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RSA 21-J Department of Revenue Administration

New Hampshire · 21-J · statute

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Contents: 87 provisions

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87 provisions

21-J:16 County Audits.

The accounting and reporting procedure for the auditing of county accounts, including each county's annual report, shall be uniform in all counties. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:17 Uniformity of Municipal Accounts.

The accounting officers of the several counties, cities, towns, school and village districts, and their departments, shall keep uniform accounts; provided, however, that any community that budgets on a July 1 to June 30 basis shall be permitted to budget teacher salaries on the same basis. Source. 1985, 204:1, eff. July 1, 1985; 368:4, eff. Jan. 1, 1986.

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21-J:18 Repealed by 1989, 399:2, II, eff. Aug. 4, 1989.

Repealed by 1989, 399:2, II, eff. Aug. 4, 1989.

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21-J:19 Audit.

I. Any town, or school district, or village district or precinct, at the annual meeting or at a special meeting, or the selectmen of any town, or the governing body of any city, or the school board of any school district, or the commissioners of any village district or precinct, may hire a certified public accountant or a public accountant licensed by the state under RSA 309-A:8 to conduct such an audit within one year after the close of the municipality's fiscal year in accordance with audit guidelines and applicable statutes. II. Every audit made by independent public accountants licensed under RSA 309-A:8, except examinations for special limited purposes, shall cover the accounts and records of all officials responsible for the receipt, custody, and disbursement of public funds. The audit reports shall include a summary of findings and recommendations regarding compliance with applicable statutory provisions of law, and the adequacy of accounting and business procedures pursued by the unit of government examined. Management letters, so-called, shall be included as part of the official audit findings and recommendations. Contracts executed between local units of government and counties and independent public accountants shall stipulate that all accounts and funds of the governmental unit are to be audited and a report of audit prepared in accordance with this section. A written or printed report of every completed audit shall be made to the proper local officials including a summary of the findings and recommendations of the auditors and a copy of such summary shall be published in the next annual report following the fiscal year in which the audit was completed. Source. 1985, 204:1. 2008, 174:1, eff. Aug. 10, 2008.

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21-J:20 Audit on Motion of Commissioner.

The commissioner may cause an audit to be made of the accounts of any city, town, school district, or village district or precinct, as often as once in 2 years, or whenever conditions appear to him to warrant such audit. The accounts of all county officers shall be audited annually by a certified public accountant, and a complete report of such audit shall be made available to the public. Source. 1985, 204:1. 2008, 174:2, eff. Aug. 10, 2008.

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21-J:20-a Notification Required; Failure to Complete Audit.

I. Upon completion of an audit made pursuant to RSA 21-J:19 or RSA 21-J:20, each city, town, school district, village district, county, or precinct shall provide notification to the department of the completed audit and a copy such audit shall be sent to the department. If a required audit is not completed by the due date of such audit, the commissioner may levy a fine of up to $250 per day for every day of noncompliance, commencing 90 days after the department has provided written notice to the municipality, political subdivision, or county of the intent to levy such fine. II. The municipality, political subdivision, or county may petition the commissioner for waiver of the fine in instances where the failure to complete a statutorily required audit by the due date of such audit was due to reasonable cause. If a waiver is granted, the municipality, political subdivision, or county shall within 90 days of receiving the waiver from the department provide the department an executed contract binding the municipality, political subdivision, or county, to conduct the required audit with an entity licensed and certified to do so, and within a time frame approved by the commissioner. Fines collected by the department pursuant to this section shall be deposited in the general fund. Source. 2022, 127:2, eff. May 27, 2022.

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21-J:21 Publication of Report of Audit.

A written or printed report of every completed audit shall be made to the proper local officials including a summary of the findings and recommendations of the auditors and a copy of such summary shall be published in the next annual report following the fiscal year in which the audit was completed. If, in the opinion of the governing board of a city or the selectmen, school board, county or village district commissioners, the whole report of audit should be published, the report may be published. If such summary of findings and recommendations is not so published, the commissioner, at the expense of the county, city, town, or district affected thereby, may cause such summary to be separately published and distributed or published in a newspaper having a general circulation in said county, city, town, or district. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:22 Expenses of Audit.

All reasonable expenses incurred by the department in conducting an audit shall be paid in the first instance from the appropriation for the department, but each county, city, town, school district, village district or precinct shall, upon notification by the commissioner of the amount due, reimburse it for such reasonable expenses as follows: I. Each county and city shall make reimbursement for all such reasonable expenses including salaries of members of the department for such time as said members have spent in said audit. II. Each town, school district, village district or precinct having an equalized valuation of $1,500,000 or more shall make reimbursement as provided in paragraph I. III. Each town, school district, village district or precinct having an equalized valuation of less than $1,500,000 shall make reimbursement for all reasonable expenses incurred in the audit including 1/2 of the salaries of members of the department for such time as the members have spent in said audit; provided, however, that in special cases where reimbursement under paragraphs II and III would result in hardship or in case of unusual circumstances, the commissioner is authorized to make such adjustment of said payments as he may deem to be for the best interests of the municipality concerned. The reimbursement shall be credited to the appropriation for the department. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:23 Expenses of Private Audit for Municipalities or Counties.

All expenses incurred by a municipality or county in connection with an audit conducted by a licensed public accountant or a certified public accountant shall be paid directly to the accountant by the municipality or county concerned. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:24 Technical Assistance to Municipalities.

The commissioner shall provide municipalities with technical assistance relative to taxation and finance, which shall not be binding upon the municipalities. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:24-a Revolving Fund Established for Municipal Officers and Employees Education and Training.

