New Hampshire does not tax wages, salaries, or self-employment income. The state’s Interest and Dividend (I&D) tax was fully repealed effective January 1, 2025 — it was 4% in 2023, 3% in 2024, and 0% from 2025 onward. New Hampshire also has no sales tax. The primary tax burden for residents comes from property taxes, which average approximately 1.5% effective rate, among the higher rates in the US. Businesses operating in New Hampshire face a Business Profits Tax (7.5%) and Business Enterprise Tax (0.55%).
At a glance
Key Facts
State Income Tax (Wages)
None — New Hampshire does not tax wages, salaries, tips, or self-employment income
Interest & Dividend (I&D) Tax
Fully repealed effective January 1, 2025 — 0% on all interest and dividend income. Was 4% in 2023, 3% in 2024, repealed by HB 2 (2023 session).
Sales Tax
None — New Hampshire has no state sales tax and no local sales tax; this attracts cross-border shoppers from Massachusetts and Maine
Property Tax
Effective average ~1.5% — among the higher rates in the US; funded primarily through local school districts
Business Profits Tax (BPT)
7.5% on net business income for businesses with more than $109,000 of gross business income (periods beginning on or after January 1, 2025)
Business Enterprise Tax (BET)
0.55% on enterprise value (wages, interest, dividends paid by the business); applies to businesses with more than $298,000 of gross receipts or enterprise value tax base (periods beginning on or after January 1, 2025)
Rooms & Meals Tax
8.5% on restaurant meals, hotel stays, and motor vehicle rentals
Introduction
New Hampshire’s tax system is defined by two distinctive features: the complete absence of a general income tax on wages and the complete absence of a sales tax. This ‘double zero’ makes New Hampshire unique among northeastern states and has long attracted residents seeking to escape Massachusetts, Connecticut, or Maine’s tax burdens. The state’s motto is ‘Live Free or Die’ — and its tax policy embodies that philosophy.
The catch has always been property taxes. New Hampshire relies heavily on local property taxes to fund public services, particularly public schools, and the resulting effective rates are among the higher in the US at roughly 1.5% on average. For homeowners, this means the income tax savings must be weighed against significantly higher annual property tax bills than in neighboring Massachusetts. As of January 1, 2025, New Hampshire is a complete zero-income-tax state — the Interest and Dividend (I&D) tax was fully repealed by HB 2 (2023 session), eliminating the last vestige of investment income taxation.
Section 01
New Hampshire’s No-Wage-Tax System: Who Benefits Most
New Hampshire’s exemption from income taxation on wages and salaries is particularly valuable for high-wage earners who have the flexibility to live in New Hampshire while working remotely or commuting to Massachusetts. For a Massachusetts resident earning $200,000 per year, moving to New Hampshire eliminates the 5% Massachusetts income tax (plus the 4% surtax on income above about $1.1 million), representing annual savings of about $9,700 on $200,000 of wages (single filer).
New Hampshire vs Massachusetts for a Remote Worker
Tax Category
New Hampshire
Massachusetts
NH Annual Saving
Income Tax ($150K earner)
$0
~$7,180
~$7,180
Income Tax ($300K earner)
$0
~$14,680
~$14,680
Sales Tax (heavy buyer)
$0
6.25%
Significant
Property Tax ($500K home)
~$7,500
~$5,000
−$2,500 (NH more expensive)
The math typically favours New Hampshire for earners above $100,000 who own moderately priced homes. However, for lower-income renters, New Hampshire’s high property taxes (passed through in rents) can offset the income tax savings.
The Expired Massachusetts COVID-Era Telework Rule
A caveat for Massachusetts commuters: during the COVID pandemic, Massachusetts adopted an emergency regulation (830 CMR 62.5A.3) that taxed nonresidents working remotely for Massachusetts employers as if they still worked in Massachusetts. New Hampshire challenged it, the U.S. Supreme Court declined to hear the case in June 2021, and the regulation expired on September 13, 2021. Since then, Massachusetts sources nonresidents’ wages to where the work is performed, apportioned by days worked in Massachusetts, so New Hampshire residents still owe Massachusetts tax on wages for days physically worked there.
