N.H. Admin. Code § Rev 902.06 - Mutual Funds

(a) Mutual funds shall be presumed:

(1) To be organizations incorporated under the laws of New Hampshire or some other state of the United States; and

(2) Comprised of ownership interests that are represented by transferable shares.

(b) Mutual funds not taxable under the provisions of (a) above shall not be required to:

(1) File a return;

(2) Pay a tax; or

(3) Use the allocation of income provisions of RSA 77:12 or RSA 77:14-c.

(c) Investors in mutual funds shall be taxable if they are:

(1) New Hampshire residents;

(2) Executors, deriving their appointment from a court of this state within the scope of RSA 77:3, I(c).

(d) Amounts received from mutualfunds by investors, which are reported and taxed federally as dividends, shall be taxable dividends except for:

(1) New Hampshire direct or municipal obligations;

(2) Direct obligations of the United States Government; and

(3) Capital gains realized by the investor through the sale of his or her interest in a mutual fund.

(e) Amounts received from mutualfunds by investors on all investments in New Hampshire direct or municipal obligations and direct obligations of the United States Government shall be deemed to be an investment by the investor in such New Hampshire direct or municipal obligations and United States Government obligations and shall not be considered taxable dividends.

(f) Investors receiving distributions from mutual funds that invest in New Hampshire direct or municipal obligations and direct United States obligations and other types of investments shall not include as taxable dividends any amount:

(1) Reported to the investor by the mutual fund as interest from New Hampshire direct or municipal obligations and direct obligations of the United States Government;

(2) Determined by multiplying the total amount received by a fraction:

a.The numerator of which shall be the amount of interest on New Hampshire direct or municipal obligations and direct obligations of the United States Government received by the mutual fund; and

b.The denominator of which shall be the total amount of income received by the mutual fund from all activities; or

(3) Determined by multiplying the total amount received by the mutual fund's percentage of assets invested in New Hampshire direct or municipal obligations and direct obligations of the United States Government.

(g) To rebut the presumption of its organizational status, under (a) above, a mutual fund shall present documentary evidence in a majority of the categories listed in (h) below, with respect to its organizational and operational structure.

(h) The categories evidencing non-corporate structure shall be the absence of:

(1) Limited liability where an investor may lose more than his or her investment in that organization;

(2) Continuity of life, where the organization holding the funds shall not survive after:

a.The sale of shares by interest holders; or

b.The death of interest holders;

(3) The right of the mutual fund to sue and be sued as an entity;

(4) Property ownership, where assets are held in the name of all investors rather than in the fund name; or

(5) Dividends, where profits of the fund are not divided ratably among investors.

(i) In instances where mutual funds are taxable under the provisions of (g) above, the distributions to investors in the mutual fund shall not be taxable dividends and the mutual fund shall:

(1) File a return; and

(2) Apportion the income.

Notes

N.H. Admin. Code § Rev 902.06

#4557, eff 12-28-88; ss by #5947, eff 12-29-94; ss by #6321, eff 8-22-96; ss by #8137, eff 8-10-04 (from Rev 902.05); ss by #9658, eff 2-24-10; ss by #9843, eff 12-23-10 (see Revision Note at chapter heading for Rev 900); ss by #10211, eff 10-24-12

Amended byVolume XXXV Number 24, Filed April 9, 2015, Proposed by #10795, Effective 3/11/2015, Expires3/11/2025.