HB 571-FN-A - AS INTRODUCED
2015 SESSION
\t15-0818
\t09/10
HOUSE BILL\t\t571-FN-A
AN ACT\trelative to taxation of trusts under the interest and dividends tax.
COMMITTEE:\tWays and Means
\tThis bill reestablishes taxation of trusts under the interest and dividends tax.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
\t15-0818
\t09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Fifteen
AN ACT\trelative to taxation of trusts under the interest and dividends tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 Interest and Dividends Tax; Who Taxable. Amend RSA 77:3, I(b) and (c) to read as follows:
\t\t\t(b) Partnerships, limited liability companies, [and] associations, and trusts, the beneficial interest in which is not represented by transferable shares, whose gross interest and dividend income from all sources exceeds $2,400 during the taxable year, but not including a qualified investment company as defined in RSA 77-A:1, XXI, or a trust comprising a part of an employee benefit plan, as defined in the Employee Retirement Income Security Act of 1974, section 3.
\t\t\t(c) [Executors] Fiduciaries deriving their appointment from a court of this state whose gross interest and dividend income from all sources exceeds $2,400 during the taxable year.
\t2 Interest and Dividends Tax; Trusts Subject to Tax. Amend RSA 77:4, III to read as follows:
\t\tIII. Dividends, other than stock dividends paid in new stock of the partnership, limited liability company, [or] association, or trust issuing the same, on shares in partnerships, limited liability companies, [or] associations, or trusts the beneficial interest in which is represented by transferable shares.
\t3 Interest and Dividends Tax; Income From Trusts. RSA 77:10 is repealed and reenacted to read as follows:
\t77:10 Income From Trusts. The income received by estates held by trustees, any one of whom is an inhabitant of this state, or has derived his appointment from a court of this state, shall be subject to the taxes imposed by this chapter, except that income received by estates held by trustees treated as grantor trusts under section 671 of the United States Internal Revenue Code shall be included in the return of their grantor, to the extent that the grantor is an inhabitant or resident of this state.
\t4 New Section; Interest and Dividends Tax; Taxation of Income From Nonresident Trusts. Amend RSA 77 by inserting after section 12 the following new section:
\t77:12-a Taxation of Income From Nonresident Trusts. If an inhabitant of this state receives income from one or more trustees, none of whom is an inhabitant of this state or has derived his or her appointment from a court of this state, such income shall be subject to the taxes imposed by this chapter if it would be taxable to such inhabitant if received by him or her from its source.
\t5 Interest and Dividends Tax; Guardians, etc. Amend RSA 77:13 to read as follows:
\t77:13 Guardians, etc. RSA 77:9 through RSA [77:11] 77:12-a shall apply to guardians, conservators, trustees in bankruptcy, receivers, and assignees for the benefit of creditors, so far as apt, to the taxable income received by them and to their beneficiaries, and to corporations acting as trustees or in any other fiduciary capacity.
\t6 Interest and Dividends Tax; Application of Sections. Amend RSA 77:14-d to read as follows:
\t77:14-d Application of Sections. RSA 77:14-a to 77:14-c shall apply, so far as apt, to associations and trusts, but not to partnerships, limited liability companies, [and] associations, and trusts the beneficial interest in which is represented by transferable shares.
\t7 Applicability. This act shall apply to taxable periods ending on or after December 31, 2015.
\t8 Effective Date. This act shall take effect July 1, 2015.
\t\t\t\t\t\t\t\t\t\t\t\t\tLBAO
\t\t\t\t\t\t\t\t\t\t\t15-0818
\t\t\t\t\t\t\t\t\t\t\t01/23/15
\t\t\t\t\t\t\t\t\t\t\t
HB 571-FN-A - FISCAL NOTE
AN ACT\trelative to taxation of trusts under the interest and dividends tax.
FISCAL IMPACT:
The Department of Revenue Administration states this bill, as introduced, will increase state general fund revenue by an indeterminable amount in FY 2016 and each year thereafter. There will be no impact on state, county, and local expenditures, and county and local revenue.
METHODOLOGY:
The Department of Revenue Administration (DRA) states this proposed bill seeks to make trusts, once again, subject to filing and paying the Interest and Dividends (I&D) Tax. This could be administered by the Department of Revenue Administration (DRA) without any additional cost. This bill would take effect July 1, 2015 and would apply to taxable periods ending on or after December 31. 2015. The DRA database does have the total amount of tax paid by trusts in Tax Year 2012, the last year in which trusts were still required to file and pay the I&D Tax. For Tax Year 2012, trusts paid $5,343,143. The DRA assumes that the State will regain at least this amount of tax revenue by having trusts subject to the I&D Tax. The Department states it is possible that even more taxes will be paid by trusts, based upon New Hampshire resident beneficiaries, as trusts have been recently created in light of the various changes in New Hampshire laws regarding trusts.