Residency by Intent: New Hampshire Validates Rule 902.01 and Denies Credit for Out-of-State Taxes under the Interest and Dividends Tax

Introduction

In Morris v. Commissioner, N.H. Department of Revenue Administration, 2025 N.H. 37 (Aug. 19, 2025), the New Hampshire Supreme Court affirmed a superior court judgment upholding the Department of Revenue Administration’s (DRA) assessment of New Hampshire interest and dividends (I&D) tax against Robert and Mary Morris for the period June 16 through December 31, 2017. Although New Hampshire’s I&D tax has since been repealed effective January 1, 2025, the decision squarely addresses a recurring and consequential question that endures across tax and regulatory contexts: how New Hampshire determines “residency” (and thus taxability) under RSA 21:6.

The case presents two central issues. First, what constitutes “residency” for New Hampshire taxation under RSA 21:6, and how do DRA’s regulations—particularly N.H. Admin. R., Rev 902.01 and 902.04—interact with that statute? Second, does New Hampshire’s refusal to grant a credit for taxes paid to another state, and its I&D tax scheme generally, violate either the State Constitution’s prohibition on double taxation or the dormant Commerce Clause of the U.S. Constitution?

The Morrises, long-time Connecticut residents with a second home in New London, New Hampshire, took steps in mid-2017 suggesting a move to New Hampshire in anticipation of semi-retirement: they obtained New Hampshire driver’s licenses listing the New Hampshire address, registered to vote in New Hampshire (albeit never voting), made large estimated I&D tax payments to New Hampshire, and used the New Hampshire address on federal and Connecticut filings. They later decided not to relocate, filed a Connecticut resident return for 2017, and sought a refund from New Hampshire, prompting DRA to audit and assess I&D tax, interest, and penalties for the second half of 2017.

Summary of the Opinion

The Court affirmed across the board:

RSA 21:6 focuses on a taxpayer’s current intent to designate a New Hampshire abode as the principal place of physical presence for the indefinite future to the exclusion of all others. DRA’s Rule 902.01, which lists factors to evidence such intent, is consistent with the statute.
Applying those factors, the Morrises’ actions from June 16 to December 31, 2017—especially registering to vote and obtaining New Hampshire driver’s licenses—manifested immediate intent to make New Hampshire their principal place of presence. The trial court’s factual findings were supported by the record, and its legal conclusions were correct.
New Hampshire’s I&D tax, as applied to the Morrises’ 2017 resident period, did not violate the State Constitution’s prohibition on double taxation; once New Hampshire residency is established, the I&D tax applies without any constitutional obligation to credit taxes paid to other states.
The scheme did not violate the dormant Commerce Clause under the “internal consistency” test articulated in Comptroller v. Wynne; the residency framework does not inherently discriminate against interstate commerce.
The superior court properly declined to decide the Morrises’ undeveloped argument that the assessed amounts were compensation rather than interest/dividends under RSA chapter 77.
There was no “reasonable cause” to abate failure-to-pay penalties and interest; the record showed willful steps reflecting New Hampshire residency and tax compliance obligations.
The request for attorney’s fees was correctly denied because the Morrises did not prevail, and their summary judgment complaint about DRA’s missing counter-affidavit lacked merit.

Analysis

1) Precedents and Authorities Cited

The Court anchored its ruling in a line of New Hampshire and federal precedent:

Statutory/regulatory construction: N.H. Resident Ltd. Partners of Lyme Timber Co. v. N.H. Dep’t of Revenue Admin., 162 N.H. 98 (2011) (plain-meaning approach to statutes and rules); Appeal of Cover, 168 N.H. 614 (2016) (administrative rules may not add to or modify statutes).
Standard of review; mixed questions: Waterfield v. Meredith Corp., 161 N.H. 707 (2011) (domicile as mixed question of law and fact); Poland v. Twomey, 156 N.H. 412 (2007) (mixed-question framework); Forster v. Town of Henniker, 167 N.H. 745 (2015) (de novo review of application of law to facts).
Constitutional review: Rand v. State, 2025 N.H. 27 (2025) (de novo review of constitutional claims).
Double taxation under N.H. Constitution: Robinson v. Dover, 59 N.H. 521 (1880); Opinion of the Justices, 76 N.H. 588 (1911); Crosby v. Charlestown, 78 N.H. 39 (1915) (the principle that property should not be taxed twice, but when two jurisdictions assert tax, the inquiry is where the property is taxable).
One-state residency rule: Casey v. N.H. Sec’y of State, 173 N.H. 266 (2020) (although a person may live in multiple places, they can have only one residence under RSA 21:6-a).
Dormant Commerce Clause; internal consistency: Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175 (1995); Comptroller of the Treasury of Maryland v. Wynne, 575 U.S. 542 (2015) (internal consistency test to detect discrimination against interstate commerce).
Penalty abatement; reasonable cause: Appeal of Keith R. Mader 2000 Revocable Trust, 173 N.H. 362 (2020) (objective “ordinary business care and prudence” standard; no reckless indifference).
Issue preservation/adequate briefing: Lonergan v. Town of Sanbornton, 175 N.H. 772 (2023) (undeveloped arguments not addressed).
Summary judgment practice: Vogel v. Vogel, 137 N.H. 321 (1993) (summary rejection of meritless procedural contention).

