Revision: Jan. 1, 2008, midnight
SB 308-FN-A – AS AMENDED BY THE HOUSE
03/06/08 0820s
03/20/08 1095s
30Apr2008… 1351h
2008 SESSION
09/03
SENATE BILL 308-FN-A
AN ACT preventing potential double taxation on the identical gross business profits of certain business organizations.
This bill prevents potential double taxation on the identical gross business profits of certain business organizations.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/06/08 0820s
03/20/08 1095s
30Apr2008… 1351h
08-2634
09/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT preventing potential double taxation on the identical gross business profits of certain business organizations.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraph; Preventing Potential Double Taxation. Amend RSA 77-A:4 by inserting after paragraph IV the following new paragraph:
IV-a.(a) In the case of a parent business organization, a deduction equal to the apportioned amount of gross business profits of the parent as are derived from one or more actual distributions received from a wholly owned subsidiary, which distributions have already been subject to taxation under this chapter during the same or an overlapping fiscal period.
(b) For this paragraph only:
(1) “Apportioned amount of gross business profits” means the product of the total amount of gross business profits as are derived from actual distributions received by the parent from the wholly owned subsidiary, multiplied by the apportionment fraction of the subsidiary as determined pursuant to RSA 77-A:3, II(a) for the tax period of the subsidiary that includes the date on which actual distributions were paid.
(2) “Parent” means a business organization which is required to file a separate business profits tax return and which owns a 100 percent interest in one or more business organizations each required to file separate business profits tax return and that make actual distributions to the parent.
(3) “Subsidiary” means a business organization which is required to file a separate business profits tax return and which is wholly owned by a parent, as defined in this paragraph.
(c) The purpose of this deduction is solely to prevent unconstitutional double taxation on the identical gross business profits of business organizations which share an identity as is the case of a parent and a wholly owned subsidiary.
2 Applicability. Section 1 of this act shall apply for all actual distributions received on and after August 17, 2007.
3 Effective Date. This act shall take effect upon its passage.
LBAO
08-2634
Amended 04/08/08
SB 308 FISCAL NOTE
AN ACT preventing potential double taxation on the identical gross business profits of business organizations.
FISCAL IMPACT:
The Department of Revenue Administration states this bill, as amended by the Senate (Amendment #2008-1095s), may decrease state revenue by an indeterminable amount in FY 2008 and each year thereafter. There will be no fiscal impact on county and local revenue or state, county, and local expenditures.
METHODOLOGY:
The Department of Revenue Administration states the purpose of this bill is to prevent potential double taxation on the identical gross business profits of business organizations. The Department estimates this bill may decrease state revenue by $12,000,000 to $15,000,000 a year based on the potential loss of foreign dividends and enforcement difficulties that may be created by the bill. Any change in the business profits tax can potentially impact the general and education trust funds.