follows:

IV. “Operator” means any person operating a hotel, charging for a taxable meal, receiving gross rental receipts, or receiving admission charges, whether as owner or proprietor or lessee, sublessee, mortgagee, licensee, or otherwise.

4 New Paragraphs; Meals and Rooms Tax; Definitions. Amend RSA 78-A:3 by inserting after paragraph XIX the following new paragraphs:

XX. “Admission charge” means the amount paid for the right or privilege to have access to a place or location where amusement or entertainment is provided. Places of amusement or entertainment include, but are not limited to, theaters, motion picture shows, auditoriums where lectures and concerts are given, amusement parks, race tracks, ball parks, auto shows, boat shows, camping shows, home shows, dog shows, and antique shows.

XXI. “Participant” means any person who, for consideration paid to another, is provided access to a place or location where amusement or entertainment is provided.

5 Meals and Rooms Tax; Licenses Required; Penalty. Amend RSA 78-A:4 to read as follows:

78-A:4 Licenses Required; Penalty.

I. Each operator shall register with the department the name and address of each place of business within the state where it operates a hotel, sells taxable meals, [or] rents motor vehicles, or charges admission charges. The operator shall complete a registration, upon receipt of which the department shall issue a license for each place in such form as it determines, attesting that the registration has been made. The license remains valid until the business ceases operation, a change in ownership occurs, or the license is revoked or suspended by the department. The license shall be conspicuously posted in a public area upon the premises to which it relates.

II. No person shall engage in serving taxable meals, renting rooms, [or] renting motor vehicles, or charging admission charges without first obtaining the license required by this section. The license is nonassignable and cannot be transferred. Any person who fails to register or obtain a license as provided in this section shall be subject to the penalty provisions of RSA 21-J:39.

6 New Paragraphs; Meals and Rooms Tax; Tax Imposed on Admission Charges. Amend RSA 78-A:6 by inserting after paragraph II-b the following new paragraphs:

II-c. A tax of 5 percent is imposed on admission charges.

7 Meals and Rooms Tax; Collection of Taxes. Amend RSA 78-A:7, I to read as follows:

I.(a) The operator shall either state the amount of the tax to each occupant, purchaser of a meal, [or] renter, or participant, or state that the tax is included in the price of the occupancy, meal, [or] gross rental receipts received, or admission charges. If the amount of the gratuity is not separately stated, the purchaser’s or occupant’s contract or receipt shall include the following language: “The 8 percent tax on meals and rooms is included for the costs of meals and lodging only.”

(b) The operator shall demand and collect the tax from the occupant, purchaser, [or] renter, or participant. The occupant, purchaser, [or] renter, or participant shall pay the tax to the operator. If the tax is included in the price of the meal, occupancy, [or] gross rental receipts received, or admission charges, upon request the operator shall state to the purchaser, occupant, [or] renter, or participant the amount of the tax.

8 Meals and Rooms Tax; Collection of Tax. Amend RSA 78-A:7, IV to read as follows:

IV. In lieu of keeping detailed records of taxes collected, and in lieu of payment of the taxes collected under this chapter, an operator may, in writing, elect to compute the amount of taxes due at [8] the percent tax rate specified under RSA 78-A:6 of the total taxable rent, charge for meals, [or] gross rental receipts received, or admission charges received by it, or both, exclusive of the taxes collected on such rents, charges, and gross rental receipts, and admission charges. If this election is made, the operator may not change the method of computing taxes without the written consent of the department. Any balance of the tax remaining in possession of the operator may be retained by it.

9 Meals and Rooms Tax; Distribution of Revenue. Amend RSA 78-A:26, III to read as follows:

III. Beginning on July 1, 1999, and for each fiscal year thereafter, the department shall pay over all revenue collected pursuant to RSA 78-A:6, II-a and II-c to the state treasurer for deposit in the education trust fund established by RSA 198:39.

10 New Subdivision; Gambling Tax. Amend RSA 284 by inserting after section 21-v the following new subdivision:

Gambling Tax to Fund Education

284:21-w Tax Imposed on Gambling Winnings.

I. For purposes of this subdivision, “gambling winnings” means any money distributions to winners of bingo and lucky 7 games, sweepstakes, and pari-mutuel activities in the state of New Hampshire. It shall not include winnings of a free ticket.

II.(a) A supplemental tax shall be imposed at the rate of 5 percent upon all gambling winnings, except that the first $100 of such winnings to a single individual from a single game, race, or ticket purchase shall be exempt from taxation under this subdivision.

(b) Each payor shall keep books and records in a form acceptable to the department of revenue administration showing the amount of all taxes due. The payor shall withhold such amount from the distribution to the winner. The payor shall pay the amount withheld over to the state as provided in subparagraph (c).

(c) Within 10 days after the end of each month, an amount equal to the taxes withheld shall be remitted to the department of revenue administration to be deposited by the state treasurer in the education trust fund.

III. The commissioner of the department of revenue administration shall adopt rules, under RSA 541-A, relative to carrying out the purposes of this subdivision.

11 Repeal. RSA 284:21-r, relative to the tax exempt status of sweepstakes winnings, is repealed.

12 Tobacco Tax; Definition of Tobacco Products. Amend RSA 78:1, XIV as follows:

XIV. “Tobacco products” means cigarettes, cigars, snuff, loose tobacco, [and] smokeless tobacco, products containing tobacco, and tobacco in any other form.

13 Tobacco Tax Imposed. Amend RSA 78:7 to read as follows:

78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of $.80 for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all [cigarettes] tobacco products sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the [cigarettes] tobacco products in which such products usually are sold at retail. The word “package” as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.

14 Repeal. RSA 78:7-c, relative to tax imposed on tobacco products other than cigarettes, is repealed.

15 Applicability. Sections 12 – 14 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective July 1, 2007, shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J.

16 Tax on Beer. Amend RSA 178:28, I to read as follows:

I. In addition to the annual license fees provided in this chapter, a fee of [$.30 for each gallon] 5 percent of the wholesale value per 12 ounces of beverage sold or transferred for retail sale or to the public shall be required for licenses issued to wholesale distributors, beverage manufacturers, and brew pubs; provided, however, that if beverage container mandatory deposit legislation is enacted, such fee shall be [$.18 per gallon] 2.5 percent of the wholesale value per 12 ounces as of the effective date of such legislation. For failure to pay any part of the fees provided or under this section when due, 10 percent of such fees shall be added and collected by the commission from the licensee.

17 Beer Festival Licenses; Tax on Beer. Amend RSA 178:30, V to read as follows:

V. Beverages registered with the commission under paragraph IV shall be purchased by the holder of the license. Additionally, fees of [$.30 per gallon] 5 percent of the wholesale value per 12 ounces of beverages or specialty beer purchased under this paragraph shall be paid to the commission by the licensee within 10 business days of the expiration of the license. Payment shall be accompanied by any forms and documentation required by the commission.

18 New Chapter; Estate Tax. Amend RSA by inserting after chapter 86 the following new chapter:

CHAPTER 86-A

ESTATE TAX

86-A:1 Definitions. In this chapter:

I. “Commissioner” means the commissioner of revenue administration.

II. “Department” means the department of revenue administration.

III. “Decedent’s adopted child or children” means the individuals who were taken into the decedent’s family before reaching the age of majority through a state statutory process where the decedent assumed all the parental duties of a natural parent and the rights and duties existing between the individual and the natural parents were permanently terminated.

IV. “Estate” means the probate and non-probate assets of a decedent.

V. “Gross estate” means the total property or that portion of the total property owned by the decedent or which the decedent had an interest in at the time of death before any deductions are taken into account, whether such property is real or personal, tangible or intangible, wherever located.

86-A:2 Books; Blanks. The department shall provides the judges and registers of probate of the state with such forms and documents as are requisite for the execution of this chapter and RSA 87.

86-A:3 Expenses. The expenses of the execution of said chapter shall be paid by the state treasurer upon the certification of the department and charged to the appropriations for the department and the bills therefor shall be submitted to the governor and council for their approval.

86-A:4 Disposal of Records. Whenever in the opinion of the department any books, records or papers more than 6 years old are no longer required, the department may destroy or cause such records to be destroyed.

86-A:5 Rebuttable Presumption. Every deed, grant or completed gift, except in case of a bona fide transfer for reasonable consideration in money or money’s worth, made within 2 years prior to the death of the grantor or donor, shall, prima facie, be deemed to have been made in contemplation of the death of the grantor or donor.

86-A:6 Taxable Property and Tax Rate.

