Governor Lynch signs the 1031 Tax Exchange Bill

July 19, 2010 by Monika McGillicuddy
Filed under General R.E. Information, Real Estate News

Lynch signature punctuates legislative victory for NHAR

July 19, 2010

Flanked by, from left, Sen. Lou D’Allesandro, NHAR President Monika McGillicuddy, NHAR Past President Paul Sargeant, NHAR Executive Vice President Paul Griffin, investor Alex Iskandar of Lebanon, REALTOR® George Foss III, investor Ron Gosselin of Manchester and NHAR Government Affairs Director Bob Quinn, Gov. John Lynch signs Senate Bill 483 last week.

Lynch signature punctuates legislative victory for NHAR

Legislation originally drafted by the New Hampshire Association of REALTORS® earned the signature of Governor John Lynch last week, preventing the Department of Revenue Administration from applying the Business Profits Tax to federally recognized 1031 real estate exchanges.

“This rights what could have been a very substantial wrong,” said Sen. Lou D’Allesandro, the prime sponsor of the legislation, during a brief ceremony in the Governor’s chamb
ers Friday.

New Hampshire had been one of only two states attempting to tax such 1031 transfers involving so-called “disregarded entities.”

The new law also retroactively allows investors to engage in real estate exchanges permitted by federal law without paying the Business Profits Tax. The complete bill can be found here.

Among other arguments, NHAR had warned that preventing such like-kind exchanges would scare investors away from the state, as it had in other states that changed their law to capture this income.

It was a major victory, especially for commercial real estate, which relies heavily on 1031 transfers. NHAR owes a particular debt of gratitude to Sen. D’Allesandro for his leadership and assistance in passing this legislation.

During the bill signing ceremony, NHAR Public Policy Committee member George Foss of Littleton, a specialist in 1031 transfers, said, “This is a big win for the real estate industry, for the taxpayers of the state, and for the New Hampshire Association of REALTORS®.”