Taxes in New Hampshire: Features and Advantages

Main Taxes in the State of New Hampshire

Income Tax:

New Hampshire does not levy income tax on wages or most forms of income, making the state especially attractive for employees and small business owners.

However, there is a tax on passive income — the Interest and Dividends Tax, which was 4% until 2024, reduced to 3% in 2025, and scheduled for full repeal by 2027. This tax applies to income from dividends, interest, trusts, and certain investments.

Sales Tax:

New Hampshire is one of the few states with no state-level sales tax. This means neither retailers nor buyers are required to charge or pay sales tax on transactions within the state.

Property Tax:

The average effective property tax rate is about 2.05% of market value, one of the highest in the country. Property tax is administered at the city and county level and primarily funds schools and infrastructure. Commercial, investment, and residential properties are taxed equally strictly.

Business Taxes:

New Hampshire levies two main business taxes:

• Business Profits Tax (BPT): applies to profits of companies including C corporations, S corporations, LLCs, and partnerships. The rate is 7.5% of taxable profits (threshold: gross receipts over $92,000).
• Business Enterprise Tax (BET): applies to payroll, interest, and dividends. The rate is 0.55%, applicable if gross receipts exceed $260,000 annually.

These taxes operate in parallel and cover a wide range of business structures. All companies in New Hampshire must file an Annual Report with the New Hampshire Secretary of State by April 1 each year. Failure to file results in penalties and possible dissolution.

Our company provides services for preparing Annual Reports, calculating BPT/BET, choosing optimal business structures, and preparing tax filings. Businesses must also file reports on tangible personal property, including equipment, furniture, and computers.

Excise Taxes:

The state levies excise taxes on alcohol, tobacco, gasoline, and car rentals. Sales of certain goods require special licenses and compliance.

Favorable Tax Conditions in New Hampshire:

New Hampshire offers one of the least burdensome tax systems in the U.S. The absence of sales tax, wage income tax, and (soon) dividend tax makes it an ideal jurisdiction for wealthy individuals, investors, and small business owners.

While business taxes (BPT and BET) exist, they are moderate and manageable with tax planning. Importantly, the state has no franchise tax and no personal property tax on individuals.

Taxes in New Hampshire Compared to Other States:

Compared to Massachusetts, New York, or California, where tax burdens can reach 13% of income, New Hampshire stands out with no income or sales tax. On the other hand, property tax here is among the highest in the nation, which must be considered when purchasing housing or offices.

The dual structure of BPT and BET is unique to New Hampshire. Businesses planning to operate in the state must carefully monitor revenue thresholds, as even small businesses may become subject to taxation.