I. All property within the jurisdiction of the state, real or personal, and any interest therein, belonging to domiciliaries of the state; and all real estate within the state, or any interest therein, belonging to persons who are not domiciliaries of the state; which shall pass by will, or by the laws regulating intestate successions, or by deed, grant, bargain, sale or gift, made in contemplation of death, or made or intended to take effect in possession or enjoyment at or after the death of the grantor or donor, to any person, absolutely or in trust, shall be subject to a tax of 18 percent or its fair market value for the use of the state except as provided in paragraphs II-V and RSA 86-A:9.

II. The first $3,000,000 of the decedent’s estate shall be exempt from the tax imposed under paragraph I.

III. Any real property which passes to any of the persons listed in paragraph IV, where the real property is a working farm or used for agricultural operations and is not sold or transferred to nay person not listed in paragraph IV for at least 5 years following the death of the grantor or donor, shall be exempt from the tax imposed under paragraph I.

IV. Real and personal property of the decedent shall be exempt from the tax imposed in paragraph I, if it passes to or for the use of any of the following:

(a) The decedent’s spouse;

(b) The decedent’s lineal ascendants and the decedent’s lineal descendants together with the spouses of said ascendants and descendants, provided that such ascendants and descendants have not been adopted by another person;

(c) The decedent’s adopted children together with the spouses and lineal descendant of such adopted children;

(d) The care of cemetery lots in this state;

(e) A city or town in this state for public municipal purposes;

(f) Educational, religious, cemetery, or other institutions societies, or associations of public charity in this state, or in any other state, territory, or country, the laws of which at the time of the death of the decedent provide either of the following:

(1) Do not impose a transfer or death tax of any kind;

(2) Grant an exemption similar to that provided for in this paragraph, to their domiciliaries, for the property passing to charities in this state.

(g) A person who for 10 consecutive years prior to the person’s fifteenth birthday was a member of the household of the decedent.

(h) The decedent’s stepchildren of the current marriage or of the most recent marriage together with the spouses and the lineal descendants of such stepchildren.

V. The decedent’s share of or interest in a homestead which, for a period_. of at least one year immediately preceding the date of death of the decedent, was owned in whole or in part by the. decedent as the last and usual place of residence provided that the homestead was occupied as the primary residence of one ,or more of the decedent’s siblings, but not necessarily by the decedent at the time of the decedent’s death, shall be exempt from the tax imposed in paragraph I to the extent that the interest in the homestead passes to or for the use of those siblings occupying the homestead on the date of the decedent’s death.

86-A:7 Joint Ownership. Whenever property, real or personal, is held in the joint names of 2 or more persons or is deposited in banks or other depositaries in the joint names of 2 or more persons and payable to either or the survivor, upon the death of one of such persons, the right of the survivor to the immediate ownership of such property shall be deemed a transfer taxable under this chapter. The transfer shall be in the same manner as though the whole property to which such transfer relates was owned by said parties as tenants in common and had been devised or bequeathed to the survivor by such deceased joint owner. The survivor shall file with the executor or administrator upon a form prescribed by the department, a report of all transfers of real and personal property held in the joint names of the deceased joint tenant and the survivor and shall notify the executor or administrator as to the amounts paid by such survive or from said property for necessary expenses of the funeral of the deceased joint tenant, expenses of the last sickness, and medical expenses of the deceased joint tenant. In the computation of the tax under this chapter there shall be deducted from the value of the property so reported such amounts as were paid from said property for such funeral expenses, expenses of last sickness, and medical expenses. In addition, a joint account with less than $10,000 shall not be deemed a transfer taxable under this chapter, provided there is no other joint property or probate asset within the estate. The surviving joint tenant shall remit the appropriate tax liability to the executor or administrator, or if the estate is liable for the tax, the executor or administrator shall pay the tax liability from the assets being held by the executor or administrator. The executor or administrator shall incorporate the value of the joint assets and the tax liability into the legacy and succession tax return required under this chapter.

86-A:8 Measure of Shares. To the extent that such joint account or property is acquired by the use of the funds of the persons to whom it is payable, or by whom it is held, the value of the separate interest of each for the purposes of this chapter shall be measured by his or her proportionate contribution to the fund or to the purchase price of the property.

86-A:9 Credit for Tax Paid on Prior Transfers Between Siblings.

I. The tax payable under RSA 86-A:5 or RSA 86-A:7 on property passing from a decedent, which has previously been subject to the tax because of a prior transfer by one sibling to another, shall be credited with all or part of the tax paid on a prior transfer if the siblings died within 10 years of each other.

II. The amount of credit shall be as follows:

(a) If the sibling died within 2 years of the prior decedent’s death, 100 percent;

(b) If within the third or fourth year, 80 percent;

(c) If within the fifth or sixth year, 60 percent;

(d) If within the seventh or eighth year, 40 percent;

(e) If within the ninth or tenth year, 20 percent.

III. The surviving sibling applying for a credit under this section shall file with the department, upon a form prescribed by it, a report of all prior transfers by one sibling to another which were previously subject to tax under RSA 86-A:5 or RSA 86-A:7 and shall satisfy the department as to the amount of tax previously paid on such transfers.

86-A:10 Each Taxable. When any interest in property less than an estate in fee shall pass by will or otherwise, as set forth in RSA 86-A:5, to one or more beneficiaries, with remainder to others, the several interests of such beneficiaries, except as they may be entitled to exemption under the foregoing provisions, shall be subject to said tax.

86-A:11 Life Interest; Remainder. The value of an annuity or life estate, any intermediate estate and any remainder interest shall be determined in accordance with the applicable United States Internal Revenue Service regulations and tables in effect at the time of the death of the decedent.

86-A:12 Contingent Interest. Whenever such intermediate estate or remainder is conditioned upon the happening of a contingency, or dependent upon the exercise of a discretion, so that the value of either cannot be determined by the tables as hereinbefore provided, the value of the property which is the subject of the bequest shall be determined as provided in RSA 86-A:24, RSA 86-A:37, and RSA 86-A:38 and, such value having thus been ascertained, the department shall, upon such evidence as may be furnished by the will and the executor’s statement or by the beneficiaries or otherwise, determine the value of the interests of the several beneficiaries, and the values thus determined shall be deemed to be the values of such several interests for the purpose of the assessment of the tax, except insofar as they shall be changed upon appeal.

86-A:13 Identity Conditional. Whenever the identity of the beneficiary who is to take such a remainder is conditioned upon the happening of a contingency, or is dependent upon the exercise of a discretion, the department shall assess and collect the tax upon such remainder at the highest amount, which, on the happening of any of the said contingencies or conditions, or by the exercise of such discretion, would be possible under the provisions of RSA 86-A:5.

86-A:14 Abatement for Exempt Remainders. If at the termination of the intermediate estate such remainder or any portion thereof shall pass to a person or corporation which at the time of the death of the decedent was exempt from such tax, such person or corporation may, at any time within one year after the termination of the intermediate estate, but not afterwards, apply to the department for an abatement of the tax on such remainder, and the state treasurer upon the certification of the department shall repay the amount adjudged to have been overpaid, with interest thereon as determined in accordance with RSA 21-J:28. Whenever a tax shall hereafter be collected under the provisions of RSA 86:13 and 15 in a case where the intermediate estate shall pass to a husband or wife with the right to use or expend such portions of the principal as may be necessary for the surviving spouse’s reasonable support and maintenance and the principal shall prove to be insufficient for that purpose, and the surviving spouse is without other means of support, then such spouse may apply to the department for an abatement of the entire tax on such remainder, and upon such abatement the state treasurer upon the certification of the department shall repay the amount so collected with interest as determined in accordance with RSA 21-J:28.

86-A:15 Bequests as Compensation. If a testator gives, bequeaths, or devises to the testator’s executors or trustees any property otherwise liable to said tax, in lieu of their compensation, the value thereof in excess of reasonable compensation, as determined by the department, shall nevertheless be subject to the provisions of this chapter.

Lists of Heirs, Inventories, Accounts

86-A:16 Lists of Heirs, etc. Every administrator shall prepare a statement in duplicate, showing as far as can be ascertained the names of all the heirs-at-law, and every executor shall prepare a like statement showing the names of all legatees named in the will or entitled to take thereunder, and stating whether or not the same were living at the time of the decedent’s death, and shall file the same with the register of probate at the time of his appointment.

86-A:17 Relationship, Age. Such statements shall also show the relationship to the decedent of all heirs-at-law or legatees, and the age at the time of the death of the decedent, of all legatees to whom property is bequeathed or devised for life or for a term of years, or subject to a contingency or the exercise of discretion.

86-A:18 Prerequisite to Administration. Letters of administration shall not be issued to any executor or administrator until he or she has filed such statement in duplicate and has given bond to the judge of probate with sufficient sureties containing, in addition to the other conditions required by law, a condition in terms that he or she shall “pay all taxes for which he may be or become liable under the provisions of chapters 86-A of the Revised Statutes Annotated, and comply with all the provisions of said chapter.”

