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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A New Hampshire VS COUNTRY B California

Side-by-side analysis of income tax, effective rates, and take-home pay for New Hampshire and California in 2026.

Daniel · CountryTaxCalc Updated June 2026 Tax Comparison 2026
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OVERVIEW
New Hampshire is the only state in the United States with both no income tax and no sales tax — a dual no-tax combination that no other state offers. The Interest and Dividends Tax, New Hampshire's last remaining income-adjacent levy, was fully repealed on January 1, 2025, making the state's income tax exemption complete: wages, salaries, investment income, dividends, interest, capital gains, and retirement distributions are all tax-free at the state level. California, by contrast, has the highest state income tax in the country — 10 progressive brackets reaching 13.3% — plus a 9% combined sales tax. At $100,000 income, a California resident pays approximately $4,241 in state income tax vs $0 in New Hampshire. At $250,000, the savings exceed $19,200 per year. The trade-off: New Hampshire funds its government primarily through property taxes, with an effective average rate of approximately 1.50% — roughly double California's Prop 13-limited 0.74% average. For remote workers, retirees with investment income, and business owners who can leave California without triggering its aggressive FTB audit regime, New Hampshire offers an exceptionally compelling tax profile — particularly for those who want proximity to Boston's professional economy while paying no income or sales tax.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

⛰️
COUNTRY A
New Hampshire
TAX RATE
0%
No Income Tax and No Sales Tax — Unique Dual No-Tax Advantage

No income tax on wages or salaries; Interest & Dividends Tax fully repealed January 1, 2025 (previously 3%); 0% state sales tax (unique among no-income-tax states); property tax ~1.50% average (high — primary revenue source); no estate tax; no capital gains tax

🌴
COUNTRY B
California
TAX RATE
1–13.3%
Highest State Income Tax in the US

10 progressive brackets from 1% to 13.3% (#1 highest in US); 1% Mental Health Services surtax on income over $1M; effective property tax ~0.74% (Prop 13 limited); capital gains taxed as ordinary income at up to 13.3%; 9% combined sales tax average; no state estate tax

TYPICAL ANNUAL DIFFERENCE
Moving from California → New Hampshire at Annual New Hampshire income tax saving vs California (at $100K–$500K income)
$4,200–$44,000+

That's $350–$3,667/month at $100K–$500K income back in your pocket

Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.

GROSS INCOME
⛰️ NH TAX
🌴 CA TAX
SAVINGS
10-YEAR
$50,000
$0 income tax; $0 sales tax; ~$2,250 property (1.50% × $150K home) = ~$2,250 total (no sales tax savings of ~$1,000 vs CA at same spending level)
~$1,500 income tax (CA ~3% effective at $50K); ~$1,800 property (0.74% × $243K home); ~$1,800 sales (9% × $20K spending) = ~$5,100 total
NH saves ~$1,500/yr in income tax at $50K; CA has lower property tax at equivalent home values; NH saves ~$1,800/yr in sales tax
$33,000
$100,000
$0 income tax; $0 sales tax; ~$3,000 property (1.50% × $200K home) = ~$3,000 total
~$4,241 income tax (CA 4.2% effective); ~$3,700 property (0.74% × $500K home); ~$2,700 sales (9% × $30K) = ~$10,641 total
NH saves ~$4,241/yr in income tax at $100K; NH saves ~$2,700/yr in sales tax vs CA. CA property tax lower at equivalent home value due to Prop 13
$69,410
$150,000
$0 income tax; $0 sales tax; ~$4,500 property (1.50% × $300K home) = ~$4,500 total
~$9,900 income tax (CA ~6.6% effective at $150K); ~$5,550 property (0.74% × $750K home); ~$3,600 sales (9% × $40K) = ~$19,050 total
NH saves ~$9,900/yr in income tax + ~$3,600/yr in sales tax at $150K = ~$13,500 in income/sales tax savings
$135,000
$250,000
$0 income tax; $0 sales tax; ~$6,000 property (1.50% × $400K home) = ~$6,000 total
~$19,200 income tax (CA ~7.7% effective at $250K); ~$9,250 property (0.74% × $1.25M home); ~$5,400 sales (9% × $60K) = ~$33,850 total
NH saves ~$19,200/yr in income tax + ~$5,400/yr in sales tax at $250K = ~$24,600 in income/sales tax savings
$246,000
$500K capital gain
$0 state capital gains tax (New Hampshire fully repealed its Interest & Dividends Tax January 1, 2025; all investment income is now tax-free at the state level)
~$44,100 California state capital gains tax (CA taxes capital gains as ordinary income at up to 13.3%; ~8.8% effective rate on $500K gain)
NH saves ~$44,100 on each $500K capital gain event vs California
Depends on frequency of gain events
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⛰️

