Section Rev 2404.04 - Compensation Apportionment Factor(a) The compensation apportionment factor shall include: (1) The total amount of compensation, as described in Rev 2402.01, paid or accrued to all of the following in a business enterprise: (2) The net earnings from self-employment, less that portion of earnings retained for use in the business enterprise by the owner and the amount included in (a)(3) below; and(3) The amount deducted as compensation for the personal services of a proprietor, partner, or member under RSA 77-A:4, III, for purposes of the business profits tax.(b) The total amount of compensation paid to service providers shall be determined based on: (1) The business enterprise's method of accounting; or(2) The wages reported on the employer's state unemployment wage reports.(c) The method selected in (b), above, shall be used in a consistent manner.(d) If the method in (b), above, is changed, adjustments shall be made to prevent the inclusion of the identical wages in the compensation apportionment factor for more than one taxable period.(e) Payment made to, or on behalf of, independent contractors shall not be included in a business enterprise's compensation apportionment factor.(f) Service providers performing services for an affiliated enterprise shall be included in the compensation apportionment factor of the entity which: (1) Issues the individual's federal Form W-2; or(2) Deducts the individual's compensation for federal income tax purposes provided that:a. The compensation amount is not included within a management fee charged to the affiliate;b. The business enterprise issuing the individual's federal Form W-2 only charges the affiliate for the actual payroll expenditures; andc. All affiliates maintain detailed records to substantiate the amount of compensation paid or accrued for each employee and how such compensation was recorded and deducted by the various affiliates.(g) The compensation for services of an employee, officer, or director, or personal services of apropriet or, partner, or member shall be included in New Hampshire's numerator when: (1) The services are performed entirely within this state;(2) The services are performed both within and without this state and the services performed without this state are incidental to the services within this state; or(3) Some of the services are performed in this state, and a. The base of operations or, if there is no base of operations, the place from which the services are directed or controlled is in this state; orb. The base of operations or the place from which the services are directed or controlled is not in any state in which some part of the services are performed, but the individual performing such services resides within this state.N.H. Admin. Code § Rev 2404.04
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08 (from Rev 2404.03 )
Amended by Volume XXXVI Number 06, Filed February 11, 2016, Proposed by #11032, Effective 1/29/2016, Expires 1/29/2026.