I. The commissioner shall establish a revolving fund in order to provide training for and to publish and distribute training and educational materials to municipal officers and employees. II. The nonlapsing revolving fund, which shall not exceed $5,000 on June 30 of each year, shall be established in the municipal and property division, department of revenue administration. Any amounts in excess of $5,000 on June 30 of each year shall be deposited into the general fund as unrestricted revenue. III. [Repealed.] IV. The money in this fund shall be used for the purpose of: (a) Purchasing, producing, or printing technical information of a nonbinding nature for distribution by the municipal and property division in conjunction with training seminars for local officials, town counsels, and professional auditors. Charges made shall be only in the amount necessary to pay the cost of producing or printing the technical assistance documents of a nonbinding nature or to reimburse the municipal and property division for the cost of purchased material. (b) Providing training to municipal employees in the areas of assessment, taxation, and finance. A reasonable charge shall be established for such training. This charge shall be fixed to reflect the cost of payments to experts to provide the training, the cost of written training materials, rented facilities, and advertising, and other indirect associated costs. Such training shall be conducted in geographically dispersed locations. (c) Printing training materials for distribution. A reasonable charge shall be established for each copy of a training document. This charge shall only be the amount necessary to pay the cost of producing such document. V. Funds received from the sale of any materials shall be credited to the fund established in this section. The receipts from such charges shall be used for no other purpose than the subsequent purchase, production, or printing of technical assistance documents of a nonbinding nature by the municipal and property division of the department of revenue administration. VI. The following persons shall not be charged for printed materials which are paid for by the fund: legislative committees and legislators who request printed materials. VII. The department of revenue administration shall provide an accounting for the expenditures and reimbursements in the department's annual report each year. Source. 1994, 337:1. 1996, 164:1, eff. Aug. 2, 1996. 2014, 78:2, eff. May 27, 2014; 161:2, 3, 6, eff. July 10, 2014.

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21-J:25 Powers of Magistrates to Issue Subpoenas in Proceedings of the Commissioner.

Justices of the peace and all other magistrates empowered to issue subpoenas and compel the attendance of witnesses in the courts of this state shall have the same power to compel their attendance and the production of evidence in any proceeding before the commissioner. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:26 Repealed by 2019, 346:157, I, eff. July 1, 2019.

Repealed by 2019, 346:157, I, eff. July 1, 2019.

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21-J:27 Rules of Evidence.

In any investigation or hearing, the commissioner shall not be bound by the technical rules of evidence. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:27-a Federal Tax Identification.

For the purpose of administering any state tax as allowed under 42 U.S.C. section 405, the commissioner of the department of revenue administration is authorized to require the submission of a social security number, a federal employer identification number, or any other identifying number used in filing or preparing federal tax returns by individuals, businesses, or return preparers. Source. 2003, 309:3. 2007, 150:1, eff. Aug. 17, 2007.

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21-J:28 Interest.

I. For all taxes administered by the department, interest on amounts not paid when due shall be computed at the annual underpayment rate determined from time to time pursuant to paragraph II from the prescribed payment date or original statutory due date to the date payment is actually made. Interest shall be allowed and paid at the annual overpayment rate determined from time to time pursuant to paragraph III upon any overpayment of taxes administered by the department. No interest shall be allowed or paid on amounts less than $10 unless specifically requested in writing. If any overpayment of tax administered by the department is refunded within 3 months after the due date or authorized extension date or within 3 months after the return is filed, whichever is later, no interest shall be allowed under this section. Interest on amounts not paid when due, or interest on overpayments shall be equal to the sum of the simple interest amounts computed with respect to each calendar year, or a portion thereof, during which the underpayment or overpayment remains outstanding. Interest with respect to only a portion of a calendar year shall be determined on a pro rata basis based on the number of days the underpayment or overpayment remains outstanding during the 365-day calendar year. Upon certification by the commissioner, the state treasurer shall refund the overpayment with interest from the revenue of the specific tax. I-a. In the case of an assessment of any tax, the department may prescribe a time not to exceed 30 days after notice of the original assessment or any reissued assessment during which, if any amount of the tax is paid, no interest shall be imposed on such amount for the period after notice of the original or reissued assessment. II. For purposes of this section, with respect to any calendar year, the term "annual underpayment rate" shall be determined by the commissioner and shall mean the underpayment rate specified in section 6621(a)(2) of the Internal Revenue Code of 1986 as in effect on the September 1 immediately preceding such calendar year plus 2 percentage points. III. For purposes of this section, with respect to any period, the term "overpayment rate" shall mean the underpayment rate determined under paragraph II with respect to such period year less 3 percentage points. Source. 1985, 204:1. 1991, 163:4. 1992, 13:1. 1995, 268:1, eff. July 1, 1997. 2021, 24:1, eff. May 6, 2021.

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21-J:28-a Refund of Taxes.

I. Except as otherwise provided by law, any claim for refund or credit of overpayment of taxes administered by the department shall be filed with the department in writing in such form as the department may by rule prescribe, and shall state the specific grounds upon which it is founded. II. After a claim for refund is filed, the department shall examine it and either issue the refund or grant the credit to the claimant, or issue a notice of complete or partial denial. After receipt of the department's decision, the claimant may file a written petition for reconsideration with the department as provided in RSA 21-J:28-b. III. With respect to any refund claim filed with the department pursuant to this section, the commissioner and the taxpayer may, in writing, agree to extend the time for action upon such claim for refund. IV. In the case of any refund or credit of more than $10 for overpayment of taxes administered by the department, the department shall apply the refund or credit as an offset to any liability with respect to any tax administered by the department. The department shall notify the taxpayer in the event of any such offset in tax. V. In all cases where it appears that a taxpayer has overpaid his or her tax and the overpayment is $10 or less, the department may, in its discretion, disregard the overpayment if the cost to the state to refund the overpayment would exceed the amount involved, unless the taxpayer has requested the refund. VI. The procedure outlined in this section and in RSA 21-J:28-b shall be the exclusive method by which taxpayers may challenge their liability for any tax, or the application to them of any provision of this chapter. Source. 1991, 163:5. 1994, 326:1. 2007, 150:2, eff. Aug. 17, 2007. 2022, 16:3, eff. Apr. 11, 2022.

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21-J:28-b Appeal for Redetermination or Reconsideration; Procedure.