New Hampshire Pros & Cons

+ PROS
  • No income tax AND no sales tax — New Hampshire is the only US state combining both exemptions; residents pay $0 state income tax on wages, salaries, business income, investment income, capital gains, and retirement distributions, AND $0 state sales tax; the Interest and Dividends Tax was fully repealed January 1, 2025, completing the income tax exemption
  • No capital gains tax — New Hampshire has no tax on capital gains from stock sales, real estate, cryptocurrency, or business disposals; California taxes the same gains as ordinary income at up to 13.3%; South Dakota and Wyoming also have no capital gains tax, but neither offers the sales tax bonus
  • Boston proximity — New Hampshire's southern tier (Manchester, Nashua, Portsmouth) sits within commuting distance of Boston; residents access Boston's world-class professional economy while paying no state income tax vs Massachusetts's 5% flat rate or California's 13.3%
  • No estate tax — New Hampshire has no state estate tax; California also has no state estate tax; equal on this dimension, but NH's income tax structure gives it an advantage for accumulating wealth to transfer
  • Lower cost of living than California — New Hampshire housing costs are substantially below California's; even Manchester and Nashua, NH's most expensive markets, run $350,000–$500,000 median vs $700,000–$1.2M+ in California's major metros
− CONS
  • High property tax — New Hampshire's effective property tax rate averages ~1.50%, the 5th-highest in the US; this is the primary trade-off for no income or sales tax; a $350,000 home costs approximately $5,250/year in property tax vs $2,590 in California at the same value; renters benefit more from NH's tax structure than homeowners
  • Cold winters — New Hampshire winters are harsh; Manchester averages 63 inches of snow and temperatures regularly below 10°F; very different from California's Mediterranean climate
  • Limited urban infrastructure — New Hampshire's largest city (Manchester, ~115,000 population) is modest; cultural infrastructure, specialist healthcare, entertainment, and career networking are well below California's major metros
  • No Prop 13 equivalent — California's property tax is limited by Proposition 13 to 1% of assessed value with a 2% annual cap; long-time California homeowners pay very low effective property taxes on appreciated homes; New Hampshire offers no equivalent assessment cap
🌴

California Pros & Cons

+ PROS
  • Top-tier career ecosystem — Silicon Valley, Los Angeles, San Diego, and San Francisco together represent the world's largest technology, entertainment, biotech, and venture capital ecosystem; career proximity is a genuine economic argument for accepting California's high taxes
  • Superior climate — California's Mediterranean climate (mild winters, 300+ sunny days per year in many areas) is the most commonly cited reason residents stay despite the highest income tax in the nation
  • Low effective property tax (Prop 13) — Long-time California homeowners pay property taxes based on the assessed value at time of purchase, capped at 2% annual increases; many homeowners pay under 0.5% effective rate; California's statewide effective average is ~0.74% vs New Hampshire's 1.50%
  • No state estate tax — California has no state estate tax; estates of any size pay $0 in California estate tax (federal applies above ~$13.99M); equal to New Hampshire on this point
  • Social Security exempt — California does not tax Social Security income at the state level; New Hampshire also exempts Social Security; both states are equal here for retirees on Social Security
− CONS
  • Highest state income tax in the US — California's 13.3% top rate is the highest marginal state income tax rate nationally; at $250,000 income, approximately $19,200 in state income tax; at $500,000, approximately $38,000–$44,000; New Hampshire residents pay $0 on all of this
  • Sales tax on almost all purchases — California's combined sales tax averages ~9% and applies to most goods (groceries and prescription drugs are exempt); New Hampshire has no state sales tax at all; a family spending $60,000/year on taxable goods saves ~$5,400/year in sales tax by choosing New Hampshire
  • Capital gains taxed as ordinary income — California taxes long-term capital gains at the same progressive rates as ordinary income, up to 13.3%; no preferential rate exists; New Hampshire charges $0 on capital gains; investors and business owners face dramatically different outcomes
  • FTB residency audit risk — California's Franchise Tax Board aggressively pursues residents who claim to have left the state; establishing non-resident status requires careful documentation of a 'closest connections' change; leaving California is complex for high earners with ongoing California business ties
FAQ

Frequently Asked Questions

Does New Hampshire have an income tax?