86-A:19 Inventory; Appraisal. An inventory and appraisal under oath of the whole of every estate, any part of which may be subject to a tax hereunder, in the form prescribed by the probate court, shall be filed in probate court by the executor, administrator, or trustee within 3 months after appointment and a copy of such inventory shall be provided to the department by the executor, administrator, or trustee at such time.

86-A:20 Report of Gifts and Transfers, Joint Tenancies, and Crusts.

I. Except as provided in paragraph II, every executor and administrator shall, within 6 months from the date of the decedent’s death or within 6 months of when the petition for administration is filed with the probate court, whichever is later, file with the appropriate register of probate and with the department, upon a form prescribed by the department, a report of the following:

(a) A report of all transfers of real and personal property, except bona fide sales at an arms-length price and transfers of under $1,000, made by the decedent within 2 years prior to the date of death or transfers to take effect in possession or

enjoyment at or after death including transfers of property through partnership agreements or other agreement between the decedent and one or more other persons.

(b) A report of all real and personal property held in joint tenancy by the decedent at the time of the decedent’s death, and the names, addresses, and the relationship, if known, to the decedent of the surviving joint tenants.

II. A report pursuant to paragraphs I, III, and IV of this section shall describe the location and title reference of real property and need not state the nature or amount of personal property in the case of any transfers of real or personal property or joint tenancies in which all transferees or surviving joint tenants are exempt under RSA 86-A:6, IV(a), (b), (c), or (h).

III. Except as provided in paragraph II and within 6 months of the decedent’s death, every executor, administrator, trustee, fiduciary, or custodian having knowledge of the existence of a trust funded either prior to or as a result of the decedent’s death in whole or in part with property of a decedent and’ which transfers a beneficial interest in property of the decedent to another effectively in the same manner as a will or other testamentary instrument shall notify the department of its existence and provide a copy of such trust document, including any schedule of beneficiaries, to the department.

IV. Except as provided in paragraph II and within 6 months of a ‘decedent’s death, every executor, administrator, trustee, fiduciary, or custodian having knowledge of the transfer of any property, whether real or personal, by operation of law as a result of the decedent’s death shall notify the department of such transfer, unless reported under paragraph I or III, providing the name of the transferee, the relationship of the transferee to the decedent, and the nature and fair market value of the property.

86-A:21 Penalty. If an executor, administrator, trustee, fiduciary, or custodian neglects or refuses to comply with any of the requirements of RSA 86-A:16 – RSA 86-A:20, such person shall be liable to a penalty of not more than $1,000, to be recovered by the department for the use of the state, and, upon petition by the department, notice and hearing, the probate court may remove such person, and appoint another person administrator with the will annexed, or administrator, as the case may be.

86-A:22 Notifying Department of Revenue Administration. The register of probate shall notify the department, within 30 days after the expiration of said 3 months, of the failure of any executor, administrator or trustee to file such inventory and appraisal in his or her office.

86-A:23 Copies to Department of Revenue Administration. The register of probate shall send to the department, by mail, one copy of every statement filed with him or her by executors and administrators as provided in RSA 86-A:16 and RSA 86-A:17, a copy of every will containing legacies which are subject to a tax hereunder, and a copy of the inventory and appraisal of every estate any part of which may be subject to such a tax, within 30 days after it is filed, and a copy of every account of an executor or administrator of such an estate within 7 days after it is filed, unless notified by the department that such copies will not be required. The register of probate shall also furnish such copies of papers, and such information as to the records and files in his office, in such form as the department may require. A refusal or neglect by the register so to send such copies or to furnish such information shall be a breach of his or her official bond.

86-A:24 Special Appraisal. If an executor or administrator shall fail to file an inventory and appraisal in the probate court as provided in RSA 86-A:19, or if the department is not satisfied with the inventory and appraisal which is filed, the department may employ a suitable person to appraise the property and the executor or administrator shall show the property of the decedent to such appraiser upon demand, and shall make and subscribe his or her oath that the property thus shown includes all the property of the decedent that has come to his knowledge or possession. Such appraiser shall prepare an inventory of said property, and shall appraise it at its actual market value at the time of the decedent’s death, and shall return such inventory and appraisal to the department.

86-A:25 Expense of. The expense of such appraisal shall be a charge upon the estate of the decedent, as an expense of administration, in all cases where an inventory and appraisal has not been filed as provided in RSA 86-A:19; otherwise the expense shall be paid by the state treasurer.

86-A:26 Penalty for Failure to Cooperate. An executor or administrator who shall neglect or refuse to show the property of the decedent to such appraiser upon demand, or to make and subscribe such oath, shall be liable to the penalty provided in RSA 86-A:21.

86-A:27 Notice of Real Estate Passing. If real estate of a decedent so passes to another person as to become subject to said tax his or her executor, administrator, or trustee shall inform the department thereof within 6 months after his or her appointment, or, if the fact is not known to him or her within that time, then within one month after the fact becomes known to him or her.

86-A:28 Conditions of Allowance of Account or Motion for Summary Administration. No final account or motion for summary administration of an executor, administrator, or trustee shall be allowed by the probate court until the certificate of the department of revenue administration has been filed in said court, stating that all tax returns required by the provisions of this chapter have been filed and that the amounts of self-assessed taxes have been paid, and that provision has been made for any taxes which may become due on said property or interest, or that the payment thereof to the state is assumed by the legatee receiving such property or interest secured by deposit, or by lien on real estate.

86-A:29 Certificate and Receipt. A certificate from the department verifying that the required returns have been filed and the amount of the self-assessed tax reported has been paid may be requested by the executor, administrator, legatee, the register of probate, or the judge of the probate court having jurisdiction over the estate.

86-A:30 Continuance of Account. Whenever a final account is otherwise in order for allowance by the court, but the certificate of the department, as provided in RSA 86-A:29, is not produced or on file in the probate court, the account shall be continued by the judge of probate until the certificate of the department is filed with the court.

86-A:31 Real Estate of Nonresident. When real estate within the state, or any interest therein, belonging to a person who is not domiciled in the state, shall pass by will or otherwise so that it may be subject to tax under the provisions hereof, and an executor or administrator of the estate of said decedent is appointed by a probate court of this state upon ancillary proceedings, or otherwise, such executor or administrator shall, for the purposes of this chapter, have the same powers, and be subject to the same duties and liabilities with reference to such real estate, as though the decedent had been a domiciliary of this state.

86-A:32 Appointment of Administrator. If, upon the decease of a person leaving an estate liable to a tax under the provisions of this chapter, a will disposing of such estate is not offered for probate, or an application for administration is not made within 4 months after such decease, the probate court, upon application by the department, shall appoint an administrator.

86-A:33 Expenses of Administration. Whenever an administrator shall be so appointed the expenses of such administration, including the reasonable compensation of the administrator and the expenses of such litigation as the administrator may undertake upon the request or with the approval of the department to obtain title to or possession of property subject to tax, under the provisions of this chapter, or to recover such taxes from persons liable therefor, may be paid by the state treasurer upon the certification of the department and the governor is hereby authorized to draw a warrant against any money in the treasury not otherwise appropriated for the payment of such expenses.

86-A:34 Repayment. All sums thus paid shall be a charge upon any property of the estate which may come into the hands of the administrator, and shall be repaid to the state treasurer from such property or the proceeds thereof.

86-A:35 Liability of Administrator. The personal liability of such administrator for the payment of such taxes shall be limited to such taxes as he or she may, by the exercise of reasonable diligence, recover from property of the estate, or from persons liable therefor.

Assessment and Abatement of Tax

86-A:36 Determination of Amount. The executor or administrator shall compute the amount of all taxes due and payable under the provisions of this chapter, and shall prepare and submit the required returns to the department.

86-A:37 Basis of Assessment.

I. Except as provided in paragraph II, said tax shall be assessed upon the fair market value of the property at the time of decedent’s death or the alternate valuation as determined by section 2032 of the United States Internal Revenue Code of 1986 as amended, and gains or losses on sales made afterward for any purpose shall be disregarded.

II. In instances in which the decedent’s will requires the sale of property or where such sale is required to pay the enforceable claims against the decedent, the value of such property shall be the fair market value of the property at the time of sale.

86-A:38 Subsequent Appraisal. Upon the application of any party interested in the succession, or of the executor, administrator, or trustee, made at any time within 3 months after notice of such determination, the probate court shall appoint 3 disinterested appraisers, or, with the consent of the department, one disinterested appraiser, who, first being sworn, shall appraise such property at its fair market value as of the date of the death of the decedent, and shall make return thereof to said court.

