State & Local Tax Impacts of COVID-19 for New Hampshire – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: Sep 09, 2021
SALT GOV COVID TW - 1

Information current as of August 31, 2021.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to New Hampshire

  • New Hampshire issued guidance about the taxability of certain COVID-19 financial relief programs under the business profits tax (BPT) and business enterprise tax (BET). All federal- and state-level relief distributed to taxpayers required to file a BPT return must be included as income for BPT purposes. However, any relief taking the form of a loan shouldn’t be included as income for BPT purposes unless that loan is forgiven or otherwise discharged as per the Internal Revenue Code (IRC). Taxpayers can continue to take deductions for deductible expenses of operating their business, even when those expenses are paid for with state-level relief. In addition, any federal- or state-level relief received by taxpayers required to file a BET return that’s used to pay wages or other compensation to employees, interest, or dividends must be included in the enterprise value tax base of the business and subject to the BET. In some instances, the federal tax treatment of federal-level relief will be different from the state-level tax treatment of those same funds because the BPT statute references a version of the IRC in existence prior to the CARES Act and the Coronavirus Response and Relief Supplemental Appropriations Act. For example, federal PPP loans that are ultimately forgiven in accordance with the terms of that program may not be taxable federally but should be included as income for BPT purposes, subject to the exclusions in IRC §108. Schedule IV of the BPT return specifically identifies several areas where taxpayers may need to make adjustments to their taxable income for BPT purposes to account for the different state and federal tax treatment of COVID-19 relief.
    • New Hampshire Technical Information Release No. 2021-001; January 20, 2021.
  • New Hampshire legislation clarifies that PPP loans aren’t included in gross business income for purposes of the BPT. New Hampshire’s BPT treatment will now mirror the federal treatment of forgiven PPP loan amounts. Further, no deduction will be denied, no tax attribute reduced, and no basis increased because of the exclusion from gross business income.
    • New Hampshire S.B. 6, enacted June 10, 2021, and applicable to tax years ending after March 3, 2020.
    • New Hampshire Technical Information Release No. 2021-003; June 21, 2021.
  • New Hampshire legislation specifies that no out-of-state business or employee temporarily in the state to perform disaster-related or emergency-related work during a disaster response period will be considered to have sufficient presence in the state to require tax filing or licensing or be subject to individual income, corporate income, trust income, property, or certain excise taxes.
    • New Hampshire S.B. 103, effective October 9, 2021.
       

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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