I. Except as otherwise provided by law, any taxpayer against whom an assessment has been made by the department may petition for redetermination of such assessment within 60 days after notice of the assessment. II. Any taxpayer aggrieved by the denial of the department to make a refund requested pursuant to this chapter may petition for reconsideration of such claim for refund within 60 days after notice of such denial. II-a. Within 60 days of receipt of such petition for redetermination or reconsideration, the department shall examine such petition for redetermination or reconsideration, notify the applicant of any errors or omissions, request any additional information that the department is permitted by law to require, and notify the petitioner of the name, official title, address, and telephone number of a department official or employee who may be contacted regarding the petition. II-b. Within a reasonable time, not to exceed 120 days, after receipt of the petition for redetermination or reconsideration, or of the response to a timely request by the department pursuant to paragraph II-a, the department shall: (a) Approve or deny the petition for redetermination or reconsideration, in whole or in part, on the basis of nonadjudicative processes, if disposition of the petition for redetermination of reconsideration by the use of these processes is not precluded by any provision of law; or (b) Commence an adjudicative proceeding in accordance with RSA 541-A. III. After a hearing on such petition for redetermination or reconsideration, the department shall issue a notice of decision affirming, increasing, or decreasing the tax. Any increase ordered by the commissioner shall be assessed against the taxpayer and shall carry interest as prescribed in RSA 21-J:28. Any refund or credit for overpayment ordered by the commissioner shall, with interest pursuant to RSA 21-J:28 from the date the tax was paid, be paid or credited to the taxpayer in the manner provided in RSA 21-J:28-a, IV. IV. Within 30 days of the notice of decision, the taxpayer may appeal such decision by written application to the board of tax and land appeals or the superior court, in the county in which the taxpayer resides or has a place of business or resident agent. The board of tax and land appeals or the superior court, as the case may be, shall hear the appeal de novo. Each party may introduce whatever evidence it believes necessary, limited only by the evidentiary rules of the forum. Legal issues shall be limited to those raised before the commissioner, with the exception that the taxpayer may raise additional legal claims addressing constitutional issues, and either party may raise additional legal claims upon a showing of good cause. V. The board or court may require the taxpayer to provide a bond payable to the state with surety in a sum fixed by the board or court conditioned upon the amount of taxes found to be due and to become due during the pending of the appeal. VI. The board or court may grant such relief as may be just and equitable and may order the state treasurer to pay the taxpayer the amount of relief granted with interest at the rate established under RSA 21-J:28. The board or court may award reasonable costs and attorney's fees to the prevailing party, provided the prevailing party shows substantially unjustified action. VII. Compliance with the filing deadlines in this section relative to the department or the board of tax and land appeals shall be in accordance with RSA 80:55. VIII. The department shall bear the burden of proof on any change to any compensation deduction under RSA 77-A determined by examination. Source. 1991, 163:5; 362:11. 2000, 239:4. 2002, 232:18. 2003, 133:1. 2010, 152:3. 2011, 207:3, eff. June 25, 2011. 2018, 279:15, eff. Jan. 1, 2019.

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21-J:28-c Liens.

I. Notwithstanding the provisions of any other law, with respect to the collection of any tax administered by the department, the department shall cause a certified copy of the notice and demand for payment of such tax, penalties and interest to be filed in accordance with RSA 454-B:2 and such filing and service of the notice and demand shall constitute a lien upon the real estate, personal estate, property interest, right or credit to which the notice and demand relates, or which may be subsequently discovered. II. If the party liable for such tax, penalties, or interest neither resides in nor owns property in this state, then the notice and demand in paragraph I of this section shall be filed with the secretary of state and shall constitute a lien in the manner as provided in paragraph I. III. Any lien filed pursuant to this section shall continue and shall be valid and binding until the liability for the sum, with interest, costs and attorney's fees is satisfied or 6 years from the date such lien is filed, whichever is earlier. IV. In the event the liability, interest, costs, and attorney's fees are not satisfied before the end of the original term of the lien, any lien filed pursuant to this section may be renewed for the same term as the original term of the lien by refiling according to the procedures set forth in paragraphs I-III. V. A bankruptcy filing by a taxpayer shall not affect the validity of any lien properly filed or renewed in accordance with this section. Source. 1991, 163:5. 1992, 13:2. 2005, 86:1. 2007, 150:3, eff. Aug. 17, 2007.

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21-J:28-d Distraint.

Upon neglect or refusal of any person or corporation to pay the taxes assessed upon them, the department may distrain the personal estate, property interest, right or credit of such person or corporation. Source. 1991, 163:5, eff. May 27, 1991.

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21-J:28-e Fraudulent Investment Scheme; Refund Request Procedure.

I. Notwithstanding any other provision of law, any taxpayer aggrieved by a fraudulent investment scheme may petition for a refund of overpayment of taxes resulting from a fraudulent investment scheme for which an amended federal tax return has been filed claiming a theft loss for the fraudulent investment scheme under Internal Revenue Code section 165. Such petition for refund of overpayment of taxes shall be made within 180 days of the taxpayer filing the amended federal tax return. II. For purposes of this section, "fraudulent investment scheme" means a transaction in which the party perpetrating the fraud receives cash or property from investors, purports to earn income for the investors, and reports to the investors income amounts that are wholly or partially fictitious. In a fraudulent investment scheme the party perpetrating the fraud criminally appropriates some or all of the investors' cash or property. III. After a petition for refund is filed, the department shall examine the petition and either issue a notice of refund or credit to the claimant or issue a notice of denial. After receipt of the department's decision, the claimant may file a written petition for reconsideration with the department as provided in RSA 21-J:28-b. Source. 2012, 154:1, eff. June 7, 2012.

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21-J:29 Statute of Limitations; Exceptions.

