Popularly known as the “Granite State,” New Hampshire impresses anyone with its spectacular White Mountains and stunning fall foliage. Aside from its natural wonders, doing business in New Hampshire can also bring positive changes. But before you dive in, you must know how sales tax in New Hampshire works.
This guide breaks down everything you need to know about New Hampshire, one of the five
states without sales tax. By the end of this comprehensive guide, you’ll understand New Hampshire’s unique tax regulations with confidence and ease.
Is There Sales Tax in New Hampshire?
Throughout its tariff history, New Hampshire has never had any sales tax. Currently, the state does not have plans to change its tax system anytime soon.
This brings the question: Why is there no sales tax in New Hampshire?
The Granite State remains unclear with its reasoning, but many tax experts speculate that it’s simply part of the state’s frugal nature and the limited government it has.
Implementing sales tax would mean bringing changes to the state constitution. But with New Hampshire’s limited government, even minor changes could lead to immense intricacies. This is what the state may have been avoiding throughout the years.
There had been efforts to change this system, but voters in New Hampshire and the legislature have continuously rejected the idea of imposing sales taxes. In that case, how does the state fund its projects?
The state’s main source of revenue is its
property taxes, ranking as the 4th state with the highest property tax rate. For instance, Sullivan County alone has an effective property tax rate of 2.38% as of 2023.
Additionally, New Hampshire also
collected revenue from
interest and dividend taxes. However, since
January 23, 2025, the state has declared that the 3.00% interest and dividend tax has been repealed.
Beyond New Hampshire Sales Tax: Other Taxes You Should Know
Apart from the state’s high property taxes or the repealed interest and dividend taxes, there are still
other taxes in New Hampshire that every business owner should know.
The list may seem overwhelming at first glance, but don’t worry. Among these various tax types, only a few can directly affect specific businesses in New Hampshire.
Let’s discuss the most relevant tax types below.
Meals & Rental Tax (MRT)
In New Hampshire, hotel patrons or any building that offers lodging or sleeping accommodations with room and meal services are subject to an
8.50% tax. The same also applies to restaurants and motor vehicle rentals.
The tax must be collected and remitted by business owners every 15th of each month.
Meals and Rental Tax are also imposed on the following types of catering businesses:
- Banquets
- Field days
- Cafeterias
- Barbecues
- Receptions
- Private homes
- Special events
- Outings or picnics
- Concerts or races
- Fairs and bazaars
- Mobile catering or vending trucks
To learn more about Meals and Rental Tax in New Hampshire, you can read the state’s official guidelines in
RSA 78-A and
Rev 7000.
Timber Tax
Businesses engaged in the wood-cutting industry must be aware of the
RSA 79 Forest Conservation and Taxation in New Hampshire. This rule declares that the cutting and selling of wood or timber are subject to a
10.00% timber tax based on the stumpage value.
The wood‘s value will be assessed by a municipal officer after reporting the collected timber through the
Form PA-8. This form is provided by the municipal government.
Exemptions only apply if the wood and timber cut is:
- Not being sold or bartered
- Cut for the usage of school districts and county projects
- Used by the federal, state, or municipal government projects
To learn more about Timber Tax in New Hampshire, you may read the state’s official guidelines in
Rev 3400.
Tobacco Tax
New Hampshire also follows many other states when it comes to imposing a tobacco tax. Under
RSA 78, various tariff rates are applied to tobacco and cigarette products in general.
There is a $1.78 tax
imposed on each package containing 20 cigarettes or small cigars. Any other tobacco product is taxed at a rate of 65.03% of the wholesale sale price.
Additionally, since
January 1, 2020, New Hampshire has been taxing electronic cigarettes (e.g, vapes) as well.
- A liquid container that can be opened and carries nicotine is subject to an 8.00% tobacco tax. This tax is applied to the wholesale sales price.
- Closed cartridges or containers with liquid or substances containing nicotine that are not meant to be opened are taxed at a rate of $0.30 per milliliter of the liquid or substance’s total volume.
To learn more about Tobacco Tax in New Hampshire, you may read the state’s official guidelines in
Rev 1000.
Alcohol Tax
Much like tobacco, New Hampshire also enforces
RSA 175-180.
With this law, a
$0.30 per-gallon tax is charged for every sale of beer within the state. The collected tax will be used for New Hampshire’s
Alcohol Abuse Prevention and Treatment Fund program.
Communication Services Tax (CST)
While most
services are not taxable in New Hampshire, rental and communication services are an exception. For instance, the Communication Services Tax (CST) has been enforced since 2024.
Under the
RSA 82-A, a
7.00% tax is charged on two-way communication services. This includes:
- Channel services
- Internet service providers
- Cable and satellite services
- Mobile or prepaid telecommunication services
To learn more about the rules of Communication Services Tax in New Hampshire, you can read the state’s official guidelines
here.
Business Enterprise Tax (BET)
While New Hampshire also has no income tax, the state has introduced a similar tax called the Business Enterprise Tax (BET).
The rate for Business Enterprise Tax is 0.55% of the assessed sum of all expenses paid and accrued by a business enterprise. This is effective for taxable periods ending December 31, 2022.