2) Legal Reasoning

a) Statutory focus on “current intent” under RSA 21:6 and the validity of DRA Rule 902.01

RSA 21:6 defines a New Hampshire “resident or inhabitant” as a person who is domiciled or has a place of abode in New Hampshire and “has, through all of his actions, demonstrated a current intent to designate that place of abode as his principal place of physical presence for the indefinite future to the exclusion of all others.” The Court emphasized the statute’s focus on intent—the taxpayer’s current intent to designate a principal place of physical presence—not merely calendar-counted days of presence.

DRA’s Rule 902.01 is framed as a non-exclusive list of factors that evidence an intent to establish residency “by an ongoing physical presence within New Hampshire which is not transitory in nature,” including:

Maintaining a home or other living quarters in New Hampshire (subsection a);
Spending a greater percentage of time in New Hampshire than any other state (b);
Having family living with the individual in New Hampshire (c);
Advising government agencies that one is a New Hampshire resident (d);
Being employed or conducting business in or readily commuting from New Hampshire (e);
Registering to vote in New Hampshire (f).

The Court held the rule to be consistent with RSA 21:6 because it does not alter the statute; it operationalizes statutory intent by supplying relevant evidentiary factors. The Court also endorsed Rule 902.04’s presumption that a person who represents to a New Hampshire agency or political subdivision that they are a New Hampshire resident is deemed a resident for income-tax purposes unless they prove, by a preponderance of the evidence, actual residency in another jurisdiction.

b) Application to the Morrises: immediate intent manifested by voter registration and driver’s licenses

The trial court found that the Morrises satisfied Rule 902.01(a), (c), (d), and (f): they maintained the New London home; two adult children used that home; they told state/local agencies they were New Hampshire residents when they obtained New Hampshire driver’s licenses and registered to vote; and Mr. Morris filed to register his business as a foreign LLC with the New Hampshire Secretary of State. The trial court deemed subsections (b) (time spent) and (e) (employment) unclear or weighing against residency, but not dispositive.

Critically, the Supreme Court endorsed the trial court’s evidentiary assessment and emphasized that registering to vote and obtaining a New Hampshire driver’s license are not “preliminary” steps; they are concrete acts that “manifest an intent to change legal residence effective immediately,” reinforced by the Rule 902.04 presumption. The Court held that these acts, combined with other objective indicators (e.g., estimated I&D tax payments, use of a New Hampshire address on federal and Connecticut filings), demonstrated the requisite statutory intent between June 16 and December 31, 2017.

c) No constitutional entitlement to a credit for taxes paid to another state (double taxation claim)

Invoking Part I, Article 12 and Part II, Article 5 of the New Hampshire Constitution together with classic precedents (Robinson; Opinion of the Justices; Crosby), the Court reiterated the principle that the same property should not be taxed twice but clarified the operative inquiry when two states assert tax on the same income: where is the property (income) properly taxable?

Having upheld the finding that the Morrises were New Hampshire residents for the audit period, the Court concluded that their I&D income was properly taxable in New Hampshire for that period. New Hampshire’s Constitution does not require New Hampshire to credit taxes paid elsewhere in such circumstances. If Connecticut also taxed the same income on a resident basis, the remedy lies with Connecticut, not with New Hampshire courts.

d) Dormant Commerce Clause: internal consistency satisfied; no inherent discrimination

Applying Wynne’s “internal consistency” test, the Court examined whether New Hampshire’s tax scheme—if replicated by every state—would burden interstate commerce more than intrastate activity. Because the scheme taxes residents (as defined by a one-state-only residency construct anchored in intent and objective factors) and uses a framework that aims to identify one principal place of presence “to the exclusion of all others,” the Court found it internally consistent and not discriminatory. The absence of a credit for taxes paid to another state does not, by itself, render a resident-based income tax unconstitutional under the dormant Commerce Clause, so long as the structure does not inherently penalize cross-border activity.

e) Other holdings: undeveloped argument; penalties and interest; attorney’s fees; summary judgment

Classification of income: The Morrises’ contention that the assessment captured compensation rather than interest/dividends under RSA chapter 77 was not developed beyond a bare assertion and testimony; the trial court properly declined to rule, and the Supreme Court affirmed. See Lonergan (undeveloped arguments not addressed).
Penalty abatement: Under RSA 21-J:33, I and Mader, the taxpayer must show “reasonable cause” and lack of reckless indifference. Given the Morrises’ affirmative acts indicating New Hampshire residency and their substantial estimated tax payments (followed by nonpayment of the assessed balance), the Court held they failed to meet this burden; the penalties and interest stood.
Attorney’s fees: Denied because the Morrises were not prevailing parties. See RSA 21-J:28-b, VI.
Summary judgment procedure: The argument that DRA’s failure to file a counter-affidavit required judgment for the Morrises was rejected as meritless. See Vogel.