I. (a) Except as otherwise provided, all taxes administered by the department shall be assessed within 3 years after the return is filed or within 3 years after the last day prescribed by law for filing such return, whichever is later, or in the event no return is required, within 3 years from the date the tax is due or paid, whichever is later. In the case in which a return is required, the 3-year period shall commence with the filing of an original return and shall not be affected by the filing of an amended return. (b) Except as otherwise provided, any claim for a refund or credit shall be made within 3 years from the due date of the tax upon which such refund is claimed or within 2 years from the date the tax was paid, whichever is later. (c) Notwithstanding subparagraph I(b), any claim for a refund or credit of taxes, penalties or interest paid as a result of an assessment or demand for payment shall be made within 3 years of the due date of the tax upon which such refund is claimed. (d) Notwithstanding subparagraphs I(b) and (c), any claim for a refund or credit of taxes based upon a claim that the tax or any provision thereof is unconstitutional under the federal or state constitution shall be made within 120 days of the due date of the tax upon which such refund is claimed. (e) Notwithstanding subparagraphs I(b), (c), and (d), in the case of a petition for refund of overpayment of taxes based upon a claim of a fraudulent investment scheme under RSA 21-J:28-e, the petition for a refund shall be made within 180 days of the taxpayer filing an amended federal tax return claiming a theft loss for the fraudulent investment scheme under Internal Revenue Code section 165. II. (a) In the case of any failure to make or file a return or declaration of consideration for any tax administered by the department, the tax may be assessed at any time. (b) In the case of a willful attempt in any manner to evade any tax administered by the department the tax may be assessed at any time. (c) If a taxpayer omits from gross income or gross business profits an amount properly includable therein which is in excess of 25 percent of the amount of gross income or gross business profits stated in the return or understates the value of consideration for the transfer of real property in an amount which is in excess of 25 percent of the total consideration for such transfer, the department may assess the tax at any time within 6 years after the return or declaration of consideration was filed. III. With respect to any tax to which the limitation period provided in paragraph I or subparagraph II(c) shall apply and such period has not expired, the commissioner and the taxpayer may, in writing, agree to extend such period. IV. Where the assessment of any tax administered by the department has been made within the applicable period of limitation, such tax may be collected by lien or by a proceeding in court, but only if the lien is made or the proceeding commenced within 12 years of the assessment of the tax. Source. 1985, 204:1. 1991, 163:6. 1994, 326:2, 3. 2007, 150:4, eff. Aug. 17, 2007. 2012, 154:2, eff. June 7, 2012.

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21-J:30 General Application.

Except as otherwise provided, the interest and penalties specified in this subdivision are applicable to all taxes administered by the department. Source. 1985, 204:1, eff. July 1, 1985.

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21-J:31 Penalty for Failure to File.

Any taxpayer who fails to file a return when due, unless an extension has been granted by the department, shall pay a penalty equal to 5 percent of the amount of the tax due or $10, whichever is greater, for each month or part of a month during which the return remains unfiled. The total amount of any penalty shall not, however, exceed 25 percent of the amount of the tax due or $50, whichever is greater. This penalty shall not be applied in any case in which a return is filed within the extended filing period as provided in RSA 77-A:9, RSA 77-E:8, RSA 83-C:6, RSA 84-A:7, or RSA 84-C:7, or the failure to file was due to reasonable cause and not willful neglect of the taxpayer. The amount of the penalty is determined by applying the percentages specified to the net amount of any tax due after crediting any timely payments made through estimating or other means. Source. 1985, 204:1. 1991, 163:7; 299:3; 390:4. 1993, 4:2; 350:2. 1997, 347:1. 2003, 223:12, eff. July 1, 2003. 2017, 156:225, eff. Jan. 1, 2019. 2021, 91:92, eff. Jan. 1, 2025.

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21-J:32 Penalty for Underpayment of Estimated Tax.

I. Except as provided in paragraph IV, in the case of any underpayment of estimated tax by a taxpayer, there shall be added to the tax for the taxable period an amount determined at the underpayment rate as determined from time to time pursuant to RSA 21-J:28, II, on the amount of the underpayment for the period of the underpayment. II. For the purposes of paragraph I, the amount of the underpayment shall be the excess of: (a) The amount of the installment which would be required to be paid if the estimated tax were equal to 90 percent of the tax for the taxable period; over (b) The amount, if any, of the installment paid on or before the last date prescribed for payment. II-a. For purposes of this section, "taxable period" means the calendar year or fiscal year which the taxpayer uses for federal income tax purposes, or that part of a year for which a return is made. III. The period of the underpayment shall run from the date the installment was required to be paid to whichever of the following dates is the earlier: (a) The due date of the return; or (b) With respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this paragraph, a payment of estimated tax on any installment date shall be considered a payment of any previous underpayment only to the extent such payment exceeds the amount of the installment determined under subparagraph II(a). IV. Notwithstanding the provisions of paragraphs I, II, and III, the penalty with respect to any installment shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the lesser: (a) The tax shown on the return of the taxpayer for the preceding taxable year, if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and such preceding year was a taxable year of 12 months. (b) An amount equal to the tax computed at the rates applicable to the taxable year but otherwise on the basis of the facts shown on the return of the taxpayer for, and the law applicable to, the preceding taxable year. (c)(1) An amount equal to 90 percent of the tax for the taxable year computed by placing on an annualized basis the taxable income: (A) For the first 3 months of the taxable year, in the case of the installment required to be paid in the fourth month, (B) For the first 3 months or for the first 5 months of the taxable year, in the case of the installment required to be paid in the sixth month. (C) For the first 6 months or for the first 8 months of the taxable year, in the case of the installment required to be paid in the ninth month, and (D) For the first 9 months or for the first 11 months of the taxable year, in the case of the installment required to be paid in the twelfth month of the taxable year. (2) For purposes of this paragraph, the taxable income shall be placed on an annualized basis by: (A) Multiplying by 12 the taxable income referred to in subparagraph IV(c)(1), and (B) Dividing the resulting amount by the number of months in the taxable year, whether 3, 5, 6, 8, 9, or 11, as the case may be, referred to in subparagraph IV(c)(1). (d) No amount, if this is the first tax period for which the taxpayer is required to file a tax return. V. [Repealed.] VI. Notwithstanding any other provisions of this section, if a taxpayer fails to pay taxes when they are due and is subsequently penalized under RSA 21-J:33 for his failure to pay, the failure to pay shall not be considered an underpayment of estimated tax, and no penalty shall be imposed upon the taxpayer under this section. Source. 1985, 204:1; 414:10. 1988, 232:5. 1989, 50:2. 1991, 163:8, 9, 43, I. 1995, 268:2. 1999, 163:1, eff. Aug. 29, 1999. 2012, 14:1, eff. Dec. 31, 2012.

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21-J:33 Penalties for Failure to Pay.

