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PODCAST

New Hampshire: Market-Based Sourcing Rules Adopted

Senate Bill 190 adopts market-based sourcing rules for purposes of the New Hampshire Business Profits Tax and Business Enterprise Tax.

Podcast Transcript

Senate Bill 190, which was signed into law on September 9, 2019, adopts market-based sourcing rules for purposes of the New Hampshire Business Profits Tax and Business Enterprise Tax. Under the revised law, receipts from sales of other than tangible personal property will be sourced to New Hampshire if the business organization’s market for the sale is in the state. Specific rules address when receipts from certain types of sales are attributed to New Hampshire. For instance, service receipts will be sourced to New Hampshire to the extent the service is delivered to a location in the state. Receipts from intangibles will be sourced to the state to the extent the intangible is used in New Hampshire. Interest income will be sourced to New Hampshire to the extent the debtor or the encumbered property is in New Hampshire, and dividends will be attributed to the state if the business organization’s commercial domicile is in New Hampshire. A catch-all provision applies to other income, which will be attributed to New Hampshire to the extent the income is derived from sources in the state. If the state or states of assignment cannot be determined, the taxpayer must reasonably approximate the state or states of assignment. A throw-out rule applies to the extent receipts from sales of other than tangible personal property are assigned to a state in which the taxpayer is not taxable or the state of assignment cannot be determined or reasonably approximated. The bill also establishes a committee to study apportionment. The market-based sourcing rules apply to taxable periods ending on or after December 31, 2021. Please stay tuned to TWIST for future legislative updates. 

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