3) Impact and Implications

Although the I&D tax has been repealed effective January 1, 2025, the Court’s interpretation of RSA 21:6 and its validation of DRA’s residency rules have continuing significance:

Residency by intent is decisive. The Court’s sharp emphasis on “current intent to designate” a principal place of physical presence, and its acceptance of Rule 902.01’s evidentiary factors, provides a durable template for residency analysis in New Hampshire across tax and regulatory contexts that use RSA 21:6.
Voter registration and New Hampshire driver’s licenses are powerful indicators. The Court’s statement that these are not “preliminary” steps but immediate manifestations of legal residence will likely carry substantial weight in future residency disputes. Taxpayers contemplating relocation should expect these acts to trigger presumptions and burdens of proof under Rule 902.04.
No constitutional credit requirement. For periods when New Hampshire taxes depended on residency status, there is no state constitutional mandate to credit taxes paid to other states. This robustly positions New Hampshire assessments in dual-residency disputes, leaving relief to the other jurisdiction if both assert resident taxation.
Dormant Commerce Clause resilience. By passing the internal consistency test, New Hampshire’s resident-based scheme (and comparable schemes in other contexts) is insulated from facial Commerce Clause challenges premised solely on the absence of credits.
Penalty standards remain exacting. “Reasonable cause” demands objective diligence. Where taxpayers take formal steps establishing New Hampshire residency but later reverse course, penalty abatement will be difficult absent compelling, well-documented circumstances.

For taxpayers with multiple homes and cross-border economic ties, this decision underscores the need for careful alignment between formal acts (licenses, voter registration, addresses on filings) and actual intent. Inconsistencies will be resolved against the taxpayer where formal declarations invoke the Rule 902.04 presumption and are corroborated by other objective indicators.

Complex Concepts Simplified

Resident vs. domicile under RSA 21:6: New Hampshire treats a “resident or inhabitant” as a person domiciled or with an abode in the state who, by their actions, shows current intent to make that place their principal physical presence indefinitely, to the exclusion of all others. It is an intent-and-evidence test, not just a day-counting test.
Rule 902.01 factors: Concrete indicators (home ownership, family presence, government representations, voter registration, time spent, employment ties) that collectively show intent to establish ongoing, non-transitory presence in New Hampshire.
Rule 902.04 presumption: If you represent to a New Hampshire agency that you are a resident, you are presumed a New Hampshire resident for income-tax purposes unless you prove by a preponderance of evidence that you are actually a resident elsewhere.
Double taxation (state constitution): The principle is that the same property should not be taxed twice, but when two states tax the same income, courts ask where the property (income) is properly taxable. If New Hampshire residency is established, New Hampshire may tax without crediting another state’s tax.
Internal consistency test (Wynne): A method to see if a state tax inherently disadvantages interstate commerce. Imagine every state uses the same tax; if interstate transactions aren’t burdened more than intrastate ones, the scheme is internally consistent and generally constitutional.
Standard of review: Residency is a mixed question. Trial courts find facts (reversed only if clearly erroneous), while appellate courts review application of law to those facts de novo.
Reasonable cause for penalty abatement: The taxpayer must show they exercised ordinary business care and prudence, could not reasonably comply, and were not recklessly indifferent. It is an objective, demanding standard.

Conclusion

Morris clarifies and cements critical features of New Hampshire residency and taxation. First, RSA 21:6 is an intent-centered framework: residency turns on a person’s current intent to make New Hampshire their principal, indefinite place of presence, as evidenced by objective acts. DRA’s Rule 902.01 is a valid and practical implementation of this statute, and Rule 902.04’s presumption is potent when taxpayers represent residency to state entities.

Second, by affirming that New Hampshire need not credit taxes paid elsewhere once New Hampshire residency is established, the Court delineates the scope of the State Constitution’s double-taxation principle and situates disputes about overlapping resident taxation in the proper forum—typically the other taxing state. Third, the Court’s dormant Commerce Clause analysis, grounded in Wynne’s internal consistency test, confirms the constitutional durability of resident-based income taxation that identifies a single principal residence to the exclusion of all others.

Finally, the decision signals that formal, legal steps—voter registration and driver licensing—carry decisive weight in residency determinations and can trigger burdens of proof and tax liabilities immediately. For taxpayers with bi-state lives, Morris is a cautionary road map: align your formal declarations, documentary trails, and daily realities with your true, current intent—or be prepared for New Hampshire to treat your intent as already changed.