In addition to amounts due under this subdivision, penalties shall be imposed for failure to pay taxes when, and as, due as follows: I. If the failure to pay is not due to fraud, the penalty shall be equal to 10 percent of the amount of the nonpayment or underpayment. This penalty shall not be applied in any case in which the failure to pay was due to reasonable cause and not willful neglect of the taxpayer. II. If the failure to pay is due to fraud, the penalty shall be 50 percent of the amount of the nonpayment or underpayment. If a penalty is imposed under this paragraph, no addition to tax shall be imposed under this subdivision for the same nonpayment or underpayment. III. In the case of any failure to comply with the electronic payment requirements under RSA 21-J:3, XXI, a penalty shall be added to the amount of tax due equal to 5 percent of the amount of such tax not to exceed $5,000. This penalty is in addition to any other penalty that may be applicable and shall be assessed, collected, and paid in the same manner as taxes. The penalty in this paragraph shall not apply if failure to pay was due to reasonable cause and not willful neglect of the taxpayer. Source. 1985, 204:1. 2001, 158:71. 2010, 152:4, eff. Aug. 13, 2010.

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21-J:33-a Substantial Understatement Penalty.

I. If there is a substantial understatement of tax imposed under RSA 77-A, RSA 77-E, RSA 78-A, RSA 78-C, RSA 82-A, RSA 83-C, or RSA 84-A for any taxable period, there shall be added to the tax an amount equal to 25 percent of the amount of any underpayment attributable to such understatement. II. For the purposes of this section, there is a substantial understatement of tax for any taxable period if the amount of the understatement for the taxable period exceeds the greater of: (a) 10 percent of the tax required to be shown on the return for the taxable period; or (b) $5,000. III. For the purposes of paragraph II, the term "understatement" means the excess of: (a) The amount of the tax required to be shown on the return for the taxable period, over (b) The amount of the tax imposed which is shown on the return. IV. The amount of the understatement as defined in paragraph III shall be reduced by that portion of the understatement which is attributable to: (a) The tax treatment of any item by the taxpayer if there is or was substantial authorization for such treatment; or (b) Any item with respect to which the relevant facts affecting the item's tax treatment are adequately disclosed in the return or in a statement attached to the return. Source. 1991, 163:10; 299:4; 390:5. 1993, 4:3; 350:3. 1997, 347:2, eff. April 29, 2001. 2014, 158:10, eff. June 30, 2014. 2017, 156:226, eff. Jan. 1, 2019. 2021, 91:93, eff. Jan. 1, 2025.

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21-J:33-b Understatement of Taxpayer's Liability by Tax Preparer.

I. The term "tax preparer," as used in this section, shall include any person who prepares for compensation, or who employs one or more persons who prepare for compensation, any return of taxes administered by the department, or any claim for refund of such taxes. The preparation of a substantial portion of a return or claim for refund shall be treated as if it were the preparation of such return or claim for refund. II. A person shall not be a "tax preparer" for purposes of this section merely because such person: (a) Furnishes typing, reproducing, or other mechanical assistance; (b) Prepares a return or claim for refund of the employer, or of an officer or employee of the employer, by whom he is regularly and continuously employed; (c) Prepares as a fiduciary a return or claim for refund for any person; or (d) Prepares a claim for refund for a taxpayer in response to any notice of deficiency issued to a taxpayer. III. If any part of any understatement of liability with respect to any return or claim for refund is due to the willful neglect or intentional disregard of statutes and rules by a person who is a tax return preparer with respect to such return or claim, such person shall pay a penalty of $1,000 with respect to such return or claim. IV. If any part of any understatement of liability with respect to any return or claim for refund is due to a willful attempt in any manner to understate the liability for a tax by a person who is a tax return preparer with respect to such return or claim, such person shall pay a penalty of $2,000 with respect to such return or claim. With respect to any return or claim, the amount of the penalty payable by a person by reason of this paragraph shall be reduced by the amount of the penalty paid by such person by reason of paragraph III. V. For purposes of this section, the term "understatement of liability" means any understatement of the net amount payable with respect to any tax imposed or any overstatement of the net amount creditable or refundable with respect to any such tax. Except as otherwise provided in paragraph VI, the determination of whether or not there is an understatement of liability shall be made without regard to any administrative or judicial action involving the taxpayer. VI. If at any time there is a final administrative determination or a final judicial decision that there was no understatement of liability in the case of any return or claim for refund with respect to which a penalty under this section has been assessed, such assessment shall be abated, and if any portion of such penalty has been paid the amount so paid shall be refunded to the person who made such payment as an overpayment of tax without regard to any period of limitation which would apply to the making of such refund. VII. The amount of the understatement as defined in paragraph V shall be reduced by that portion of the understatement which is attributable to the tax treatment of any item with respect to which the relevant facts affecting the item's tax treatment are adequately disclosed in the return or in a statement attached to the return. VIII. The commissioner shall have the authority under this chapter and RSA 80 to administer and enforce this section. IX. Any person penalized under RSA 21-J:33-c shall not also be subject to any penalties under this section. Source. 1991, 163:10, eff. May 27, 1991.

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21-J:33-c Penalties for Aiding and Abetting Understatement of Tax Liability.

I. Any person shall pay a penalty with respect to each return in each tax period in the amount of $1,000, who: (a) Aids or assists in, procures, or advises with respect to, the preparation or presentation of any portion of a return, affidavit, claim, or other document in connection with any matter arising under statutes and rules administered by the department; and (b) Knows that such portion will be used in connection with any material matter arising under statutes and rules administered by the department; and (c) Knows that such portion, if so used, will result in an understatement of liability for tax of another person. II. For the purposes of this section: (a) The term "procures" shall mean ordering or causing a subordinate to do an act. (b) The term "subordinate" includes any other person over whose activities the person has direction, supervision or control, whether or not a director, officer, employee, or agent of the taxpayer involved. (c) The term "understatement of liability" means any understatement of the net amount payable with respect to any tax imposed or any overstatement of the net amount creditable or refundable with respect to any such tax. (d) A person furnishing typing, reproducing or other mechanical assistance shall not be treated as having aided or assisted in the preparation of any portion of a return, affidavit, claim, or other document. III. This penalty shall apply whether or not the understatement is with the knowledge or consent of the persons authorized or required to present the return, affidavit, claim or other document. IV. The commissioner shall have the authority under this chapter and RSA 80 to administer and enforce this section. V. When the amount of the understatement of liability, which is attributable to the tax treatment of any item with respect to the relevant facts affecting the item's tax treatment, is adequately disclosed in the return or in a statement attached to the return, then this penalty shall not apply. VI. Any person penalized under RSA 21-J:33-b shall not also be subject to any penalties under this section. Source. 1991, 163:10, eff. May 27, 1991.

