HB 568-FN-A - AS INTRODUCED
2021 SESSION
21-0287
10/05
HOUSE BILL 568-FN-A
AN ACT increasing exemptions to the interest and dividends tax and repealing the tax in
2025.
SPONSORS: Rep. Silber, Belk. 2; Rep. Binford, Graf. 15; Rep. Layon, Rock. 6; Rep. McGuire,
Merr. 29; Rep. Potucek, Rock. 6; Rep. Mooney, Hills. 21; Rep. Baldasaro, Rock. 5;
Rep. J. Osborne, Rock. 4; Sen. Ricciardi, Dist 9; Sen. Daniels, Dist 11
COMMITTEE: Ways and Means
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ANALYSIS
This bill repeals the interest and dividends tax, RSA 77, effective January 1, 2025, and increases
the exemptions for taxpayers each year prior to the repeal.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
 HB 568-FN-A - AS INTRODUCED
21-0287
10/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty One
AN ACT increasing exemptions to the interest and dividends tax and repealing the tax in
2025.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 1 Interest and Dividends Tax; Who Taxable. Amend RSA 77:3 to read as follows:
2 77:3 Who Taxable.
3 I. Taxable income is that income received from interest and dividends during the tax year
4 prior to the assessment date by:
5 (a) Individuals who are inhabitants or residents of this state for any part of the taxable
6 year whose gross interest and dividend income from all sources, including income from a qualified
7 investment company pursuant to RSA 77:4, V, exceeds $2,400 during [that] the taxable period
8 ending on or before December 31, 2021; $4,800 during the taxable period ending December
9 31, 2022; $7,200 during the taxable period ending December 31, 2023; and $9,600 during the
10 taxable period ending December 31, 2024.
11 (b) Partnerships, limited liability companies, and associations, the beneficial interest in
12 which is not represented by transferable shares, whose gross interest and dividend income from all
13 sources exceeds [$2,400] the amounts listed in subparagraph (a) during the taxable year, but
14 not including a qualified investment company as defined in RSA 77-A:1, XXI, or a trust comprising a
15 part of an employee benefit plan, as defined in the Employee Retirement Income Security Act of
16 1974, section 3.
17 (c) Executors deriving their appointment from a court of this state whose gross interest
18 and dividend income from all sources exceeds [$2,400] the amounts listed in subparagraph (a)
19 during the taxable year.
20 II. No person shall be subject to tax under RSA 77 solely due to its holding an ownership
21 interest in a qualified investment company as defined in RSA 77-A:1, XXI.
22 2 Exemptions. Amend RSA 77:5 to read as follows:
23 77:5 Exemptions. Each taxpayer shall have the following exemptions:
24 I. Income of $2,400 for the tax years ending on or before December 31, 2021; $4,800 for
25 the tax year ending December 31, 2022; $7,200 for the tax year ending December 31, 2023;
26 and $9,600 for the tax year ending December 31, 2024.
27 II. An additional $1,200 for the tax years ending on or before December 31, 2021;
28 $2,400 for the tax year ending December 31, 2022; $3,600 for the tax year ending December
29 31, 2023; and $4,800 for the tax year ending December 31, 2024, if either or both taxpayers are
30 65 years of age or older on the last day of the tax year.
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1 III. An additional $1,200 for the tax years ending on or before December 31, 2021;
2 $2,400 for the tax year ending December 31, 2022; $3,600 for the tax year ending December
3 31, 2023; and $4,800 for the tax year ending December 31, 2024, if either or both taxpayers are
4 blind.
5 IV. An additional $1,200 for the tax years ending on or before December 31, 2021;
6 $2,400 for the tax year ending December 31, 2022; $3,600 for the tax year ending December
7 31, 2023; and $4,800 for the tax year ending December 31, 2024, if either or both taxpayers are
8 disabled, unable to work, and have not yet reached their sixty-fifth birthday.
9 3 Reference to Interest and Dividends Tax Deleted; 2025 Amend RSA 14-B:8, III(q) to read as
10 follows:
11 (q) New Hampshire taxes, specifying if business profits tax[,] or business enterprise
12 tax[, or interest and dividends tax].
13 4 Reference to Interest and Dividends Tax Deleted; 2025. Amend RSA 15-A:5, I(d)(17) to read
14 as follows:
15 (17) New Hampshire taxes, specifying if business profits tax[,] or business
16 enterprise tax[, or interest and dividends tax].
