Tax in New Hampshire: a complete guide
How could New Hampshire’s taxes affect your finances? Here’s the complete guide to income tax, sales tax, property tax and retirement tax in New Hampshire.
New Hampshire income tax
Every US citizen has to pay federal income tax. In addition to income tax rates at the federal level, which begins at ten percent and goes up to 37 percent for the country’s top earners, most states impose their income taxes too.
Only nine states in the US choose not to set a state income tax rate, and New Hampshire is one of them.
In New Hampshire, there’s no state income tax on wages and salaries. However, there is a flat rate tax of five percent on interest and dividends.
If you’re a single filer, the first $2,400 you make from interest or dividends is tax-free, and for a married couple filing jointly, that threshold doubles to $4,800. That means you don’t have to pay a cent in state tax if you take less cash from interest or dividends. Residents over 65 years old, disabled, or unable to work get an extra $1,200 exemption.
Let’s look at how that works in practice: if you’re a single filer who made $3,000 in interest, you will pay nothing on the first $2,400, but on the last $600, you’ll pay a five percent tax. That makes your total state tax bill $30.
A single person OR a married person/registered domestic partner filing separately:
|Income from interest and dividends
|State income tax amount
|$0 - $2,400
|More than $2,400
|five percent on the amount over $2,400
A married person/registered domestic partner filing jointly:
|Income from interest and dividends
|State income tax amount
|$0 - $4,800
|More than $4,800
|five percent on the amount over $4,800
Compared to neighboring states like Maine, where the top earners pay a 7.15 percent income tax, New Hampshire’s relaxed approach might be a big pro, especially for higher-income earners.
New Hampshire Sales Tax
New Hampshire has no statewide sales tax. It is one of five US states not to impose statewide sales taxes; the other four are Alaska, Delaware, Montana and Oregon.
There are no local or district taxes in New Hampshire either, meaning another tax saving for New Hampshire residents. However, certain commodities are an exception to this rule.
The items with a sales tax in New Hampshire are:
Electricity use (taxed at $0.00055 per kilowatt hour)
Communications services (seven percent)
Hotel rooms (8.5 percent)
Restaurant meals (8.5 percent)
What about New Hampshire alcohol tax?
New Hampshire imposes taxes on some alcohol, but there are no private liquor stores. You can only purchase liquor at a state-run store, so the state has a monopoly on profits from liquor sales to consumers.
The New Hampshire beer tax is $0.30 per gallon (that works out at about 2.81 cents per beer).
There is no sales tax on wine in New Hampshire.
There is no sales tax on liquor in New Hampshire, but you can only purchase liquor from state-run stores.
New Hampshire property tax
In contrast to New Hampshire’s lower-than-average sales and income taxes, it has some of the highest property taxes in the country. So, if you’re considering buying property in New Hampshire, you must factor in the hefty property taxes.
New Hampshire’s statewide average property tax is 1.77 percent of the home’s value, the fourth highest in the US. That equates to a median average of $6,097 in property tax payments per property per year.
Property tax rates vary across New Hampshire’s different counties. As property tax is determined by mill rates (the amount of tax payable relative to the assessed property value), the average property tax is relative to average property values.
Property values in New Hampshire can range from the top prices in Rockingham – where the average property value is $649,000,00 – to the other end of the scale in Coos, where the average property value is just $279,000.
Here are the average property taxes across New Hampshire’s ten counties.
|New Hampshire county
|Average annual property tax payment
|Average effective property tax rate (based on average home prices)
New Hampshire motor tax
Good news for motorists: New Hampshire’s 0 percent sales tax also extends to vehicle sales.
The only tax motorists need to remember is New Hampshire’s gas tax, which applies to both regular and diesel fuel, and is 22.2 cents per gallon.
New Hampshire estate tax
Few people like to think about what happens after they’re gone, or a loved one has passed away, but inheritance can be a huge gift for the family or loved ones. If you haven’t started financial planning for your estate yet, a financial expert can help make this straightforward and save your family any unnecessary stress after you’re gone.
New Hampshire has made it simpler as the state imposes no estate taxes. This is in sharp contrast with neighboring Massachusetts, which has the lowest threshold for estate tax of any US state, starting at estates of just $1 million.
Only six American states require residents to pay any state inheritance tax as of 2023, and only 12 states currently impose estate taxes. New Hampshire had an estate tax—The Legacy and Succession Tax—until it was repealed on 1 January 2003. Any residents who died before that date will still have to pay estate tax.
And don’t forget: if someone who lives in New Hampshire leaves you an inheritance, but you live in another state, you should check if you’ll be taxed on the gift they leave you according to tax legislation where you live.
New Hampshire retirement tax
The so-called Granite State is home to many happy seniors who enjoy the stunning views, quaint New England towns and, crucially, some of the lowest retirement taxes in the US.
Due to New Hampshire’s lack of state income tax, retirement income – including Social Security, pensions, or other savings accounts – is not taxed by the state. Seniors can also save on state taxes imposed on any income from investments or dividends.
This can make New Hampshire a very attractive destination for retirees who can make big savings on their retirement funds by lowering their tax burden. You can also check out the complete guide to retirement in New Hampshire here.
For further tax guidance and to ensure you’re not paying more tax than you need to, it’s wise to speak to an expert. A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.
Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.