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21-J:34 Reports Required.

The governing body of each city, town, unincorporated town, unorganized place, school district, and village district, and the clerk of each county convention shall submit to the commissioner of revenue administration the following reports necessary to compute and establish the tax rate for each city, town, unincorporated town, unorganized place, school district, village district and county. The commissioner shall adopt rules under RSA 541-A establishing the form and content of these reports: I. A report filed by the governing body of each city, town, or unincorporated place, shall certify the number of residents and total valuation of each class of property included in the inventory of residents and ratable estates. This report shall be filed by September 1 of each year, unless this filing date is extended by the commissioner for just cause. II. A report filed by the governing body of each city, town, unincorporated town, unorganized place, school district, and village district shall certify the appropriations voted by the meeting of the appropriate legislative body, whether city or town council, mayor and council, or mayor and board of aldermen, at each annual or special town, school district, or village district meeting. This report shall be filed within 20 days of the close of the meeting. III. A report filed by the governing body of each city, town, school district, and village district shall revise all the estimated revenues for the year. This report shall be filed by September 1 of each year. IV. The minutes of the appropriate legislative body, whether city or town council, mayor and council, or mayor and board of aldermen, at which appropriations are voted or rescinded, and each annual and special town, school district, and village district meeting shall be certified by the clerk. Such minutes shall be filed within 20 days of the date of the close of the meeting of the appropriate legislative body at which appropriations are voted or rescinded. IV-a. For municipalities which have elected to vote by official ballot either through adoption of a charter or through the adoption of RSA 40:12-14, the minutes of any meeting or any deliberative session of a municipality's legislative body at which any appropriations may be amended, voted, or rescinded shall be certified by the clerk. Such minutes shall be filed within 20 days after the date of the close of the meeting of the municipality's legislative body at which appropriations may be amended, voted, or rescinded. IV-b. For municipalities which have elected to vote by official ballot either through adoption of a charter or through the adoption of RSA 40:12-14, the clerk shall also forward a sample of the official ballot and shall certify the counts on each ballot question. The counts may be certified by noting the count on the official ballot sample or by submitting minutes in any other format approved by the commissioner. V. A financial report for each city, town, school district, village district, or county shall be filed showing the summary of receipts and expenditures, according to uniform classifications, during the preceding fiscal year, and a balance sheet showing assets and liabilities at the close of the year. This report shall be submitted on or before April 1 if the municipality keeps its accounts on a calendar year basis, or on or before September 1 if the municipality keeps its accounts on an optional fiscal year basis pursuant to RSA 31:94-a. School districts shall submit financial reports on or before September 1 of each year. VI. (a) The governing body of the town, school district, or village district, or the budget committee in towns operating under the municipal budget law, shall file the budget within 20 days of the close of the annual or special meeting. (b) The governing body of a city shall file the budget within 20 days of the adoption of any budget resolution. (c) The governing body of a town which has adopted a charter pursuant to RSA 49-B and does not have a budgetary town meeting, shall file the budget within 20 days of the adoption of any budget resolution. VII. If a special town, school district, or village district meeting is held, the governing body shall submit, within 20 days of the close of the special meeting, a copy of the petition to superior court requesting permission to hold a special meeting and a copy of the decree from the superior court granting permission to hold a special meeting. VIII. The governing body of the town, school district, or village district shall file, within 20 days of the close of the annual or special meeting, a copy of the warrant posted for the annual or special meeting. IX. The governing body of the town shall file, within 20 days of the close of the annual meeting, a copy of the annual town report. X. If a city, town, school district, village district, or county is audited by an independent public accountant, it shall submit a copy of the audited financial statements in accordance with RSA 21-J:19, II. XI. The budget as presented to the county convention shall be filed by the clerk of the county convention by September 1 of the fiscal year to which the budget relates. XII. A report filed by the clerk of the county convention shall certify the appropriations voted at the county convention, along with estimated revenues. This report shall be filed by September 1 of the fiscal year to which the report relates. XIII. The minutes of the county convention shall be certified by the clerk of the county convention. Such minutes shall be filed by September 1 of the fiscal year to which the minutes relate. XIV. In the case of a supplemental county appropriation, pursuant to RSA 24:14-a, the clerk of the county convention shall file the budget, report of appropriations voted and estimated revenues, and the minutes of the convention vote on the supplemental appropriation, within 20 days of the close of the meeting. XV. [Repealed.] Source. 1987, 285:4. 1989, 399:1. 1991, 269:4-7. 1996, 164:2. 1998, 192:1. 1999, 17:9. 2000, 239:9. 2001, 71:1. 2003, 307:2. 2007, 182:2, eff. April 1, 2007.

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21-J:35 Setting of Tax Rates by Commissioner.

I. The commissioner of revenue administration shall compute and establish the tax rate of each town, city, or unincorporated place. Any assessments report issued by the commissioner pursuant to RSA 21-J:11-a shall not delay or otherwise affect the setting of the tax rate for that municipality. II. To compute and establish the tax rates of towns, cities and unincorporated places under paragraph I, the commissioner shall examine the reports required under RSA 21-J:34 to ensure that: (a) All appropriations have been made in a manner which is consistent with procedural requirements established by statute. (b) No appropriations have been made which are prohibited by statute. (c) All revenues have been estimated accurately and in a manner which is not prohibited by statute. (d) All calculations are correct. III. If the commissioner finds that appropriations were made in a manner which is inconsistent with statute he shall delete the appropriation or that portion in question. IV. If the commissioner finds that the estimated revenues included are inaccurate or inappropriate he shall adjust the estimates in question. V. The commissioner shall notify in writing the governing body of each city or town of the rate he has established. This notification shall include a detailed explanation of all changes made in the appropriations or revenue estimates submitted by the municipality or district in question. VI. Any town, city, or unincorporated place which is dissatisfied with the tax rate set under this section may, within 10 days of notification, request an oral hearing on this matter before the commissioner of revenue administration. If such a request is made, the commissioner shall promptly schedule and conduct a hearing pursuant to rules he shall adopt under RSA 541-A. After hearing, the decision of the commissioner shall be final. VII. On or before October 1 of each year, the following state agencies shall provide the department of revenue administration estimates of local aid to be distributed to municipalities and school districts in the current fiscal year for the following local aid programs: (a) State treasury: meals and rooms distribution pursuant to RSA 78-A:26. (b) Department of transportation: highway construction aid pursuant to RSA 235:23. (c) Department of environmental services: water pollution control grants pursuant to RSA 486, water filtration grants pursuant to RSA 486-A, and landfill closure grants pursuant to RSA 149-M:43. (d) Department of education: federal forest land aid pursuant to RSA 227-H:20 through RSA 227-H:22, state aid for an adequate education pursuant to RSA 198:40-a, school building aid pursuant to RSA 198:15-a, and special education aid pursuant to RSA 186-C:18. Source. 1987, 285:4. 2001, 158:57. 2003, 307:9, eff. July 1, 2003. 2014, 76:1, eff. July 26, 2014. 2017, 156:101, eff. July 1, 2017.