But for taxable periods beginning January 1, 2025, businesses with more than $298,000 of total revenue from all activities must file a Business Enterprise Tax return. The same applies to businesses with an assessed value tax base of $298,000. The filing period for Business Enterprise Tax is adjusted every two years.
Need more details about Business Enterprise Tax? Read the state’s official rules in
RSA 77-E and
Rev 2400.
Business Profits Tax (BPT)
Once a business pays off its Business Enterprise Tax, it can be used as credits when it comes to Business Profits Tax (BPT).
But what’s the difference between the two?
- Business Profits Tax (BPT) – focused on a business’s marketing activities and income within the state.
- Business Enterprise Tax (BET) – based on a company’s expenses and total assessed tax base value established by the compensation, interests, and dividends it has paid or accrued during a taxable period.
The rate for Business Profits Tax is 7.60% for taxable periods ending on or after December 31, 2022. In the following year of 2023, this rate decreased to 7.50%.
For taxable periods beginning on or after January 1, 2025, businesses with a total income of more than $109,000 are required to file a Business Profits Tax return. Similar to Business Enterprise Tax, this filing period is adjusted once every two years.
Filing a return for Business Profits Tax or Business Enterprise Tax can be done through the state’s official site,
Granite Tax Connect (GTC). An account must be created first to proceed.
Learn more about Business Profits Tax through the state’s official files:
RSA 77-A and
Rev 300.
New Hampshire and Remote Sellers
On July 19, 2019, New Hampshire passed
SB 242—a bill meant to protect New Hampshire remote sellers from being subject to sales and use tax liabilities in other states.
However, this rule mainly prevents fraudulent sales tax collection. New Hampshire’s
Department of Justice (DOJ) requires other states to send a written notice to determine whether a remote seller should charge and collect sales and use tax in another state.
After 45 days, the DOJ will confirm if a business should comply with the sales and use tax policies of another state.
In that case, how do you know if you’re liable to collect and remit sales tax in other states? The determining factor is whether you have a sales tax nexus or not.
Sales Tax Nexus
Establishing a
sales tax nexus in a state means that you’re actively
engaged in business in that state. Sales tax nexus has 2 principal types:
- Physical nexus
- Economic nexus
When a business creates one of these nexus, it is required to collect sales tax in most states.
But since New Hampshire has no sales tax, the state has no regulations for creating a physical or an economic nexus. However, a New Hampshire remote seller can still trigger a sales tax nexus in other states despite the existence of SB 242.
Once a nexus is established and a written notice has been approved by the New Hampshire DOJ, remote sellers will be required to register and collect sales tax in other states.
Below are the factors that define whether you have a physical or an economic nexus in another state.
Physical Nexus
A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. Here are the common factors that determine a physical nexus in most states:
- Physical Location: Having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business in a state.
- Inventory in the State: This covers situations where you store your products within a state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
- Employees, independent contractors, agents, or other representatives operating within a state on your behalf.
- Affiliate Nexus: You could trigger a physical nexus if you have affiliates in a state. This applies whether they operate online or in-person, and have collectively sold a total amount of sales or delivered transactions that may meet a state’s nexus threshold.
- Presence at Trade Shows: In some states, such as Wyoming or Hawaii, for example, presence at trade shows and making a specific amount of sales during such events can also trigger a physical nexus.
Economic Nexus
States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.
In general, the thresholds in most states are set at:
- 200 total transactions within the state and/or
- $100,000 in gross revenue in the previous or current calendar year’s sales or the prior 12 months.
However, this is only a common standard. Other states may have different amounts set for their economic nexus thresholds. For example,
California has a higher requirement of
$500,000 in total sales in the previous or current calendar year.
Once you meet these thresholds in other states, even remote sellers from New Hampshire can still have the responsibility of collecting sales tax.
To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.
Business Compliance Obligations in New Hampshire
Without a sales tax, businesses in New Hampshire aren’t required to register for a
sales tax permit. However, there are still other legal duties you must follow to stay compliant with the Granite State.
In New Hampshire, businesses must register for
specific licenses, such as:
- Local Business Permits – New Hampshire advises business owners to contact the city or town clerk for municipal permits and licenses.
- Tobacco Tax Operator’s License – Apply for a Tobacco License through the Granite Tax Connect state website.
- Meals & Rooms (Rentals) License – Also called an “Operator’s License.” You can apply for this license via the Granite Tax Connect state website.
- Communication Services Retailer’s Tax License – Also called “Registration Number.” You can apply for this license through the Granite Tax Connect state website.
- Liquor License – You can apply for this license via the New Hampshire Liquor Commission (NHLC) government website.
Conclusion
Despite having no sales tax, understanding relevant tax obligations in New Hampshire is always crucial to keep your business running smoothly. Remote sellers from New Hampshire could also face the burden of handling sales tax responsibilities in other states. Failure to comply may lead to
penalties that could harm your business.
To ensure your business stays tax compliant even in a no-sales-tax state, you can make things easier by consulting tax professionals like TaxHero.
Schedule a call with our CEO, who will personally walk you through the intricacies of sales tax compliance in every state.
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