86-A:39 Fees of Appraisers. The fees of said appraisers, as determined by said court, shall be paid by the party requesting the subsequent appraisal and, if such party is the department, by the state treasurer from funds not otherwise appropriated upon the certification of the department.

86-A:40 Deductions.

I. In the computation of said taxes the executor, administrator, trustee, or legatee may deduct the following from the assets of the gross estate or the trust provided such deductions were legal obligations of the estate or trust and paid from or payable from such assets and were not deductible under RSA 86-A:7:

(a) All debts owed by the decedent at the date of death.

(b) Funeral and burial expenses not covered by a prepaid mortuary trust account.

(c) Expenses of the last illness which are not payable by insurance or other medical reimbursement plans.

(d) Expenses required to maintain property of the decedent provided the property is assessed under the provisions of RSA 86-A:37, II.

(e) Reasonable compensation paid to an executor or administrator for personal services in the administration of the estate.

(f) Reasonable compensation paid to a trustee of a trust the assets of which become subject to taxation under this chapter for services actually performed by the trustee that are comparable to those services performed by an executor or administrator in the administration of an estate.

(g) Federal or state estate taxes other than New Hampshire assessed and paid by the estate.

(h) In the event that the decedent’s will provides that all taxes be paid from the estate, the payment of inheritance taxes by the estate will be presumed to be made from the residuary in which case a deduction will be allowed against the residuary for all legacy and succession taxes on all other bequests with the exception of taxes on the residuary and the taxes assessed under this chapter on the assets of a trust. However, if non-New Hampshire real estate is sold the taxes imposed by the state where the real estate is located shall be a reduction of the proceeds of such sale and not a deduction against the New Hampshire estate under this section.

(i) In the event that the trust agreement provides that all, taxes be paid from the trust, the payment of inheritance taxes by the trust will be presumed to be made from the residuary in which case a deduction will be allowed against the residuary for all legacy and succession taxes on all other trust bequests with the exception of the residuary, except for the taxes assessed, under this chapter on the assets of the probate estate. However, if non-New Hampshire real estate is sold the taxes imposed by the state where the real estate is located shall be a reduction of the proceeds of such sale and not a deduction against the New Hampshire trust under this section.

(j) Taxes and preparation fees for all federal and state tax returns for all tax years up to and including the year of death.

(k) Expenses of administration provided such expenses are essential for the proper settlement of the estate and not: incurred for the benefit of the heirs, legatees, or devisees. Administration expenses include, but are not limited to, cost of fiduciary bond, postage, required notices, certified copies of wills, fees for recording instruments, appraisal fees, and legal fees unless such fees are incurred for the specific benefit of the legatees, heirs, or devisees.

II. In the computation of this tax on the residuary probate or trust estate it shall be calculated on the balance of the residuary after subtracting the deductions provided in paragraph I.

86-A:41 Claims for Care. The amount due upon the claim of any legatee named in the will, or of any person who is, or, in the absence of a will, would be an heir-at-law of a deceased person, arising under a contract for board, lodging, support, maintenance or personal care and attention, covering a period of more than 6 months, shall be subject to the same tax imposed by this chapter upon a legacy or succession of like amount, except to the extent that such claim is evidenced by a writing signed by the decedent containing an agreement for payment at some specified time or times within the decedent’s lifetime.

Settlement Without Local Administration

86-A:42 Estate of Nonresident.

I. In the absence of administration in this state, the department may, at the request of an executor or administrator duly appointed and qualified in the state of the decedent’s domicile, or of a grantee, or donee under a conveyance made during the grantor’s lifetime, and upon satisfactory evidence furnished it by such executor, administrator, grantee, donee, or otherwise, determine whether or not any real estate of said decedent within this state is subject to tax under the provisions of this chapter, and if so may determine the amount of such tax and adjust the same with such executor, administrator, grantee, or donee and for that purpose may appoint an appraiser to appraise said property as provided in RSA 86-A:24; and the expense of such appraisal shall be a charge upon the real estate in addition to the tax.

II. The executor, administrator, grantee, or donee shall be required to prepare and file all forms required by this chapter with the department. The information required by RSA 86-A:16 – RSA 86-A:20 shall relate only to the real property located in New Hampshire.

86-A:43 Certificate and Receipt. A certificate from the department verifying that the required returns have been filed and that the amount of the self-assessed tax reported has been paid may be requested by the executor, administrator, grantee, or donee and may be filed in the probate office in the county where the real estate is located, and when so filed shall be conclusive evidence of the filing of the required return and payment of the self-assessed tax.

86-A:44 Overdue Tax. Whenever in such a case the tax return is not filed within 9 months after the death of the decedent, the probate court, upon application of the department, shall appoint an administrator as provided in RSA 86-A:32.

Payment and Collection of Tax

86-A:45 When Payable. All taxes imposed by the provisions of this chapter, including taxes on intermediate estates, and remainders, shall be due and payable to the department 9 months after date of the decedent’s death.

86-A:46 Suspension of Payment. If the probate court has ordered the executor or administrator to retain funds to satisfy a claim of a creditor, the payment of the tax may be suspended by the court to await the disposition of such claim.

86-A:47 Interest. If the taxes are not paid when due, interest shall be paid as prescribed in RSA 21-J:28.

86-A:48 Liability. Administrators, executors, trustees, grantees, and donees under a conveyance made during the grantor’s life and taxable here under, shall be liable for such taxes, with interest, until the same have been paid.

86-A:49 Lien. Said taxes and interest shall be a lien on the property subject to the taxes until the same are paid; however, commencing with the date of decedent’s death there shall be a 20-year statute of limitations for said lien.

86-A:50 Discharge of Lien. Whenever any real estate or separate parcel thereof is subject to a lien created by this chapter, the probate court shall have jurisdiction to make such order or decree as will otherwise secure to the state the payment of any tax due, or to become due, on such real estate or separate parcel thereof, and, upon the performance of such order or decree, to discharge such lien.

86-A:51 Collection. An executor, administrator, trustee, grantee or donee holding property subject to said tax shall deduct the tax therefrom, or collect it from the legatee or person entitled to-said property, and he shall not deliver property or a specific legacy subject to said tax until he has collected the tax thereon.

86-A:52 Sale of Personal Property. When a specific bequest of personal property other than money is subject to a tax hereunder, and the legatee neglects or refuses to pay the tax upon demand, the executor or trustee may, upon such notice as the probate court may direct, be authorized to sell such property, or, if the same can be divided, such portion thereof as may be necessary, and shall deduct the tax from the proceeds of such sale, and shall account to the legatee for the balance, if any, of such proceeds, in lieu of the property.

86-A:53 Sale of Real Estate. An executor or administrator shall collect taxes, due upon the land which is subject to tax under the provisions hereof, from the heirs or devisees entitled thereto, and he may be authorized to sell said land according to the provisions of RSA 86-A:57 if they refuse or neglect to pay said tax.

86-A:54 Property Out of the State. When a conveyance made by a decedent in his lifetime is subject to said tax, and the property thus conveyed, being personal property, is without the state, or is removed from the state before the tax is paid, such tax shall become a lien upon all property of the decedent, and shall be chargeable as an expense of administration; and the executor or administrator shall collect taxes due on account of such conveyances, and may be authorized to sell any property subject to the lien of such tax for the payment thereof, as in other cases.

86-A:55 Charges Upon Land. If a legacy subject to said tax is charged upon or payable out of real estate, the heir or devisee, before paying it, shall deduct said tax therefrom and pay it to the executor, administrator or trustee, and the tax shall remain a charge upon said real estate until it is paid. Payment thereof may be enforced by the executor, administrator, or trustee in the same manner as the payment of the legacy itself could be enforced.

86-A:56 Less Than Fee. When any interest in property less than an estate in fee is devised or bequeathed to one or more beneficiaries with remainder to others, and the interest of one or more of the beneficiaries is subject to said tax, the executor shall deduct the tax upon such taxable interests from the whole property thus devised or bequeathed, and whenever property other than money is so devised or bequeathed he or she may, unless the taxes upon all the taxable interests are paid when due by the beneficiaries, be authorized to sell such property, or such portion thereof as may be necessary, as provided in RSA 86-A:52 and RSA 86-A:57, and, having deducted the unpaid taxes on such taxable interests from the proceeds of such sale, he or she shall account for the balance in lieu of the property sold as in other cases.

86-A:57 Authority to Sell Real Estate. The probate court may authorize executors, administrators, and trustees to sell the real estate of a decedent for the payment of said tax, in the same manner as it may authorize them to sell real estate for the payment of debts.

