77-E:4 Apportionment. –
I. A business entity, the business activities of which are taxable both within and without this state and which is subject to a business privilege tax, a net income tax, a franchise tax measured by net income, a capital stock tax, or a tax of the type imposed by this chapter or is subject to the jurisdiction of another state to impose a business privilege tax, a net income tax, a franchise tax measured by net income, a capital stock tax, or a tax of the type imposed by this chapter shall apportion its enterprise value tax base so as to allocate to this state a fair and equitable proportion of such base. Except as provided in this section, such apportionment shall be made in the following manner:
(a) The portion of the base from compensation shall:
(1) Include the amount of any deduction taken pursuant to RSA 77-A:4, III, the amount relating to self-employment income and the amount relating to wages and salaries subject to or specifically exempt from withholding under section 3401 of the United States Internal Revenue Code except such payments as are made expressly exempt from withholding under sections 3401(a)(1), (9), (10), (13), (14), (15), (16), (18), (19), and (20); and
(2) Be apportioned to this state as a percentage of total compensation paid by the business enterprise to employees everywhere as is paid by the business enterprise to employees for services rendered within this state. Such compensation is deemed to be disbursed for services in this state if the service is performed entirely within this state, or if the service is performed both within and without this state and the service performed without this state is incidental to the service within this state, or some of the service is performed in this state and (A) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in this state, or (B) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual performing such service resides within this state.
(b) The portion of the base from interest shall be apportioned by multiplying the percentage of value of the total real and tangible personal property owned and employed by the business enterprise everywhere as is owned and employed by it in business activities in this state. Property owned by the business enterprise shall be valued at its original cost.
(c) The portion of the base from dividends shall be apportioned on the basis of the 3 following factors, giving equal weight to each, and applying the average of the 3 percentages to the dividends:
(1) The compensation apportionment factor in subparagraph (a)(2) of this section;
(2) The interest apportionment factor in subparagraph (b) of this section; and
(3) The percentage of the total sales, including charges for services, made by the business enterprise everywhere as is made by it within this state:
(A) Sales of tangible personal property are made in this state if the property is delivered or shipped to a purchaser, other than the United States government, within this state regardless of free on board point or other conditions of sale, or the property is shipped from an office, store, warehouse, factory or other place of storage in this state and (i) the purchaser is the United States government, or (ii) the business enterprise is not taxable in the state of the purchaser.
(B) Sales other than sales of tangible personal property are in this state if the business enterprise's market for the sales is in this state, as follows:
(i) In the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state;
(ii) In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this state;
(iii) In the case of sale of a service, if and to the extent the service is delivered to a location in this state;
(iv) In the case of sale, rental, lease, or license of intangible property, if and to the extent the property is used in this state;
(v) In the case of interest income, if and to the extent the debtor or encumbered property is located in this state;
(vi) In the case of dividend income, if and to the extent the business enterprise's commercial domicile is in this state; and
(vii) In the case of other income, if and to the extent the income is derived from sources in this state.
(C) In the case of sales other than sales of tangible personal property, if the state or states of assignment cannot be determined, the state or states of assignment shall be reasonably approximated.
(D) In the case of sales other than sales of tangible personal property, if the taxpayer is not taxable in a state to which a sale is assigned, or if the state of assignment cannot be determined or reasonably approximated, such sale shall be excluded from the denominator of the sales factor.
II. If the method of apportionment in paragraph I does not fairly represent the business enterprise's business activity in this state, the business enterprise may petition for, or the commissioner may require, in respect to all or any part of the business enterprise's business activity, if reasonable:
(a) The exclusion of any one or more of the apportionment factors;
(b) The inclusion of one or more additional apportionment factors which will fairly represent the business enterprise's business activity in the state; or
(c) The employment of any other method to effect an equitable apportionment of the business enterprise's enterprise value tax base.