No. New Hampshire has no income tax on wages or salaries. The state previously taxed interest and dividend income at 3% (the 'Interest and Dividends Tax'), but that was fully repealed on January 1, 2025. As of 2026, New Hampshire residents pay $0 state tax on wages, salaries, investment income, dividends, interest, capital gains, and retirement distributions. New Hampshire is the only US state with both no income tax and no sales tax.

Does New Hampshire have a sales tax?

No. New Hampshire is one of five US states with no general sales tax (along with Alaska, Delaware, Montana, and Oregon). New Hampshire is unique in combining no sales tax with no income tax — no other state offers both exemptions. The absence of sales tax benefits consumers on every taxable purchase: a family spending $60,000/year on goods saves approximately $5,400/year vs California's ~9% combined rate.

Why is New Hampshire's property tax so high?

New Hampshire funds most government services through property taxes because it has no income or sales tax — so property is the primary tax base. The state's effective average property tax rate of approximately 1.50% is the 5th-highest in the US. Individual town rates vary significantly, from around 0.9% in some resort towns to over 2.5% in some rural towns. The high property tax is the principal trade-off for the dual no-tax advantage. Renters benefit more from New Hampshire's tax structure than homeowners with large properties.

Is New Hampshire better than California for remote workers?

For most fully remote workers, yes — especially at income above $100,000. At $150,000: NH saves ~$13,500/year in income plus sales taxes vs California. At $250,000: ~$24,600/year. The trade-offs are property tax (NH is higher for homeowners) and climate (NH winters are harsh vs California). For remote workers who rent in New Hampshire's lower-cost cities (Manchester, Nashua), the income + sales tax savings are substantial with minimal property tax exposure. California's FTB exit rules require careful documentation for departing high earners.

What happened to New Hampshire's Interest and Dividends Tax?

The New Hampshire Interest and Dividends Tax (I&D Tax) was a 5% tax on interest and dividend income (reduced to 3% in 2024). It was phased out and fully repealed on January 1, 2025. As of the 2025 tax year and beyond, New Hampshire residents pay $0 state tax on all income including interest, dividends, capital gains, and investment income. This completed New Hampshire's status as a true no-income-tax state on all income types.

How does California's Prop 13 compare to New Hampshire's property tax?

California's Proposition 13 (1978) caps property tax at 1% of assessed value at purchase, with a maximum 2% annual increase. This makes California's effective property tax rate very low for long-time homeowners — often 0.3–0.7% of current market value. New Hampshire has no such cap: property is reassessed regularly at market value, and the state's effective rate averages ~1.50%. For a buyer purchasing a $500,000 home today: New Hampshire costs ~$7,500/year in property tax; California costs ~$3,700/year under Prop 13's 1% base rate.

Can I live in New Hampshire and work in Massachusetts?

Yes, and many people do. Southern New Hampshire cities (Nashua, Manchester, Salem) are popular Boston-area suburbs where residents pay $0 New Hampshire state income tax while commuting to Massachusetts jobs. Massachusetts taxes income earned in Massachusetts at 5% flat rate regardless of where you live. However, remote workers who work exclusively from New Hampshire for a Massachusetts employer may be able to avoid Massachusetts income tax — this was contested during COVID and remains an active legal and planning issue. Consult a tax professional if you're in a hybrid work arrangement.

Is New Hampshire good for retirees from California?

It depends on income composition. New Hampshire is excellent for retirees with large investment portfolios, IRA distributions, or capital gains — all completely tax-free since the I&D Tax repeal in 2025. Social Security is also exempt. The main challenge: New Hampshire's high property taxes (1.50% average) can be significant for homeowners with paid-off high-value homes. California's Prop 13 creates very low property tax for long-time California homeowners. Retirees who rent or own modest homes benefit most from New Hampshire. Retirees with expensive homes should compare total costs carefully.
From the brief
NL27%new 2027 rate, down from 30%
DK65.4kkr/mo threshold, cut from 78k
MT1940snon-dom regime unchanged since
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