Interest and Dividend Tax — Fully Repealed January 1, 2025
New Hampshire’s Interest and Dividend tax was fully repealed effective January 1, 2025 by HB 2 (passed 2023 session). The phase-out schedule was:
2023: 4%
2024: 3%
January 1, 2025: Fully repealed (0%)
From 2025 onwards, New Hampshire residents owe $0 I&D tax on any amount of dividend or interest income. A retirement investor with $50,000 in dividend income owes $0 New Hampshire state tax in 2026. Capital gains were never subject to the I&D tax.
Section 02
New Hampshire Property Taxes: High Rates, School Funding, and How to Manage
New Hampshire’s property taxes are the mechanism by which the state funds public services — particularly K-12 education — in the absence of income and sales taxes. The result is effective property tax rates that are among the higher in the United States.
Property Tax Rates by New Hampshire Town
Rates per $1,000 of assessed value are set annually by each municipality; look up your town’s current rate in the NH Department of Revenue Administration’s published tax rates.
Note: NH property is assessed at 100% of fair market value (full value assessment), so the tax rate applies directly to the home’s market value. Rates vary significantly by town because local school funding is the largest component.
Property Tax Components
New Hampshire property tax bills have several components:
Local school tax: The largest component, set by each school district
Statewide education tax: A statewide education property tax component set annually by the state
County tax: Set by each county for county services
Local municipal tax: For town/city government services
Low-Income Homeowner Relief
New Hampshire offers a Low and Moderate Income Homeowners Property Tax Relief program. Eligible homeowners can apply to the state for partial reimbursement of the statewide education property tax portion. Eligibility is income-based (roughly $37,000 single / $47,000 married) and the benefit is modest. Most NH homeowners receive no meaningful property tax relief.
Section 03
New Hampshire Business Taxes and the Complete Resident Tax Picture
Business Profits Tax (BPT) and Business Enterprise Tax (BET)
New Hampshire compensates for its lack of income and sales taxes partly through business taxes that apply to both corporations and pass-through entities:
Business Profits Tax (BPT): 7.5% on net income from business activity. Applies to businesses (C-corps, S-corps, partnerships, and sole proprietors) with more than $109,000 of gross business income. For a sole proprietor or LLC owner, BPT applies to their self-employment income — this is often misunderstood by people assuming New Hampshire has ‘zero’ income taxation. The BPT effectively taxes self-employment and business income at 7.5%.
Business Enterprise Tax (BET): 0.55% on the ‘enterprise value tax base’ — which includes compensation paid to employees and officers, interest paid to lenders, and dividends paid to owners. Applies to businesses with more than $298,000 of gross receipts or enterprise value tax base. The BET is essentially a payroll and capital tax.
BET credit against BPT: Any BET paid can be credited against BPT owed in the same period, preventing full double taxation.
New Hampshire Rooms and Meals Tax
New Hampshire’s 8.5% Rooms and Meals Tax serves as the state’s primary consumption tax in the absence of a sales tax. It applies to:
Restaurant meals and prepared food
Hotel, motel, and short-term rental stays
Car rentals
Grocery store purchases (unprepared food) are not taxed — there is no New Hampshire sales tax on retail goods at all.
The Complete New Hampshire Tax Picture
Resident Type
Primary Tax Burdens
Key Advantages
W-2 Employee, remote worker
High property taxes if homeowner
Zero income tax on all wages; zero sales tax
Self-employed / LLC owner
7.5% BPT on net business income; property taxes
Zero income tax on wages; no sales tax
Retiree with investment income
Property taxes (I&D tax fully repealed January 1, 2025)
Zero tax on Social Security; zero tax on IRA withdrawals; zero capital gains tax; zero dividend/interest tax
Business employer
BPT (7.5%) + BET (0.55%)
No corporate income tax per se; competitive for certain structures
For retirees with significant investment portfolios, New Hampshire is now fully compelling following the I&D tax repeal effective January 1, 2025. Combined with zero capital gains taxation and zero tax on retirement account distributions, New Hampshire offers a truly comprehensive tax exemption on investment income.
New Hampshire’s Business Profits Tax and cross-border work with Massachusetts create real complexity for residents — TaxHub’s licensed CPAs can help you navigate your exact situation and ensure you’re not overpaying.
