Revision: March 8, 2016, midnight
\t \t\tSB 239-FN - AS AMENDED BY THE SENATE
01/21/2016 0055s
02/04/2016 0311s
02/04/2016 0413s
2015 SESSION
\t15-1029
\t10/03
SENATE BILL\t\t239-FN
SPONSORS:\tSen. Bradley, Dist 3
COMMITTEE:\tWays and Means
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AMENDED ANALYSIS
\tThis bill updates the effective version of the United States Internal Revenue Code of 1986 applicable to the business profits tax, subject to certain adjustments. The bill also requires the commissioner of revenue administration to report biennially on changes to the Internal Revenue Code.
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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\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
01/21/2016 0055s
02/04/2016 0311s
02/04/2016 0413s\t15-1029
\t10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Fifteen
AN ACT\trelative to application of the Internal Revenue Code to provisions of the business profits tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 New Subparagraph; Business Profits Tax; Definition; United States Internal Revenue Code. Amend RSA 77-A:1, XX by inserting after subparagraph (l) the following new subparagraph:
\t\t\t(m) For all taxable periods beginning on or after January 1, 2016, the United States Internal Revenue Code of 1986, as amended, subject to the RSA 77-A:3-a.
\t2 Business Profits Tax; Adjustments; Internal Revenue Code. RSA 77-A:3-a is repealed and reenacted to read as follows:
\t77-A:3-a Adjustments; Internal Revenue Code Provisions. In determining gross business profits for any period, before net operating loss and special deductions, a business organization shall apply the provisions of the United States Internal Revenue Code consistent with the provisions of this chapter, with the following adjustments:
\t\tI. The United States Internal Revenue Code shall be applied without section 168(k) of such code.
\t\tII. The United States Internal Revenue Code shall be applied without section 199 of such code.
\t\tIII. The United States Internal Revenue Code shall be applied so that the aggregate cost which may be taken into account under section 179(a) of such code for any taxable year shall not exceed $25,000.
\t\tI. Section 1 of this act shall take effect for taxable periods beginning on or after January 1, 2016.
\t\tII. Section 2 of this act shall take effect for property placed in service on or after January 1, 2016.
\t4 New Paragraph; Duties of the Commissioner of Revenue Administration; Report; Internal Revenue Code Changes. Amend RSA 21-J:3 by inserting after paragraph XXXII the following new paragraph:
\t\tXXXIII. File a report at least biennially with the finance committees of the senate and the house of representatives informing the committees of changes to the United States Internal Revenue Code, related Treasury Regulations, and administrative rulings which would impact New Hampshire.
\t5 Repeal. RSA 77-A:1, X(g), relative to a reference to the Internal Revenue Code, is repealed.
\t6 Effective Date. This act shall take effect upon its passage.
\t\t\t\t\t\t\t\t\t\t\t15-1029
\t\t\t\t\t\t\t\t\t\t\tAmended 2/11/16
SB 239-FN- FISCAL NOTE
AN ACT\trelative to application of the Internal Revenue Code to provisions of the business profits tax.
FISCAL IMPACT:
The Department of Revenue Administration states this bill, as amended by the Senate (Amendment 2016-0311s and 2016-0413s), will have an indeterminable fiscal impact on state revenue in FY 2017 and each year thereafter. There is no impact on county and local revenue or state, county and local expenditures.
METHODOLOGY:
The Department of Revenue Administration states this bill amends the business profits tax statute to require that for all taxable periods beginning on or after January 1, 2016, taxpayers will calculate their business profits tax liability using the Internal Revenue Code of 1986, as amended. This would effectuate automatic or "rolling" conformity with any federal amendments to the Internal Revenue Code (IRC) as they are made. The bill also repeals RSA 77-A:3-a and reenacts it to read that business organizations shall apply the IRC consistent with the statute except that IRC section 168(k) and IRC section 199 shall not apply and the deduction pursuant to IRC section 179(a) is limited to $25,000. The Department states the removal of language from RSA 77-A:3-a requiring the taxpayer to determine gross business profits before net operating loss and special deductions and replacing it with the phrase "aggregate costs" potentially allows the taxpayer to calculate a loss prior to taking the IRC section 179(a) $25,000 expense deduction. The Department indicates the bill will have an indeterminable fiscal impact on state revenue as it cannot predict which federal tax provisions would apply to NH taxpayers for their current and future tax returns or how those changes might impact each taxpayer's overall tax liability. The Department is able to administer this bill, including the new reporting requirement, within the Department's operating budget.