New Hampshire State Enforcement: Understanding
Bank Levy and Collection Actions
Understanding State Tax Enforcement in New Hampshire
New Hampshire operates two distinct tax collection systems that serve different purposes and follow separate legal procedures. The New Hampshire Department of Revenue Administration administers state business taxes, including the Business Profits Tax and Business Enterprise
Tax.
Local municipal tax collectors handle property tax collection under a completely separate system governed by different statutes and procedures. State enforcement occurs when the
Department of Revenue Administration takes formal collection action to recover unpaid state business taxes after earlier attempts to secure payment have failed. A bank levy represents one of the collection tools the state uses to satisfy tax debt by freezing or seizing funds directly from bank accounts.
What a Bank Levy Means for Your Finances
A bank levy grants the state legal authority to freeze or withdraw funds from your bank account to collect unpaid state business taxes. Under New Hampshire law, a notice and demand for payment of taxes, interest, and penalties constitutes a lien on real and personal property, including interests in bank accounts and accounts receivable.
Bank levies indicate a serious stage in the collection process beyond initial billing notices. The
Department of Revenue Administration uses this enforcement method because it provides direct access to funds owed to the state. The levy applies specifically to the targeted bank account and does not automatically extend to other assets or accounts.
Legal Authority and Collection Procedures
The Department of Revenue Administration operates under specific statutory authority when collecting delinquent state business taxes. Collection activities may include placing liens on real estate, personal property, and property interests such as bank accounts and security interests.
The state may issue distraint notices to seize property and sell it with proceeds applied to the outstanding balance.
Additional enforcement actions include license suspension or revocation for Department-issued licenses, bond posting requirements to guarantee payment of taxes collected from others, and
court action through the Attorney General’s office. These collection tools follow procedures outlined in state statutes governing the Department’s authority.
Financial Consequences of Unpaid State Taxes
Ignoring a bank levy or failing to respond to collection notices triggers additional enforcement measures and growing financial liability. The state continues collection efforts through multiple methods, potentially pursuing wage garnishment, property liens, or license suspension simultaneously or in sequence. Interest accrues continuously on unpaid state tax debt at rates that change annually in accordance with federal rates.
For calendar year 2026, the interest rate for underpayment is 9% annually. For calendar year
2025, the rate was ten percent annually. These rates follow the federal rate specified in Internal
Revenue Code Section 6621(a)(2) plus two percentage points, as required by state statute. The
state also applies penalties and collection costs to the original tax amount, increasing total debt over time.
What Enforcement Does Not Mean
A bank levy does not indicate criminal prosecution or criminal charges. The action remains a civil collection matter focused on recovering unpaid taxes. State tax liens do not appear on consumer credit reports maintained by the three major credit bureaus, which stopped reporting tax liens in April 2018.
However, liens remain public records that lenders may discover through independent searches outside credit reporting systems. A bank levy freezes or takes funds only from the specific account targeted by the enforcement action. The state has not seized all your assets or initiated blanket claims against your property.
Steps to Take After Receiving a Levy Notice
Step 1: Gather All Documentation
Collect every notice, letter, and correspondence from the Department of Revenue
Administration. Organize documents chronologically to establish a clear timeline of communication. Keep all materials in one secure location for reference during calls and meetings with state officials.
Step 2: Verify Debt Details and Calculations
Review the enforcement notice to confirm the tax year, original tax amount, penalties applied, and interest charged. Note the levy issuance date and any response deadlines stated in the notice. Cross-reference amounts against your business records if available.
Step 3: Contact Your Bank Immediately
Call your bank to confirm whether a levy has been placed on your account and determine which account is affected. Ask when the freeze or transfer occurred and request written confirmation.
Provide the bank with a copy of the levy order if needed to clarify your account status.
Step 4: Reach Out to the Collections Division
Contact the Department of Revenue Administration Collections Division directly to discuss your case and explore available options. Request detailed information on how the debt was calculated and the documentation supporting the assessment. Obtain the name and direct contact information for the person handling your account.
Step 5: Discuss Payment Arrangements
Ask whether the Department will consider an installment payment agreement for your debt.
Understand that such agreements are at the Department’s discretion and must be secured by a lien upon your property adequate to secure the debt. Provide requested financial information promptly and completely to facilitate the review process.
Step 6: Obtain Written Confirmation
Request written confirmation of any payment plan, settlement, or alternative arrangement the
Department approves. Keep copies of all agreements along with correspondence related to the arrangement. Confirm the first payment date, amount, and payment method in writing.
Step 7: Make Timely Payments
Set up payments in accordance with the Department’s instructions and pay on time to maintain the agreement. Keep detailed records of each payment, including dates, amounts, confirmation numbers, and payment methods. Note that if your financial circumstances change or you fail to satisfy agreement terms, the Department may modify or terminate the agreement upon thirty days' notice.
Step 8: Monitor Account Status
Verify with your bank when the levy is lifted or when funds are released after resolving the debt.
Request written confirmation from the bank that the levy has been removed from your account.