86-A:58 Suit for Tax. The department may commence an action for the recovery of any of said taxes at any time after’ the same become payable; and shall do so whenever the judge of probate certifies to it that the final account of an executor, administrator, or trustee has been filed in such court, and that the settlement of the estate is delayed because of the nonpayment of said tax.

86-A:59 Extension of Time.

I. The probate court shall so certify upon the application of any heir, legatee, or other person interested therein, and may extend the time of payment of said tax whenever the circumstances of the case require.

II. Except as provided in paragraph III, interest, as prescribed in RSA 86-A:47, shall apply on the tax due throughout the term of an extension of time for payment of the tax granted pursuant to this section.

III. Any heir, legatee, or other interested person, who has been granted an extension of time for payment of the tax under paragraph I, may apply to the commissioner for a waiver of the interest applied under paragraph II. The commissioner may grant such waiver, for good cause shown.

Adjustment of Tax by Compromise

86-A:60 Who May Adjust. In every case where there shall be a devise, descent, or bequest liable to a tax under the provisions of this chapter, conditioned upon the happening of a contingency or dependent upon the exercise of a discretion, or where the right of the department to recover the tax is in question, or where it deems it advisable, such department may effect such settlement of the tax as it may deem to be for the best interests of the state, and the payment of the sum so agreed upon shall be a full satisfaction of such tax.

86-A:61 Tax on Interest of Unascertained Appointees, etc. In all cases of a bequest or devise of property for life or for a term of years, which gives to the tenant for life or term of years the power of appointing by deed or will, or both, the further disposition of such property or any part thereof, the department may effect such settlement of the tax on the interest of any unascertained appointees under such power, or any unascertained person who may take in default of appointment under such power, as it shall deem to be for the best interests of the state; and payment of the sum so agreed upon shall be a full satisfaction of such tax.

86-A:62 Dispute as to Domicile. Where the department claims that a decedent was domiciled in this state at the time of death and the taxing authorities of another state or states make a similar claim with respect to their state or states, such department may enter into a written agreement with such taxing officials and with the executor or administrator that a certain sum shall be accepted in full payment of the tax, together with interest and penalties, imposed by this chapter, provided that said agreement also fixes the amount to be paid to such other state or states in full payment of death taxes thereof. Full power and authority is hereby conferred upon the executor or administrator to enter into the agreement provided for herein. Upon the filing of such agreement or duplicate thereof with the probate court which would have jurisdiction over the estate if said decedent had died domiciled in this state, an order fixing the tax shall be made in accordance with such agreement, and such order shall finally and conclusively fix and determine the amount of tax imposed by this chapter.

Duties of Depositaries and Corporations

86-A:63 Deposit Boxes.

I. No person or corporation engaged in the business of renting or furnishing safety deposit boxes to its customers or others, for the safekeeping of securities or other papers may, except as provided in paragraph II, without the consent in writing of the department, permit any person, except an executor or administrator duly appointed and qualified in this state, to remove any of the contents of any such safety deposit box after knowledge of the decease of any person having the right of access to the same, whether such deceased person was a resident of this state or not, except the will, if any, of the deceased which may be delivered to the executor named therein.

II. If a safety deposit box is rented under either of the following arrangements:

(a) To 2 persons jointly, with separate right of access to either or the survivor, and one of the joint renters dies; or

(b) To a single renter, and such renter appoints a deputy on the records of the lessor by written power of attorney expressly providing that the deputy shall have a continued right of access to the box notwithstanding the death of the renter, and the renter dies survived by such deputy; and if the surviving joint renter or surviving deputy, as the case may be, is the spouse or a parent or natural or adopted child or grandchild or brother or sister of the decedent, the written consent of the department of revenue administration shall not be required for the removal, in whole or in part, of the contents of such safety deposit box by such surviving joint renter or surviving deputy. Nothing herein contained shall be construed to create a joint tenancy in or otherwise establish ownership in any of the contents of such safety deposit box.

86-A:64 Transfers of Stock or Other Assets. No corporation organized and existing under the laws of this state shall transfer on its books, or issue a new certificate for, any share or shares of its capital stock standing in the name of a decedent, or in trust for a decedent or belonging to or standing in the joint names of a decedent and one or more persons, and no safe deposit company, trust company, corporation, bank or other institution, person or persons having in possession, or under control or custody or partial custody, securities, deposits, assets, or property belonging to or standing in the joint names of such a decedent and one or more persons, or which was received from the decedent for delivery to any other person, or is marked or designated for such delivery, including the shares of capital stock of, or other interest in, said safe deposit company, trust company, corporation, bank or other institution shall, except as hereinafter provided, deliver or transfer the same to any person except a duly appointed executor or administrator of the estate of the decedent without the written consent of the department of revenue administration. However, when the grantee, donee, beneficiary, and surviving joint tenant or tenants all stand in relation to the decedent as persons who, under the provisions of RSA 86-A:6, IV are exempt from the tax imposed by this chapter, such prior written consent shall not be required for the delivery or transfer by such safe deposit company, trust company, corporation, bank or other institution of:

I. Any kind of security, deposit, asset, or property which was received from the decedent for delivery to any other person, or is marked or designated for such delivery; or

II. Any kind of account, deposit, security, asset or property standing in the joint names of 2 or more persons and payable to either or to the survivor upon death of one of such persons.

86-A:65 Notification of Department. Every person or corporation having the custody or control of such property shall, within 10 days after receiving knowledge of the death of the owner or holder of title, notify the department and whenever possible prepare and transmit to the department an itemized schedule of the property. Joint accounts or deposits for transfer or delivery of which the prior written consent of the department is not required under RSA 86-A:63 and RSA 86-A:64 need not be reported to the department under this section.

86-A:66 Examination. Upon receipt of such notice, the department or other representative may examine such securities, deposits, assets, or the records of such safe deposit company, trust company, corporation, bank or other institution or person, relative thereto, and shall as soon as possible notify the holder of the property whether or not a tax will be claimed upon its transfer, and may by an instrument in writing consent to the immediate transfer of such property if, in its judgment, the transfer is not subject to tax.

86-A:67 Delivery of Property to Personal Representative. If a tax is claimed by the department under the provisions of this chapter the property shall be delivered to the resident executor or administrator of the deceased, or held until the tax has been assessed and paid, as the circumstances of the case may require, unless the claim is overruled by the court in appropriate proceedings.

86-A:68 Joint Deposits. Savings banks, trust companies and all other similar institutions shall, when receiving deposits in more than one name, ascertain and record the place of domicile of the parties, and shall, upon request of the department furnish it with a list of all such deposits, together with the names and addresses of the depositors, and such other information as it may require and the institution is able to furnish.

86-A:69 Penalty. Whoever violates the provisions of RSA 86-A:63, RSA 86-A:64, RSA 86-A:65, RSA 86-A:66, RSA 86-A:67, or RSA 86-A:68 shall be guilty of a misdemeanor if a natural person, or guilty of a felony if any other person, and, in addition thereto, shall be liable for the amount of the taxes, interest and penalties due under this chapter upon the passing or transfer of said securities, deposits or other property; and said penalties and liabilities may be enforced in an action brought by the department. In cases of failure to comply with RSA 86-A:63, RSA 86-A:64, and RSA 86-A:67 involving the delivery or transfer of joint accounts or deposits by any such trust company, bank or other similar institution, the said penalty shall not apply and the other liability of such institutions under this section shall not exceed the amount of the taxes and interest due under this chapter upon the passing or transfer of such joint accounts or deposits; and no such institution shall be deemed to have violated said sections if it shall have withheld from transfer, as provided in RSA 86-A:67, a portion of such joint account or deposit at least equal to the amount of the tax assessed thereon hereunder.

86-A:70 Application of Provisions. The provisions of RSA 86-A:64 – RSA 86-A:69 shall not apply to the transfer or registration of a transfer by a corporation, not organized under the laws of this state, of its own stock or other registered securities belonging to the estate of a nonresident, or to or upon the order or assignment of a duly appointed executor or administrator.

Investigations and Proceedings

86-A:71 Investigation. At any time after the expiration of 12 months from the date of the death of any person upon the transfer of whose estate the tax has not been determined, or upon which no tax has been paid, the department may require the executor or administrator, or any person or corporation interested in the succession, to appear at its office, at such time as it may designate, and then and there to produce for the use of the department in determining whether or not the estate is subject to said tax and the amount of such tax, if any, all books, papers or securities which may be in the possession or within the control of such executor, administrator, or beneficiary relating to such estate or tax, and to furnish such other information relating to the same as he or she may be able and the department may require.

86-A:72 Notice to Appear. Whenever the department shall desire the attendance of an executor, administrator, or beneficiary as herein provided it shall issue an administrative summons to appear, give testimony or produce documentation as provided in RSA 21-J:3 or RSA 21-J:5, to such person or corporation, 14 days prior to the date when such person or corporation is required to appear.