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21-J:36 Repealed by 2007, 182:7, I, eff. April 1, 2007.

Repealed by 2007, 182:7, I, eff. April 1, 2007.

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21-J:37 Service Exemptions Added to Appropriations.

Selectmen and assessors shall total the amount to be credited to veterans upon their tax bills, when the same has been determined, and add the same to the total amount of appropriations voted by the town or city as certified to the commissioner of revenue administration under RSA 21-J:34, for the purpose of computing the tax rate. Source. 1987, 285:4, eff. July 1, 1987.

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21-J:38 Transferee Liability.

The liability, at law or in equity, of a transferee of property of a taxpayer for any tax administered by the department and any addition to tax, penalty or interest with respect to such tax, shall be assessed, paid and collected in the same manner and subject to the same provisions and limitations as in the case of the tax to which the liability relates, except as otherwise provided in this chapter. Transferee liability shall arise in cases in which the transfer is without adequate consideration, would render the transferor insolvent, or would render the transferor without sufficient property in New Hampshire to cover the amount of his tax liability. The term "transferee" includes, but is not limited to, donee, heir, legatee, devisee and distributee. If any person is deceased, the period of limitation for assessment against such person shall be the period that would be in effect had death not occurred. Source. 1991, 163:11, eff. May 27, 1991.

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21-J:38-a Sham Transactions May Be Disallowed.

I. The commissioner may disallow any sham transaction in ascertaining any taxpayer's tax liability. With respect to transactions between members of a controlled group, the taxpayer shall bear the burden of establishing by a preponderance of the evidence that a transaction or a series of transactions between the taxpayer and one or more members of the controlled group was not a sham transaction. For all other taxpayers, the commissioner shall bear the burden of establishing by a preponderance of the evidence that a transaction or series of transactions was a sham transaction. II. In administering any tax, the commissioner may apply the doctrines of economic reality, substance over form, and step transaction. III. If the commissioner disallows a sham transaction under paragraph I, the applicable limitation period for assessing the tax, together with applicable penalties, charges, and interest, shall be extended for a period equal to the applicable limitation period. Nothing in this paragraph shall be construed as extending an applicable limitation period for claiming any refund of a tax. IV. The commissioner may adopt rules under RSA 541-A that are necessary to administer this section, including rules establishing criteria for identifying sham transactions. V. In this section: (a) "Controlled group" means 2 or more person related in such a way that one person directly or indirectly owns or controls the business operation of another member of the group. (b) "Sham transaction" means a transaction or series of transactions without economic substance because there is no business purpose or expectation of profit other than obtaining tax benefits. (c) "Tax" includes any tax administered by the commissioner. (d) "Taxpayer" includes any person or entity subject to a tax. Source. 2005, 177:139, eff. July 1, 2005.

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21-J:39 Criminal Penalties.