17 5 Reference to Interest and Dividends Tax Deleted; 2025. Amend RSA 21-J:31 to read as
18 follows:
19 21-J:31 Penalty for Failure to File. Any taxpayer who fails to file a return when due, unless an
20 extension has been granted by the department, shall pay a penalty equal to 5 percent of the amount
21 of the tax due or $10, whichever is greater, for each month or part of a month during which the
22 return remains unfiled. The total amount of any penalty shall not, however, exceed 25 percent of the
23 amount of the tax due or $50, whichever is greater. This penalty shall not be applied in any case in
24 which a return is filed within the extended filing period as provided in [RSA 77:18-b,] RSA 77-A:9,
25 RSA 77-E:8, RSA 83-C:6, RSA 83-E:5, RSA 84-A:7, or RSA 84-C:7, or the failure to file was due to
26 reasonable cause and not willful neglect of the taxpayer. The amount of the penalty is determined
27 by applying the percentages specified to the net amount of any tax due after crediting any timely
28 payments made through estimating or other means.
29 6 Reference to Interest and Dividends Tax Deleted; 2025. Amend RSA 21-J:33-a, I to read as
30 follows:
31 I. If there is a substantial understatement of tax imposed under [RSA 77,] RSA 77-A,
32 RSA 77-E, RSA 78-A, RSA 78-C, RSA 82-A, RSA 83-C, RSA 83-E, or RSA 84-A for any taxable
33 period, there shall be added to the tax an amount equal to 25 percent of the amount of any
34 underpayment attributable to such understatement.
35 7 Reference to Interest and Dividends Tax Deleted; 2025. Amend RSA 21-J:46, III to read as
36 follows:
 HB 568-FN-A - AS INTRODUCED
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1 III. This section shall apply only to tax returns and associated payments under [RSA 77,]
2 RSA 77-A[,] and RSA 77-E.
3 8 References to Interest and Dividends Tax Deleted; 2025. Amend RSA 71-C:4, I and II to read
4 as follows:
5 I. On or before December 15 of every fiscal year the commissioner of the department of
6 revenue administration shall certify in a report to the general court and the governor an analysis of
7 each of the past fiscal year’s tax expenditures as identified in RSA 71-C:2, and other credits allowed
8 under [RSA 77,] RSA 77-A, RSA 77-E, RSA 77-G, RSA 78, RSA 78-A, 78-B, RSA 82-A, RSA 83-E,
9 RSA 84-A, RSA 84-C, and RSA 400-A.
10 II. The report shall be divided into the following parts:
11 (a) Tax expenditures as determined by the joint committee on tax expenditure review
12 under RSA 71-C:3;
13 (b) Potential liabilities against the state’s revenues, specifically:
14 (1) Other credits allowed under [RSA 77,] RSA 77-A, RSA 77-E, RSA 77-G, RSA 78,
15 RSA 78-A, RSA 78-B, RSA 82, RSA 82-A, RSA 83-E, RSA 84-A, RSA 84-C, and RSA 400-A against
16 the business profits tax imposed by RSA 77-A; and
17 (2) Credit carryovers from overpaid taxes.
18 9 Education Tax Credit Scholarship Organizations; 2025. Amend RSA 77-G:3 to read as follows:
19 77-G:3 Contributions to Scholarship Organizations. For each contribution made to a scholarship
20 organization, a business organization, business enterprise, or individual may claim a credit equal to
21 85 percent of the contribution against the business profits tax due pursuant to RSA 77-A, against the
22 business enterprise tax due pursuant to RSA 77-E, [against the tax on interest and dividends under
23 RSA 77,] or apportioned against each provided the total credit granted shall not exceed the
24 maximum education tax credit allowed. Credits provided under this chapter shall not be deemed
25 taxes paid for the purposes of RSA 77-A:5, X. The department of revenue administration shall not
26 grant the credit without a scholarship receipt. No business organization, business enterprise, or
27 individual shall direct, assign, or restrict any contribution to a scholarship organization for the use
28 of a particular student or nonpublic school. No business organization, business enterprise, or
29 individual shall receive more than 10 percent of the aggregate amount of tax credits permitted in
30 RSA 77-G:4.
31 10 Education Tax Credit Scholarship Organizations; 2025. Amend RSA 77-G:5, I, (i)(2) to read
32 as follows:
33 (2) Not knowingly award a scholarship to any lineal descendant or equivalent step-
34 person of any proprietor, partner, or member of any business organization, business enterprise, or
35 individual making a contribution to a scholarship organization and claiming a credit against the
36 business profits tax[,] or business enterprise tax, [or tax on interest and dividends,] nor any lineal
37 descendant or equivalent step-person of any officer, director, or owner of more than a 5 percent
 HB 568-FN-A - AS INTRODUCED
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1 interest in any business organization, business enterprise, or individual making a contribution to a
2 scholarship organization and claiming a credit against the business profits tax[,] or business
3 enterprise tax, o[r tax on interest and dividends,] nor any employee who is among the highest-paid
4 20 percent of paid employees in any business organization, business enterprise, or individual making
5 a contribution to a scholarship organization and claiming a credit against the business profits tax[,]
6 or business enterprise tax[, or tax on interest and dividends].
