Bill Text - SB58 (2011)

Adding qualified community development entities to the definition of "qualified investment company" under the business profits tax and the business enterprise tax.


Revision: March 31, 2011, midnight

SB 58-FN-A – AS AMENDED BY THE SENATE

03/16/11 0686s

2011 SESSION

11-0999

09/03

SENATE BILL 58-FN-A

AN ACT adding qualified community development entities to the definition of “qualified investment company” under the business profits tax and the business enterprise tax.

SPONSORS: Sen. Odell, Dist 8

COMMITTEE: Ways and Means

ANALYSIS

This bill adds qualified community development entities to the definition of “qualified investment company” under the business profits tax and the business enterprise tax.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/16/11 0686s

11-0999

09/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eleven

AN ACT adding qualified community development entities to the definition of “qualified investment company” under the business profits tax and the business enterprise tax.

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

1 Purpose. The general court finds:

I. The New Hampshire business finance authority has been authorized by the United States Treasury Department to allocate federal New Markets Tax Credits to support economic development in certain eligible low-income areas of the state.

II. Under the federal New Markets Tax Credit Program, the business finance authority is required to establish certain “qualified community development entities” for purposes of facilitating investment by third parties to support economic development transactions.

III. This act ensures that “qualified community development entities" established by the business finance authority will not be subject to the business profits tax, the business enterprise tax, or the interest and dividends tax. The ultimate recipient of the investment funds, however, will continue to be subject to these taxes.

2 Business Profits Tax; Definitions; Qualified Investment Company. Amend RSA 77-A:1, XXI(a) to read as follows:

XXI.(a) “Qualified investment company” means:

(1) A regulated investment company as defined in section 851 of the United States Internal Revenue Code as defined in RSA 77-A:1, XX;

(2) An organization that is an investment company under the Investment Company Act of 1940 as amended; [or]

(3) An organization that would be an investment company under the Investment Company Act of 1940, as amended, but for the exception from investment company status provided by section 3(c)(1) or 3(c)(7) of said Investment Company Act[.]; or

(4) A qualified community development entity as defined in section 45D of the United States Internal Revenue Code.

3 Business Enterprise Tax; Definitions; Qualified Investment Company. Amend RSA 77-E:1, XIV(a) to read as follows:

XIV.(a) “Qualified investment company” means:

(1) A regulated investment company as defined in section 851 of the United States Internal Revenue Code as defined in RSA 77-E:1, XVII;

(2) An organization that is an investment company under the Investment Company Act of 1940, as amended; [or]

(3) An organization that would be an investment company under the Investment Company Act of 1940, as amended, but for the exception from investment company status provided by section 3(c)(1) or 3(c)(7) of said Investment Company Act[.]; or

(4) A qualified community development entity as defined in section 45D of the United States Internal Revenue Code, which entity is owned, controlled, or managed, directly or indirectly, by the business finance authority of the state of New Hampshire.

4 Applicability. This act shall apply with respect to all taxable periods ending on or after December 31, 2010.

5 Effective Date. This act shall take effect upon its passage.

LBAO

11-0999 Amended 03/30/11

SB 58 FISCAL NOTE

AN ACT adding qualified community development entities to the definition of “qualified investment company” under the business profits tax and the business enterprise tax.

FISCAL IMPACT:

    The Department of Revenue Administration states this bill, as amended by the Senate (Amendment #2011-0686s), may decrease state revenue by an indeterminable amount in FY 2011 and each year thereafter. This bill would have no fiscal impact on state, county, and local expenditures, or county and local revenues.

METHODOLOGY:

    The Department of Revenue Administration states this bill adds qualified community development entities to the definition of qualified investment company under the business profits tax (BPT), business enterprise tax (BET), and interest and dividends tax (I&D). The Department states this bill would take effect upon passage and be applicable to taxable periods ending on or after December 31, 2010. The Department notes the retroactive aspect of the proposed legislation could allow certain businesses to file amended returns and receive a refund of business or interest and dividends taxes already paid thereby exasperating any fiscal impact of the proposed legislation. The Department states it is not known if any current or past filers of business tax or I&D tax returns would qualify as being tax exempt under these new provisions as the Department does not have any data to identify who may be affected by this bill, therefore, the exact fiscal impact cannot be determined at this time.

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