âš Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
If you have foreign income or investments alongside your New Hampshire residency, Greenback specialises in complex multi-jurisdiction tax situations for individuals with global financial interests.
⚠Not the cheapest option — best for complex situations and expats who want a dedicated CPA.
Does New Hampshire have a state income tax in 2026?
No — New Hampshire has zero state income tax of any kind in 2026. It does not tax wages, salaries, tips, self-employment income, capital gains, dividends, or interest. The last vestige of income taxation — the Interest and Dividend (I&D) tax — was fully repealed effective January 1, 2025. A W-2 employee, retiree living on dividends, or investor in New Hampshire all owe $0 New Hampshire income tax in 2026.
Q
When was New Hampshire’s Interest and Dividend tax repealed?
New Hampshire’s Interest and Dividend (I&D) tax was fully repealed effective January 1, 2025. The repeal was enacted by HB 2 during the 2023 legislative session, accelerating an earlier phase-out schedule. The final rate schedule was: 4% in 2023, 3% in 2024, and 0% (fully repealed) from January 1, 2025. From 2025 onwards, New Hampshire has zero income taxation of any kind — no taxes on wages, investment income, dividends, interest, or capital gains at the state level.
Q
What are New Hampshire’s property tax rates?
New Hampshire property taxes are assessed at 100% of fair market value (unlike states that assess at a fraction of value), and rates vary dramatically by town. The statewide average effective rate is approximately 1.5% — among the higher rates in the US — and individual towns can be well above or below that average. On a $500,000 home at the average rate, annual property taxes would be approximately $7,500.
Q
Does New Hampshire have a sales tax?
No — New Hampshire has no state sales tax and no local sales tax. All retail goods (clothing, electronics, furniture, groceries) can be purchased without any sales tax. This makes New Hampshire a popular shopping destination for residents of neighboring Massachusetts (6.25% sales tax) and Maine (5.5% sales tax). New Hampshire does levy an 8.5% Rooms and Meals Tax on restaurant meals, hotel stays, and car rentals, but this is a specific excise tax, not a general sales tax.
Q
Do self-employed people in New Hampshire owe any income tax?
Yes — this is a common misconception. While New Hampshire does not tax wages from employment, self-employed individuals and business owners are subject to the Business Profits Tax (BPT) at 7.5% on net business income if their gross business income exceeds $109,000. The Business Enterprise Tax (BET) at 0.55% also applies to businesses with gross receipts or enterprise value tax base above $298,000. So a freelancer or consultant earning $150,000 net in New Hampshire owes approximately $11,250 in BPT — comparable to or exceeding the income tax in some other states.
Q
Is New Hampshire a good state for retirement?
New Hampshire is highly attractive for retirees as of 2025. Retirement account withdrawals (IRA, 401k, pension) have never been taxed by New Hampshire. Social Security is not taxed. Capital gains are not taxed. Dividends and interest are also untaxed following the full repeal of the I&D tax on January 1, 2025. The main drawback is high property taxes (average about 1.5% effective rate), which can be burdensome for retirees on fixed incomes. However, for retirees who own a paid-off home and have significant investment portfolios, New Hampshire’s lack of income taxation on all income types makes it highly competitive with Florida and Texas.
Q
Does Massachusetts tax NH residents working remotely for MA employers?
Generally only for days physically worked in Massachusetts. During the COVID pandemic, Massachusetts adopted an emergency regulation (830 CMR 62.5A.3) taxing nonresidents who worked remotely for Massachusetts employers as if they still worked in Massachusetts. New Hampshire challenged it (New Hampshire v. Massachusetts), the U.S. Supreme Court declined to hear the case in June 2021, and the regulation expired on September 13, 2021. Since then Massachusetts sources nonresidents’ wages to where the work is performed, apportioned by days worked in the state. Check current Massachusetts DOR guidance and consult a tax professional for your situation.
Disclaimer:This guide provides general tax information for educational purposes only. New Hampshire’s Interest and Dividends Tax was fully repealed effective January 1, 2025 per HB 2 (2023 session) and RSA Chapter 77 repeal. New Hampshire Business Profits Tax and Business Enterprise Tax rules are complex and subject to change. Massachusetts rules for taxing nonresident remote workers are subject to change. Always consult a qualified tax professional.