Governor John Lynch signed a budget balancing bill into law Thursday, according to the Manchester Union Leader, saying it is a sensible and responsible answer to the state’s fiscal problems.
The Interest/Dividends tax on LLCs (limited liability companies), passed late in the 2009 legislative session, has been eliminated, presumably effective January 1, 2010, leaving us with this one year of murky taxes since the ‘LLC tax’ became law effective January 1, 2009.
Details are limited, and we haven’t heard word if anything was addressed with respect to reasonable compensation. The reasonable compensation issue has been in the code for many years and recently came to the surface as part of the LLC tax controversy. There really isn’t any safe harbor to use in the preparation of New Hampshire Business Enterprise or Business Profits tax returns.
Interestingly, this should close this chapter, but if you have a business and find yourself paying a lot of Interest/Dividends tax even before this controversy, and wonder whether your current accountant is totally up to speed on the New Hampshire taxes, you should consider consulting with a New Hampshire expert to help you wade through this murk.