I. (a) The term "person," as used in this section, shall include, but not be limited to, an officer or employee of a corporation, a member, officer or employee of a partnership, or a trustee, member or employee of a trust who as such trustee, member or employee is under a duty either to perform or to refrain from performing the act with respect to which the violation occurs. This section shall apply to persons acting in any fiduciary capacity. (b) The term "willfully," as used in this section, shall have the same meaning as provided in RSA 626:2, IV. II. With respect to any tax administered by the department, no person shall: (a) Willfully attempt in any manner to evade any tax or the payment thereof; (b) Willfully fail to collect or truthfully account for and pay over any tax which such person is required to collect, account for, and pay over to the department; (c) Willfully fail to pay any estimated tax or taxes, to make a return, report or declaration, to keep records, or to supply any information, which such person is required to do under any tax law or under rules adopted under authority of such law, to pay such estimated tax or taxes, to make such return, report or declaration, to keep such records, or to supply such information, at the time or times required by statute or rules, except that in the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under RSA 21-J:32 or 33 with respect to such failure; (d) Willfully make and subscribe any return, report, statement, or other document, that contains or is verified by a written declaration that it is made under the penalties of perjury, and that he does not believe to be true and correct as to every material matter; (e) Aid or assist in, or procure, counsel, or advise the preparation of or presentation under, or in connection with any matter arising with respect to the taxes administered by the department, a return, affidavit, claim, or other document, which the person knows is fraudulent or false as to any material matter, whether or not such falsity or fraud is with the knowledge and consent of the person authorized or required to present such return, affidavit, claim, or document; (f) Willfully simulate or falsely or fraudulently execute or sign any bond, license, permit or other document required by the department with respect to the taxes administered by it or by any rule adopted relative to such taxes, or willfully procure such documents to be falsely or fraudulently executed or advise, aid in, or connive at such execution; (g) Willfully remove, deposit, or conceal, or direct the removing, depositing, or concealing of any goods, chattels, or commodities for or in respect to any tax which is or is to be imposed, or any property upon which levy or distraint is authorized by RSA 80 or RSA 21-J with intent to evade the assessment or collection of any tax; (h) In connection with the preparation of a tax return for another, the filing of a tax return or the payment of any tax, receive money from such other person on the understanding that it is to be paid over to the department to discharge, in whole or in part, such other person's tax liability and to willfully fail to pay over the same to the department; (i) With intent to defraud or willfully attempt to evade the tax: (1) Alter, forge, make or counterfeit any stamp or other device prescribed by law for the collection or payment of any tax, or sell, lend, or have in his possession any such altered, forged, or counterfeited stamp or other device, or make, use, sell, or have in his possession any material in imitation of the material used in the manufacture of such stamp or other device; or (2) Use more than once any stamp or other device, or alter the cancellation or defacing marks of, or otherwise prepare for reuse any stamp or other device; or (3) Tamper with or cause to be tampered with any metering machine authorized by any tax law or rules adopted under the authority of such tax law; (j) Willfully deliver or disclose to the department any list, return, account, statement, declaration, or other document, known by him to be fraudulent or to be false as to any material matter; (k) Willfully corrupt or by force or threat of force, including any threatening letter or communication, endeavor to obstruct or impede an officer or employee of the state acting in an official capacity under this chapter, or in any other way corrupt or by force or threats of force, including any threatening letter or communication, obstruct or impede, or endeavor to obstruct or impede, the due administration of any tax administered by the department. The term "threats of force," as used in this subparagraph, means threats of bodily harm to the officer or employee of the department or to a member of his family; (l) When required by any tax law or rules adopted under the authority of such tax law to obtain any license or permit: (1) Willfully fail to register or apply for such license or permit; or (2) Willfully sell, offer for sale, or possess with intent to sell, any product for which a license or permit is required without registering or obtaining such license or permit; or (3) Willfully sell or offer to sell any product for which a license or permit is required to sell such product, to any person required to be licensed who does not possess a valid license issued by the department; or (4) Willfully operate any business, hotel or restaurant or collect tax without registering or obtaining the required license, or operate any such business, hotel or restaurant after the department has suspended, revoked, or refused to issue such license or permit. III. (a) Any natural person who violates subparagraph II(a), (b), (d), (e), (i) or (k) shall be guilty of a class B felony and shall be fined as provided in RSA 651:2. (b) Any other person who violates subparagraph II(a), (b), (d), (e), (i) or (k) shall be guilty of a felony and shall be fined as provided in RSA 651:2. (c) Any natural person who violates subparagraph II(c), (f), (g), (h), (j), or (l) shall be guilty of a misdemeanor and shall be fined as provided in RSA 651:2. (d) Any other person who violates subparagraph II(c), (f), (g), (h), (j), or (l) shall be guilty of a misdemeanor and shall be fined as provided in RSA 651:2. IV. (a) No person, except elected officials making appraisals pursuant to RSA 75:1, shall willfully engage in making appraisals of a municipality for tax assessment purposes, unless such person is certified as provided in RSA 310-C. (b) No person engaged in making appraisals of a municipality for tax assessment purposes shall willfully fail to maintain and provide the department access to the records required to be kept pursuant to rules adopted by the assessing certification board pursuant to RSA 310-C. (c) Any person who violates subparagraph (a) or (b) shall be guilty of a class B misdemeanor. Source. 1991, 163:11. 2001, 297:5. 2004, 203:9, eff. June 11, 2004. 2022, 267:4, eff. Jan. 1, 2023.

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21-J:40 Taxpayer Information Statements.

I. The commissioner shall prepare taxpayer information statements which set forth in simple, nontechnical terms: (a) The rights of a taxpayer and the obligations of the department during an audit. (b) The procedures by which a taxpayer may appeal any adverse decision of the department, including administrative and judicial appeals. (c) The procedures for filing and processing refund claims. (d) The procedures which the department may use in enforcing the revenue provisions of the laws of the state. II. The statements prepared in accordance with paragraph I shall be distributed by the department to a taxpayer: (a) When the taxpayer is first contacted by the department for an examination of the taxpayer's records; for an assessment of taxes, penalties or interest; or for a demand for payment of taxes, penalties or interest; (b) When requested by a taxpayer; or (c) Any time the department deems it necessary. Source. 1991, 163:11, eff. May 27, 1991.

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21-J:41 Taxpayer Communications With Department.

I. In any communication with the department, the taxpayer shall have the following rights: (a) The right to make an audio recording of any meeting relating to the determination or collection of any tax with the department representative, using the taxpayer's own equipment, and at the taxpayer's own expense. (b) If the department makes an audio recording of the meeting, the right to request a copy of the recording. The taxpayer shall reimburse the department the reasonable costs of the copy. (c) The right to contact and consult with an attorney, certified public accountant, public accountant, or any other person authorized to represent a taxpayer at any meeting with the department, if the taxpayer clearly states to the department representative at any time during any meeting, that the taxpayer wishes to consult with the person. (d) The right to be represented by any attorney, certified public accountant, public accountant, or any other person authorized to represent the taxpayer before the department who is not disbarred or suspended from practice. (e) The right not to be present if represented at the meeting, unless subpoenaed by the department. (f) The right to an explanation, in any initial notice or other initial communication of a deficiency, delinquency or other writing that is communicating an underpayment of tax, of the basis for the underpayment, interest, and penalties. II. Such rights in paragraph I shall include, but not be limited to, audits, conferences, interviews and hearings. III. Such rights may be waived by the taxpayer. Source. 1991, 163:11, eff. May 27, 1991.

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21-J:42 Abatement of Penalty or Addition to Tax Due to Erroneous Written Advice by Department.

The commissioner shall abate any penalty or addition to tax attributable to erroneous advice furnished to the taxpayer in writing by a representative of the department acting in such representative's official capacity. The provision shall apply only if: I. The written advice was reasonably relied upon by the taxpayer and was in response to a specific written request of the taxpayer; and II. The portion of the penalty or addition to tax did not result from a failure by the taxpayer to provide adequate or accurate information. Source. 1991, 163:11, eff. May 27, 1991.

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21-J:43 Authority to Enter Into Written Installment Payment Agreements.

The department may enter into written installment payment agreements if it determines that the agreement facilitates collection of delinquent taxes, penalties, and interest owed. The department may modify or terminate an installment payment agreement if it determines that the financial condition of the taxpayer has sufficiently changed or that the taxpayer has not complied with the terms of the installment agreement. The department shall give written notice to the taxpayer at least 30 days before the action terminating or modifying the installment payment agreement. Source. 1991, 163:11. 2009, 144:270, eff. July 1, 2009. 2014, 78:3, eff. May 27, 2014.

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