New Hampshire does not levy a state income tax on individual wages and salary. The Interest & Dividends Tax was fully repealed effective 2025.
Tax Overview
New Hampshire has never taxed wages or earned income. The state did levy a 5% Interest & Dividends Tax on investment income, but this was phased out and fully repealed effective January 1, 2025. With no income tax and no sales tax, New Hampshire relies primarily on property taxes — among the highest in the nation — along with business taxes and selective consumption taxes to fund state and local government.
Other Taxes in New Hampshire
Property taxes are the primary revenue source for local government. New Hampshire has one of the highest effective property tax rates in the country, averaging around 1.86%.
7.5% Business Profits Tax (BPT) on business income over $50,000. This applies to all business organizations including sole proprietorships.
0.55% Business Enterprise Tax (BET) on the enterprise value tax base (compensation, interest, and dividends paid). BET paid can be credited against BPT liability.
8.5% tax on restaurant meals, hotel rooms, and car rentals — a significant revenue source given New Hampshire's tourism industry.
$7.50 per $1,000 of the sale price (0.75%), split equally between buyer and seller on real estate transactions.
Federal Taxes Still Apply
While New Hampshire does not levy a state income tax, residents are still subject to federal income tax, FICA taxes (Social Security and Medicare), and self-employment tax. Use our Federal Income Tax Calculator to estimate your federal tax liability.