86-A:73 Appearance by Department. The department shall be entitled to appear and shall represent the state in any proceeding in any court in which the decree may in any way affect the tax. No decree in any such proceeding, or upon appeal therefrom, shall be binding upon the state, or upon a probate appeal, unless personal notice of such proceeding shall have been given to such department.

Nonresident Estates

86-A:74 Administration of Estates of Nonresidents. At any time before the expiration of 15 months after the qualification in any probate court in this state of any executor or administrator of the estate of any nonresident decedent such executor or administrator shall file with said court proof that all legacy and succession taxes, together with interest or penalties thereon, which are due to the state of domicile of such decedent, or to any political subdivision thereof, have been paid or secured, or that no such taxes, interest, or penalties are due, as the case may be, unless it appears that letters have been issued in the state of domicile.

86-A:75 Notification to Domiciliary State. The proof required by RSA 86-A:74 may be in the form of a certificate issued by the official or body charged with the administration of the legacy and succession tax laws of the domiciliary state but if such proof be not filed within the time limited, then the register of the probate court shall forthwith notify by mail said official or body of the domiciliary state the fact that such executor or administrator has not filed theretofore the proof required by RSA 86-A:74. Said notice shall also state, insofar as are known to said register, the name, date of death, last domicile of the decedent, and value of the property belonging to such decedent at the time of his or her death. Such register shall attach to such notice a plain copy of the will of said decedent, if any, and also a list of heirs or legatees.

86-A:76 Petition for Accounting. Within 60 days after the mailing of such notice, the official or body charged with the administration of the legacy and succession laws of the domiciliary state may file with such probate court in this state a petition for an accounting in such estate. If such petition is filed within 60 days, such probate court shall order an account to be filed and upon such account being filed and allowed shall decree the remission to the fiduciary appointed by the domiciliary probate court of the balance of the intangible personalty after the payment of creditors and expenses of administration in this state.

86-A:77 Account Not Allowed. Unless the provisions of RSA 86-A:74 – RSA 86-A:76 have been complied with no such executor or administrator shall be entitled to the allowance of his or her account or decree of distribution in this state.

86-A:78 Construction of Provisions. The provisions of RSA 86-A:74 – RSA 86-A:76 inclusive shall be liberally construed in order to insure that the state of domicile of any decedent shall receive any legacy and succession taxes, with interest and penalties thereon, due to it.

86-A:79 Application of Law. The provisions of RSA 86-A:74 – RSA 86-A:78 shall apply to the estate of any nonresident decedent, if the laws of the state or foreign country of his domicile contain a provision of any nature or however expressed whereby this state is given reasonable assurance of the collection of its legacy and succession taxes, interest, and penalties, from the estates of decedents dying domiciled in this state in cases where the estates of such decedents are being administered by the probate court of such other state, or if the state of domicile does not grant letters in nonresident estates until after letters have been issued by the state of domicile.

Administrative Duties

86-A:80 Returns.

I. The executor or administrator of the estate of every decedent whose death gives rise to a tax liability under this chapter shall within 9 months after the date of the decedent’s death file a return with the commissioner. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the form of such return and the data which it must contain for the correct computation of the legacy and succession tax. All returns shall be signed by the administrator or executor and the return preparer if other than the administrator or executor, subject to the pains and penalty of penury.

II. In those estates in which no executor or administrator has been appointed, the person who receives immediate ownership shall make and file such return. If there is more than one such person in immediate ownership, all such persons shall be jointly responsible for completing and filing one return reporting all of the assets of the estate. If there is more than one such person in immediate ownership and any such person is unable to agree on or file a joint return such person shall file an individual return with the department with a written explanation of why a joint return was not filed. The liability for the tax shall be individual and not joint.

III. For good cause, the commissioner may extend the time within which a taxpayer is required to file a return, and if such return is filed during the period of extension, no penalty for the failure to file under RSA 21-J:31 shall be imposed, but the executor or administrator shall be liable for interest as prescribed in RSA 21-J:28. An extension of time for filing a return shall not extend the time for the payment of the taxes due under this chapter. Failure to file the return within the period of the extension shall void such extension.

IV. Each executor or administrator shall report any change in the amount of the decedent’s assets, liabilities, income or expenses as finally approved by the probate court with respect to any previous returns filed under this chapter. The changes shall be reported to the commissioner by filing an amended return with the department within 90 days of the approval of such amounts by the probate court.

V. When the commissioner has reason to believe that an executor or administrator has failed to file a return or include any part of the taxable property in a filed return, the commissioner may require the executor or administrator to file a return or a supplementary return showing such additional information as the commissioner prescribes. Upon receipt of the supplementary return, or if none is received within the time set by the commissioner, the commissioner may find and assess the amount due upon the information that is available. The making of such returns by the commissioner shall not relieve the executor or administrator of any penalty for the failure to make a correct original return or relieve them from the liability for interest imposed under RSA 21-J:28 or any other additional charges imposed by the commissioner.

VI. The failure to file returns, except for good cause shown, the filing of fraudulent returns or the making, causing to be made or permitting to be made any false entry in the books or records of the estate with the intent to defraud the state or to evade the payment of the tax or any part thereof shall subject the executor or administrator to the penalties provided in RSA 21-J for such actions; provided, however, that if a person should fail to file a return within 9 months of the decedent’s death, that person may file an estimated tax payment of at least 90 percent of the total tax due and, even if the return cannot be completed, no further penalties shall accrue as of the date the estimated tax payment is made.

86-A:81 Records of the Estate. Every executor or administrator shall:

I. Keep such records as may be necessary to determine the amount of liability for tax under this chapter.

II. Preserve such records for a period of 3 years after the returns required by this chapter have been filed or until any litigation or prosecution under this chapter is finally determined, whichever is later.

III. Make such records available for inspection by the commissioner or his authorized agents, upon demand, at reasonable times during regular business hours. Whoever violates the provisions of this section shall be subject to the penalties provided in RSA 21-J for such actions.

86-A:82 Authority to Audit. The department shall have the authority to audit the returns required by this chapter to determine whether there has been an error in the assessment of the taxes imposed by this chapter in accordance with the following provisions:

I. An executor, administrator, legatee, or probate court may request in writing within 2 years of the decedent’s death an audit of the return.

II. The department may, on its own motion, undertake such an audit upon written notice to the executor, administrator, or legatee within the statute of limitations as provided in RSA 21-J:29, except that where a change is reported as provided in RSA 86-A:80, IV, such notice shall be provided within 6 months of the receipt of such amended return.

III. An executor, administrator, or legatee may request an administrative hearing pursuant to RSA 21-J:28-b, I, II, and III.

IV. Within 30 days after notice of any adjustment ordered by the commissioner as a result of an administrative hearing, an executor, administrator, or legatee may appeal -the commissioner’s determination to the probate court having jurisdiction over the decedent’s estate. The probate court shall determine de novo the correctness of the commissioner’s action.

86-A:83 Administration; Rulemaking.

I. The commissioner shall collect the taxes, interest, additions to tax and penalties imposed under this chapter and RSA 21-J.

II. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to:

(a) The administration of the tax under this chapter; and

(b) The recovery of any tax, interest or penalties imposed by this chapter and RSA 21-J.

III. The commissioner may institute actions in the name of the state to recover any tax, interest, or penalties imposed by this chapter and RSA 21-J.

IV. In the collection of the tax imposed by this chapter, the commissioner may use all of the powers granted to tax collectors under RSA 80 for the collection of taxes. The commissioner shall also have all of the duties imposed on tax collectors by RSA 80 that are applicable to him.

V. The commissioner may take the oath of any person in the course of any hearing authorized under RSA 86-A:82, III. In connection with hearings, the commissioner and the executor or administrator shall have the power to compel attendance of witnesses and the production of books, records, papers, vouchers, accounts, or other documents. The commissioner and executor or administrator may take the deposition of witnesses residing within or without the state pertaining to any matter under this chapter, in the same way as depositions of witnesses are taken in civil actions in the superior court. Fees of witnesses are the same as those allowed to witnesses in the probate court and in the case of witnesses summoned by the commissioner shall be considered as an expense of administration of this chapter.

VI. Any notice required by this chapter to be given by the commissioner to an executor or administrator shall be made by first class mail to the last known address of the executor or administrator, but in the case of hearings, notice shall be given at least 10 days before the date of the hearing.

86-A:84 Liability of Executor or Administrator. Notwithstanding any other provision to the contrary:

I. The executor or administrator shall not be responsible for the accuracy of the value submitted for property passing to a joint tenant unless the estate is responsible for the tax thereon. Any dispute as to the value of such property shall be addressed between the department and the surviving joint tenant outside of the administration of the estate.

