New Hampshire HB 1668: relative to the application of the Internal Revenue Code to provisions of the business profits tax.

Bill Text

HB 1668-FN - AS INTRODUCED

2026 SESSION

 26-3063

 07/09

HOUSE BILL 1668-FN

AN ACT relative to the application of the Internal Revenue Code to provisions of the business profits tax.

SPONSORS: Rep. Osborne, Rock. 2; Rep. Labrie, Hills. 2; Rep. Notter, Hills. 12; Rep. Sweeney, Rock. 25; Rep. Ammon, Hills. 42; Rep. Drago, Rock. 4

COMMITTEE: Ways and Means

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ANALYSIS

 This bill updates the effective version of the United States Internal Revenue Code of 1986 applicable to the business profits tax, subject to certain adjustments. The bill also requires the commissioner of revenue administration to report biennially on changes to the Internal Revenue Code.

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Explanation: Matter added to current law appears in bold italics.

 Matter removed from current law appears [in brackets and struckthrough.]

 Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

 26-3063

 07/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty-Six

AN ACT relative to the application of the Internal Revenue Code to provisions of the business profits tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

 1 New Subparagraph; Business Profits Tax; Definition; United States Internal Revenue Code. Amend RSA 77-A:1, XX by inserting after subparagraph (o) the following new subparagraph:

 (p) For all taxable periods beginning on or after January 1, 2027, the United States Internal Revenue Code of 1986, as amended, subject to RSA 77-A:3-a.

 2 Business Profits Tax; Adjustments; Internal Revenue Code. RSA 77-A:3-a is repealed and reenacted to read as follows:

 77-A:3-a Adjustments; Internal Revenue Code Provisions. In determining gross business profits before net operating loss and special deductions, a business organization shall calculate expense deductions as permitted under section 179 of the Internal Revenue Code as provided in RSA 77-A:1, XX, except that for property placed in service on or after January 1, 2027, a business organization shall calculate expense deductions not to exceed $500,000. 

 3 New Paragraph; Duties of the Commissioner of Revenue Administration; Report; Internal Revenue Code Changes. Amend RSA 21-J:3 by inserting after paragraph XXXIII the following new paragraph:

 XXXIV. File a report at least biennially with the finance committees of the senate and the house of representatives informing the committees of changes to the United States Internal Revenue Code, related Treasury Regulations, and administrative rulings which would impact New Hampshire.

 4 Applicability.

 I. Section 1 of this act shall apply to taxable periods beginning on or after January 1, 2027.

 II. Section 2 of this act shall apply to property placed in service on or after January 1, 2027.

 5 Effective Date. This act shall take effect upon its passage.

 LBA

 26-3063

 12/2/25

HB 1668-FN- FISCAL NOTE

AS INTRODUCED

AN ACT relative to the application of the Internal Revenue Code to provisions of the business profits tax.

FISCAL IMPACT: 

 Estimated State Impact

FY 2026

FY 2027

FY 2028

FY 2029

 Revenue

$0

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

 Revenue Fund(s)

General Fund and Education Trust Fund

 Expenditures*

$0

Indeterminable

Indeterminable

Indeterminable

 Funding Source(s)

None

 Appropriations*

$0

$0

$0

$0

 Funding Source(s)

None

 *Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill

METHODOLOGY:

This bill updates the version of Internal Revenue Code (IRC) used for purposes of the Business Profits Tax (BPT) to be the code "as amended" beginning with taxable periods on or after January 1, 2027. This change would make every federal amendment to the IRC applicable in New Hampshire automatically upon its adoption (rolling conformity). Currently, New Hampshire is a static conformity state, using the IRC in effect on December 31, 2018, subject to adjustments found in RSA 77-A:3-b.

The most recent amendment to the IRC was made July 2025 in the One Big Beautiful Bill Act (OBBBA). This bill would make the amendments in the OBBBA as well as any other amendments to the IRC made in 2026 or 2027 applicable in New Hampshire for Tax Year (TY) 2027.

The Department states one effect of moving from static to rolling conformity is the onus would be placed on the state legislature to review federal law changes and react quickly if it did not wish to adopt them. For example, with respect to the OBBBA, which was signed into law on and became effective July 4, 2025 for Tax Year 2025, New Hampshire would have had to meet in special session if it wished to decouple from or adjust any of its provisions.

With respect to implementation of federal tax law changes, the