On September 8, New Hampshire DRA issued TIR 2014-005 clarifying certain changes related to the carry over period of any unused Business Enterprise Tax (“BET”) credits. Under the New Hampshire business tax provisions, BET paid by an enterprise is allowed as a credit against any Business Profits Tax (“BPT”) liability for a given year. Any excess BET credit not used in a particular year may be carried forward to future years.
In 2011 the New Hampshire Legislature doubled the carry forward period of unused BET credits to ten years from five years. The changes were to be effective July 1, 2014. However, during its 2014 session, the Legislature passed SB243 that effectively accelerated the effective date of the 2011 law so the extended carry forward period would include years ending on or after December 31, 2014.
The TIR just issued concludes that any BET credits from periods ending before December 31, 2014 would still be subject to the five year carry forward period. Any credits created in tax years ending on or after December 31, 2014 would be able to be carried forward for ten years. So, for calendar year companies, any unused credits available as of December 31, 2013 can be carried forward for five years; any credits created in calendar year 2014 or later are subject to the new rules and can be carried forward for ten years. Fiscal year companies need to wait until their tax year beginning in 2015 before they can take advantage of the new ten year carry over period.
For specific questions about how this may affect your business, contact the tax professionals at our office or call 800.282.2442