II. At the request of the executor or administrator, the department shall collect directly any tax due on joint property and the estate shall thereby be relieved of any responsibility of collection which would otherwise result under this chapter.

III. In any probate estate with a gross value not exceeding $25,000, the executor or administrator may elect to opt out of any responsibility concerning the tax liability for property passing outside of the estate other than to report to the department any information concerning such property of which the executor or administrator may be aware. Upon written notification of such election by the executor or administrator, the department shall assume all responsibilities for the ascertainment and collection of the tax due.

Disposition of Revenue

86-A:85 Disposition of Revenue. The state treasurer shall deposit all revenues collected by the commissioner under this chapter into the education trust fund established by RSA 198:39.

19 Committee Established.

I. There is established a committee to study revisions to RSA 87 and other statutes made necessary by the adoption of section 18 of this act which establishes an estate tax.

II.(a) The members of the committee shall be as follows:

(1) Three members of the house of representatives, appointed by the speaker of the house of representatives.

(2) Three members of the senate, appointed by the president of the senate.

(b) Members of the committee shall receive mileage at the legislative rate when attending to the duties of the committee.

III. The committee shall study revisions to RSA 87 and other statutes made necessary by the adoption of section 18 of this act which establishes an estate tax. The committee shall make recommendations for legislation making these revisions to be introduced in the 2008 legislative session.

IV. The members of the study committee shall elect a chairperson from among the members. The first meeting of the committee shall be called by the first-named house member. The first meeting of the committee shall be held within 45 days of the effective date of this section. Four members of the committee shall constitute a quorum.

V. The committee shall report its findings and recommendations for proposed legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the governor, and the state library on or before November 1, 2007.

20 New Chapter; Business Payroll Tax. Amend RSA by inserting after chapter 282-A the following new chapter:

CHAPTER 282-B

BUSINESS PAYROLL TAX

282-B:1 Definitions. In this chapter:

I. “Business employer” means any enterprise, whether corporation, partnership, sole proprietorship, association, business trust, real estate trust or other form of organization, which derives economic benefit from employment of one or more persons within this state.

II. “Business payrolls” means the total value of property transferred by a business employer in remuneration for employment. In the case of a partnership or proprietorship, “business payrolls” include remuneration to the partners or to the proprietor to the extent of the deduction claimed by the partnership or proprietorship under RSA 77-A:4, III, deduction for reasonable compensation for personal services, in its previous taxable period under the business profits tax. “Business payrolls” do not include municipal, county, state, or federal payrolls.

III. “Commissioner” means the commissioner of the department of employment security.

IV. “Employment” means:

(a) Service, including service in interstate commerce, performed for remuneration or under any contract for hire, written or oral, express or implied.

(b) Service performed by an individual for remuneration, unless it is shown to the satisfaction of the commissioner that:

(1) Such individual has been and will continue to be free from the control or direction over the performance of such services, both under his or her contract of services and in fact;

(2) Such service is either outside the usual course of the business of the business employer for which such service is performed or that such service is performed outside of all the places of business of the business employer for which such service is performed; and

(3) Such individual is customarily engaged in an independently established trade, occupation, profession, or business.

(c) Whenever any business employer contracts with or has under it any contractor or subcontractor for any work which is part of its usual trade, occupation, profession, or business, unless it shall be shown to the satisfaction of the commissioner that such contracting is not for the purpose of avoiding the tax imposed by RSA 282-B:3.

V. “Employment” includes an individual’s entire service, performed within or both within and without this state if:

(a) The service performed without this state is incidental to the service performed in this state; or

(b) Some of the service is performed in the state and

(1) The individual’s base of operations, or if there is no base of operations, then the place from which the service is directed or controlled is in this state; or

(2) The individual’s base of operations or the place from which such service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in this state.

282-B:2 Registration. Every business employer shall, within 30 days after the effective date of this section, report its name and post office address to the commissioner, and shall apply to the commissioner for a business employer number. Business employers not in existence upon the effective date of this section shall make such report and application within 30 days after commencement of operations.

282-B:3 Imposition of Tax. A tax is imposed at the rate of one percent upon the business payrolls of every business employer with business payrolls of more than $10,000 per week. The tax imposed under this section shall be included as a deduction allowed from gross business profits under RSA 77-A:4 in determining taxable business profits under the business profits tax.

282-B:4 Returns. Every business employer shall, on or before the fifteenth day following expiration of each calendar quarter, make a return to the commissioner. Returns shall contain full data concerning all matters required by the commissioner for correct computation of business payrolls during the preceding calendar quarter and the tax assessed on such payrolls. All returns shall be signed by the taxpayer or by its authorized representative, subject to the penalties of perjury. Any business employer which fails to file any return at the time prescribed in this section shall pay at the time the return is filed, in addition to any tax liability and without assessment or demand, a late filing fee of $10 for each 30 day period or fraction thereof which has elapsed between the prescribed filing date and the date of actual filing.

282-B:5 Payments. The tax imposed by RSA 282-B:3 is due and payable quarterly at the time the return is filed. Any business employer which fails to make any payment when due shall in addition pay a late payment charge equal to 10 percent of the defaulted payment plus interest computed at the rate of 1.5 percent per month or fraction thereof from the prescribed payment date to the, date payment is actually made. Such late payment charge and interest shall be in addition to any late filing fee which may be due.

282-B:6 Additional Returns. When the commissioner has reason to believe that a taxpayer has failed to file a return or to include any part of its business payrolls in a filed return, the commissioner may require the taxpayer to file a return or a supplementary return showing such additional information as the commissioner may prescribe. Upon receipt of the supplementary return, or if none is received within the time set by the commissioner, the commissioner may find and assess the amount due upon the information that is available. The making of such additional return does not relieve the taxpayer of any penalty for failure to make a correct original return or relieve it from liability for any late payment charge and interest imposed by this act.

282-B:7 Extension of Time for Returns. For good cause, the commissioner may extend the time within which a taxpayer is required to file a return and if such return is filed during the period of extension no penalty may be imposed for failure to file the return at the time required by RSA 282-B:6, but the taxpayer shall be liable for interest and fees as required under RSA 282-B:5.

282-B:8 Taxpayer Records.

I. Every business employer shall:

(a) Keep such records as may be necessary to determine the amount of its liability under this act;

(b) Preserve such records for a period of 3 years or until any litigation or prosecution under this act is fully determined; and

(c) Make such records available for inspection by the commissioner or any of his agents, upon demand, at reasonable times during regular business hours.

II. Violation of this section is punishable by a fine of not less than $100 nor more than $500.

282-B:9 Failure to Make Returns; False Returns or Records.

I. The following acts or omissions are unlawful:

(a) Failing to make any return or declaration required by this act.

(b) Making, causing to be made or permitting to be made any false or fraudulent return or declaration or false statement in any return or declaration, with intent to defraud the state or to evade payment of the tax or any part of the tax imposed by RSA 282-B:3.

(c) Making, causing to be made or permitting to be made any false entry in books, records, or accounts with intent to defraud the state or to evade the payment of the tax or any part of the tax imposed by RSA 282-B:3 or keeping, causing to be kept, or permitting to be kept more than one set of books, records or accounts with such intent.

II. Whoever violates the provisions of this section shall be guilty of a misdemeanor.

282-B:10 Reassessment; Procedure. The commissioner is empowered to determine whether there has been an error in the assessment of the tax imposed under RSA 282-B:3, in accordance with the following provisions:

I. The taxpayer may demand such a determination in writing within 3 years after the tax was due;

II. The commissioner may, on his own motion, undertake such a determination upon written notice to the taxpayer given within 3 years after the tax was due or paid, whichever is later.

III. After a hearing, if requested by the taxpayer, the commissioner shall affirm or shall increase or decrease the tax already assessed. Any increase ordered by the commissioner shall be assessed against the taxpayer and shall carry 10 percent interest from the date originally due. Any decrease ordered by the commissioner shall, with 10 percent interest from the date the tax was paid, be credited against any unpaid tax then due from the taxpayer and any balance due the taxpayer shall be certified to the state treasurer who shall pay the balance to the taxpayer, but such credit and payment together may not exceed the amount of the tax originally paid.

282-B:11 Appeal. Appeals from any reassessments may be made in the same manner as provided in RSA 21-J:28-b for appeal for redetermination or reconsideration of assessments.

282-B:12 Administration.

I. The commissioner shall administer the provisions of this chapter. The commissioner may employ such additional technical, clerical, and other personnel as he or she deems are necessary to carry out the provisions of this chapter.

