New Hampshire § 21-J:38-a Sham Transactions May Be Disallowed

New Hampshire Statutes

§ 21-J:38-a — Sham Transactions May Be Disallowed

New Hampshire § 21-J:38-a

Title ITHE STATE AND ITS GOVERNMENT

Ch. 21-JDEPARTMENT OF REVENUE ADMINISTRATION

SubdivisionTransferee Liability and Criminal Penalties

This text of New Hampshire § 21-J:38-a (Sham Transactions May Be Disallowed) is published on Counsel Stack Legal Research, covering New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

N.H. Rev. Stat. Ann. § 21-J:38-a (2026).

Text

I.The commissioner may disallow any sham transaction in ascertaining any taxpayer's tax liability. With respect to transactions between members of a controlled group, the taxpayer shall bear the burden of establishing by a preponderance of the evidence that a transaction or a series of transactions between the taxpayer and one or more members of the controlled group was not a sham transaction. For all other taxpayers, the commissioner shall bear the burden of establishing by a preponderance of the evidence that a transaction or series of transactions was a sham transaction.

II.In administering any tax, the commissioner may apply the doctrines of economic reality, substance over form, and step transaction.

III.If the commissioner disallows a sham transaction under paragraph I, the applic

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I. The commissioner may disallow any sham transaction in ascertaining any taxpayer's tax liability. With respect to transactions between members of a controlled group, the taxpayer shall bear the burden of establishing by a preponderance of the evidence that a transaction or a series of transactions between the taxpayer and one or more members of the controlled group was not a sham transaction. For all other taxpayers, the commissioner shall bear the burden of establishing by a preponderance of the evidence that a transaction or series of transactions was a sham transaction.
II. In administering any tax, the commissioner may apply the doctrines of economic reality, substance over form, and step transaction.
III. If the commissioner disallows a sham transaction under paragraph I, the applicable limitation period for assessing the tax, together with applicable penalties, charges, and interest, shall be extended for a period equal to the applicable limitation period. Nothing in this paragraph shall be construed as extending an applicable limitation period for claiming any refund of a tax.
IV. The commissioner may adopt rules under RSA 541-A that are necessary to administer this section, including rules establishing criteria for identifying sham transactions.
V. In this section:
(a) "Controlled group" means 2 or more person related in such a way that one person directly or indirectly owns or controls the business operation of another member of the group.
(b) "Sham transaction" means a transaction or series of transactions without economic substance because there is no business purpose or expectation of profit other than obtaining tax benefits.
(c) "Tax" includes any tax administered by the commissioner.
(d) "Taxpayer" includes any person or entity subject to a tax.