7 11 Issuance of Electric Rate Reduction Bonds; 2025. Amend RSA 369-B:5, VI to read as follows:
8 VI. The exercise of the powers granted by this chapter shall be in all respects for the benefit
9 of the people of this state, for the increase of their commerce, welfare, and prosperity, and as the
10 exercise of such powers shall constitute the performance of an essential public function, neither any
11 electric utility, any affiliate of any electric utility, any financing entity, nor any collection or other
12 agent of any of the foregoing shall be required to pay any taxes or assessments upon or in respect of
13 any revenues or property received, acquired, transferred, or used by any electric utility, any affiliate
14 of any electric utility, any financing entity, or any collection or other agent of any of the foregoing
15 under the provisions of this chapter or upon or in respect of the income therefrom, and any rate
16 reduction bonds shall be treated as notes or bonds of a political subdivision of the state [for purposes
17 of RSA 77].
18 12 Repeals; Interest and Dividends Taxation; 2025. The following are repealed:
19 I. RSA 21-J:45, I(c), relative to reports on status of requested interest and dividends tax
20 refunds.
21 II. RSA 77, relative to taxation of incomes.
22 III. RSA 77-A:4-c, II(c), relative to the duty of a committee to study the taxation of
23 distributions received by investment organizations under the interest and dividends tax.
24 IV. RSA 77-A:4, I, relative to an adjustment to the business profits tax for taxes under
25 RSA 77.
26 V. RSA 195-H:10, relative to exemption from RSA 77 for income and distributions from
27 qualified tuition programs.
28 VI. RSA 195-K:4 relative to exemption from RSA 77 for income and distributions in the
29 ABLE savings account program.
30 VII. RSA 261:52-a relative to notice that the interest and dividends tax may be due.
31 VIII. RSA 391:3 relative to the taxation of common trust funds under RSA 77.
32 13 Returns for Interest and Dividends Taxes. All persons who are liable for a tax under RSA 77
33 as of December 31, 2024, who thereafter are no longer liable for a tax under RSA 77 because of the
34 passage of this act shall make a return of such taxes due the commissioner of revenue
35 administration in such manner and on such forms as the commissioner shall prescribe in rules
36 adopted under RSA 541-A. The administrative provisions of RSA 77 shall remain in effect to permit
37 the collection of taxes upon income taxable under RSA 77 which is received by persons subject to
 HB 568-FN-A - AS INTRODUCED
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1 taxation under that chapter through December 31, 2024, and to permit the distribution of that
2 revenue. Persons who are liable for a tax under RSA 77 who do not report the payment of federal
3 income taxes on a calendar year basis are entitled to such proportion of the exemptions allowed in
4 RSA 77 as the reporting period bears to their taxable year.
5 14 Application; Repeal of RSA 77. Paragraph II of section 12 of this act shall apply to taxable
6 periods beginning after December 31, 2024.
7 15 Effective Date.
8 I. Sections 3-12 of this act shall take effect January 1, 2025.
9 II. The remainder of this act shall take effect July 1, 2021.
 LBA
21-0287
1/4/21
HB 568-FN-A- FISCAL NOTE
AS INTRODUCED
AN ACT increasing exemptions to the interest and dividends tax and repealing the tax in
2025.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
Estimated Increase / (Decrease)
STATE: FY 2021 FY 2022 FY 2023 FY 2024
Appropriation $0 $0 $0 $0
Indeterminable Indeterminable Indeterminable
Revenue $0
Decrease Decrease Decrease
Expenditures $0 $0 $0 $0
Funding Source: [ X ] General [ ] Education [ ] Highway [ ] Other
METHODOLOGY:
The proposed bill would increase the Interest and Dividends tax exemptions for several taxable
periods and effective January 1, 2025, repeals the tax altogether. The table below shows current
law and changes contained in this bill for taxable years 2022 through 2024:
Exemption Current Applicable to Taxable Period Ending Taxable
Law Period After
12/31/2022 12/31/2023 12/31/2024 12/31/2024
Gross I&D threshold $2,400 $4,800 $7,200 $9,600 I&D Tax
requirements Repealed
(RSA 77:3, I)
Income exemption (RSA $2,400 $4,800 $7,200 $9,600 I&D Tax
77:5,I) Repealed
65 yrs of age or older $1,200 $2,400 $3,600 $4,800 I&D Tax
exemption (RSA 77:5, II) Repealed
Blind exemption (RSA $1,200 $2,400 $3,600 $4,800 I&D Tax
77:5,III) Repealed
Disabled exemption (RSA $1,200 $2,400 $3,600 $4,800 I&D Tax
77:5,IV) Repealed
The Department of Revenue Administration is not able to determine the exact impact of
increasing the Interest and Dividends Tax exemptions or repealing the tax as the Department
has no definitiv