II. The commissioner shall collect the taxes, interest and penalties imposed under RSA 282-B:4 through RSA 282-B:11 of this chapter and shall pay them to the state treasurer for deposit in the education trust fund. The commissioner may institute actions in the name of the state to recover any tax, interest on tax or the penalties imposed by this chapter.

III. In the collection of the tax imposed by RSA 282-B:3, the commissioner may use all of the powers granted to tax collectors under RSA 80 for the collection of taxes, and he or she shall have all of the duties imposed upon tax collectors by RSA 80 that are applicable to him or her.

IV. The commissioner may take the oath of any person in the course of any hearing authorized by this chapter. In connection with hearings, the commissioner and the taxpayer have the power to compel attendance of witnesses and the production of books, records, papers, vouchers, accounts, or other documents. The commissioner and taxpayer may take the depositions of witnesses residing within or without the state pertaining to a matter under this chapter, in the same way as depositions of witnesses are taken in civil actions in the superior court. Fees of witnesses are the same as those allowed to witnesses in the superior court, and in the case of witnesses summoned by the commissioner, shall be considered as an expense of administration of this chapter.

V. Any notice required by this chapter to be given by the commissioner to a taxpayer shall be made by first class mail to the last known address of the taxpayer and, in the case of hearings, shall be given at least 10 days before the date thereof.

282-B:13 Rulemaking. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to:

I. The filing of returns by business employers and the forms on which such returns shall be made under RSA 282-B:4.

II. The supplemental information to be included in additional returns under RSA 282-B:6.

III. Such rules as are necessary to carry out the administration of this chapter.

21 Statewide Enhanced Education Property Tax. Amend RSA 76:3 to read as follows:

76:3 Statewide Enhanced Education Tax. Beginning July 1, [2005] 2007, and every fiscal year thereafter, the commissioner of the department of revenue administration shall set the statewide enhanced education tax rate at [a level sufficient to generate revenue of $363,000,000] one cent below the rate at which no excess statewide enhanced education property tax is created for any municipality when imposed on all persons and property taxable pursuant to RSA 76:8, except property subject to tax under RSA 82 and RSA 83-F. The education property tax rate shall be effective for [the following] each fiscal year of the biennium. The rate shall be set to the nearest 1/2 cent necessary to generate the revenue required in this section.

22 Rate of Tax for Fiscal Year 2008. Notwithstanding the provisions of RSA 76:8, the commissioner of revenue administration shall set the rate for the statewide enhanced education property tax for fiscal year 2008 based on data used to calculate each municipality’s tax base for 2005.

23 References Added. Amend RSA 6:12, I(b)(65) to read as follows:

(65) Money received under RSA 77-A, RSA 77-E, RSA 77-F:29, RSA 78, RSA 78-A, RSA 78-B, RSA 83-F, RSA 86-A, RSA 198:46, [and from the sweepstakes fund,] RSA 282-B, and RSA 284:21-w, which shall be credited to the education trust fund under RSA 198:39.

24 Education Trust Fund. Amend RSA 198:39, I(k) to read as follows:

(k) Funds collected and paid over to the state treasurer under RSA 77-F:29, relative to the luxury sales and use tax.

(l) Funds collected and paid over to the state treasurer under RSA 78-A:26, III, relative to the tax on admission charges.

(m) Funds collected and paid over to the state treasurer under RSA 284:21-w, relative to the tax imposed on gambling winnings.

(n) Funds collected and paid over to the state treasurer under RSA 86-A:85, relative to the estate tax.

(o) Funds collected and paid over to the state treasurer under RSA 282-B:12, II, relative to the business payroll tax.

(p) Any other moneys appropriated from the general fund.

25 Effective Date.

I. Section 1 of this act shall take effect April 1, 2008.

II. Sections 18, 21, and 22 of this act shall take effect upon its passage.

III. The remainder of this act shall take effect July 1, 2007.

LBAO

07-1096

Revised 03/05/07

HB 925 FISCAL NOTE

AN ACT relative to state and local taxes.

FISCAL IMPACT:

The Department of Revenue, the Liquor Commission, the Department of Employment Security and the New Hampshire Municipal Association indicate this bill will increase state and local expenditures and state restricted revenue by an indeterminable amount in FY 2008 and each year thereafter. There will be no fiscal impact on county expenditures or county and local revenue.

METHODOLOGY:

The Department of Revenue Administration and the Department of Employment Security state this bill proposes revenue to be dedicated to the Education Trust Fund.

Section 1: Taxation of property which is not primary residential real estate at twice the rate of primary residential real estate under the local property tax. The Department of Revenue Administration states this will be revenue neutral, resulting in a shift of the tax burden to owners of commercial property, rental housing, and on residents owning a second home. The New Hampshire Municipal Association states this bill will result in increased expenditures related to additional administrative work by municipal assessors and tax collectors to identify primary use of all residential properties and to obtain updated software to process tax bills.

Section 2: Establishes a luxury sales and use tax on motor vehicles costing $30,000 or more and any item costing $10,000 or more. The Department of Revenue Administration states the enforcement of this tax would be costly. The Department also states it does not have data on how many of the $4.5 billion of New Hampshire automobile sales in 2002 was for vehicles costing $30,000 or more. The Department assumes 25% of the vehicles sold cost $30,000 or more and would be subject to the three percent tax resulting in revenue of approximately $34 million. The Department is not able to determine a value for items sold costing $10,000 or over. The New Hampshire Municipal Association states the luxury sales and use tax appears to exempt municipalities, volunteer fire, ambulance, and rescue squads, thus does not have a fiscal impact.

Sections 3 through 9: Adds admission charges as taxable item under the meals and rentals tax. The Department of Revenue Administration states this tax would be very difficult to administer and enforce because the charge is usually paid in cash and receipts are not provided. The Department states the fiscal impact on expenditures and revenue is indeterminable.

Sections 10 and 11: Relates to gambling winnings under RSA 284. The Department of Revenue Administration states this bill would require every convenience store, gasoline station, grocery store, and liquor store to withhold the five percent tax and separately account for it. This would increase expenditures by an indeterminable amount. The Pari-Mutuel Commission states there is no fiscal impact on the Commission because they are not responsible for collecting or enforcing gambling provisions.

Sections 12 through 15: Relates to tobacco tax changes under RSA 78. The Department of Revenue Administration states this bill would tax cigars, snuff, and everything else tobacco related. The Department states this change would apply to persons licenses under RSA 78:2; however, many purveyors of cigars may not be licensed under RSA 78:2. The Department estimates this change could generate approximately $1 million in revenue.

Sections 16 and 17: Relates to changes in determining the tax on beer under RSA 178. The Liquor Commission states this bill would make the beer tax collection very complex, difficult to monitor, collect, and enforce. The Commission states the over 300 different brands of beer sold in New Hampshire is packaged in over 100 different ways, all having different prices. The proposed change would result in the state collecting more tax in some instances and less tax in other instances. The Commission is not able to determine the fiscal impact of this bill on the beer tax.

Sections 18 and 19: Relates to the estate tax under RSA 86-A. The Department of Revenue Administration states this tax essentially reinstates the legacy and succession tax that was repealed effective January 1, 2003. This estate tax would have a $3 million exemption per estate. Based on the average revenue for the last five years the legacy and succession tax was collected and applying the $3 million exemption this estate tax would generate approximately $500,000 in revenue.

Section 20: Relates to a new business payroll tax under RSA 282-B. The Department of Revenue Administration states this tax would impose a one percent tax rate only on businesses with payrolls greater than $10,000 per week and allow the tax to be deducted from gross business profits under RSA 77-A:4. The Department assumed only New Hampshire wages would be taxable and determined the total wages paid in calendar year 2005 that this tax would apply totaled $18.4 billion. One percent of this amount would equal $184.4 million in revenue which would be slightly reduced to the loss of some business profits taxes.

The Department of Employment Security states this tax will generate approximately $188.6 million. The Department also states there will be increased expenditures associated with this tax related to the need for additional personnel (2 program assistants I, 2 accounting technicians, 2 data entry operators III, and 1 field agent), mailing of tax forms, and a computer system to implement the tax. The Department assumes the following expenditures:



This bill does not provide authorization or an appropriation for additional positions.

The New Hampshire Municipal Association states this tax does not appear to impact municipalities.

Sections 21 and 22: Relates to the statewide enhanced education tax. The Department of Revenue states this bill directs the commissioner to set the tax rate at one cent below the rate at which no excess is created. In 2006 there was not an excess, thus there should not be any fiscal impact for this change.

Section 22: Directs the revenues generated as a result of this bill be deposited in the Education Trust Fund.

• HB925 at GenCourtMobile

Bill Text Revisions

HB925 Revision: 12039 Date: Jan. 1, 2008, midnight

Docket

---