Retain this documentation for your records.
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 9: Request Final Resolution Documentation
Once you have satisfied the debt or reached a settlement, ask the Department for written confirmation that the account is resolved. This documentation protects you if questions arise later about whether you fulfilled your obligations. Store this confirmation with your other tax records.
Your Right to Appeal State Tax Assessments
The Department of Revenue Administration provides clear appeal procedures for taxpayers who disagree with assessments or collection actions. You must file an appeal with the Department’s
Hearings Bureau within sixty days after receiving notice of assessment or denial of a refund claim.
You can submit appeals online through Granite Tax Connect or by completing Form A-101. Your written appeal must include your identification information, a concise statement of facts and issues, the action you request, and relevant statutes or cases supporting your position.
After the Hearings Officer completes the adjudicative process, you have thirty days from the decision notice to appeal to the Board of Tax and Land Appeals or the Superior Court in the county where you reside or maintain a place of business.
Common Errors That Complicate Resolution
Missing response deadlines allows enforcement to proceed without further notice or opportunity for input. Providing incomplete financial information when the Department requests documentation delays resolution and may prevent approval of payment arrangements.
Assuming a levy will be lifted automatically after you make contact leads to continued account freezes, because only the Department can authorize your bank to release a levy.
Failing to keep detailed payment records leaves you without proof if disputes arise about whether the state received your payments. Discarding correspondence from the Department deprives you of the ability to reference original debt amounts, payment terms, or case status in later discussions or disputes.
Payment Application Order and Continuing Interest
The Department applies any partial payments in a specific order that affects how your debt decreases over time. Payments made in amounts less than the total due apply first to fees and penalties, second to interest, and third to the underlying tax liability.
Interest continues to accrue on any outstanding unpaid tax balance even after you begin making payments. This means you must satisfy all fees and penalties before any payment reduces your actual tax debt. Understanding this application order helps you plan payment amounts and timelines more effectively.
What Happens After You Complete These Steps
After you contact the Collections Division and provide the requested information, the
Department reviews your circumstances and may propose payment options or other arrangements. If you reach an agreement, the Department provides written confirmation of the terms and conditions. Making agreed payments on time typically results in suspension of active enforcement while the payment plan remains in good standing.
If you do not respond to enforcement notices or fail to follow an approved payment arrangement, the Department resumes collection efforts and may pursue additional enforcement actions. Maintaining regular communication with your assigned contact person helps prevent misunderstandings and keeps your case moving toward resolution.
Frequently Asked Questions
How long does a bank levy remain active?
The levy typically remains until the Department receives payment, reaches a settlement, or takes action to release it. Contact your bank and the Collections Division directly for information specific to your case. The state does not publish a standard duration because each situation depends on resolution efforts and payment arrangements.
Can you remove a levy without state action?
Only the Department of Revenue Administration can authorize your bank to release a levy. You cannot remove it independently through bank action or personal request. The bank must receive official authorization from the Department before releasing frozen funds or lifting account restrictions.
Will payment plans stop other collection actions?
The Department typically suspends enforcement when you enter a payment plan agreement.
However, enforcement may resume if you miss payments or violate agreement terms. Confirm suspension of collection activities in writing when establishing your payment arrangement.
What if you cannot afford to pay in full?
Contact the Collections Division to discuss payment options and provide information about your income and expenses. Remember, an adequate lien on your property must secure the installment agreements. The Department considers these arrangements at its discretion based on your financial circumstances.
What happens when you dispute the debt amount?
Contact the Department immediately with documentation supporting your dispute. Request a detailed explanation of how the state calculated the debt, including tax, penalties, and interest components. The Department must review your documentation and provide information about the assessment basis.
Will the Department pursue wage garnishment in addition to the bank levy?
The Department may pursue multiple collection methods simultaneously or in sequence, depending on your specific circumstances. Whether wage garnishment occurs depends on factors specific to your case. Contact the Collections Division to understand what collection actions may apply to your situation.
How do state tax liens affect your ability to borrow money?
State tax liens have not appeared on consumer credit reports since April 2018, when the major credit bureaus stopped reporting them. However, liens remain public records that lenders may discover through independent searches. Potential creditors who find public lien records may consider them when evaluating loan applications or setting interest rates.
Moving Forward After Enforcement
State enforcement through bank levies represents a serious stage in the tax collection process that requires immediate attention and response. Understanding the specific authority of the New
Hampshire Department of Revenue Administration helps you recognize which system applies to your situation and what procedures govern your case. The Department maintains processes for working with taxpayers who owe state business taxes, including payment arrangements and appeal rights.
Responding promptly to enforcement notices, providing complete information when requested, and following through on agreed arrangements leads toward resolution. You face this situation with clear options available, and the Department has established procedures to address unpaid state tax obligations while protecting your rights throughout the collection process.
Facing State Tax Enforcement Action?
If you’ve received a notice related to sales tax or payroll tax enforcement, and aren’t sure how to respond, our team can help you understand your options and next steps.
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