Taxes in New Hampshire: Tax Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Taxes in New Hampshire: State Tax Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
New Hampshire has achieved a rare status: a state with no income tax on wages and no sales tax. The state’s Interest and Dividends Tax, which taxed investment income at 5%, was fully phased out at the end of 2024, making New Hampshire a true zero-income-tax state starting in 2025. The trade-off is among the highest property taxes in the nation, which fund local services in lieu of broader-based state taxes. New Hampshire’s “Live Free or Die” ethos is reflected in its lean tax structure.
New Hampshire Income Tax Rates (2026)
New Hampshire has no state income tax. This applies to:
- Wages and salaries — Not taxed (never were)
- Self-employment income — Not taxed
- Interest and dividends — Not taxed (the I&D Tax was phased out as of January 1, 2025)
- Capital gains — Not taxed
- Retirement income — Not taxed
- Social Security benefits — Not taxed
No state income tax return is required for individuals.
Sales Tax
New Hampshire has no state or local sales tax. This applies to all purchases:
- Retail goods
- Vehicles
- Electronics
- Clothing
- Prepared food (no restaurant meal tax at the state level)
New Hampshire is one of five states with no sales tax. Cross-border shopping from Massachusetts, Vermont, and Maine residents is a significant economic driver for New Hampshire retailers.
Property Tax
| Metric | Amount |
|---|---|
| Average effective rate | ~1.86% |
| National average | 0.99% |
| Rank | Among the top 5 highest nationally |
Property taxes are the primary revenue source for New Hampshire municipalities and school districts. There is no state income or sales tax to subsidize local services, so property taxes carry an outsized burden.
State education property tax: A statewide property tax of ~$3.08 per $1,000 of equalized assessed value is levied to fund education, in addition to local school, municipal, and county taxes.
Assessment: Properties are assessed at full market value. Reassessment cycles vary by municipality (every 5 years is common).
Example: A home valued at $400,000 at a combined rate of ~$22 per $1,000 pays approximately ~$8,800 per year. In some towns, rates exceed $25 per $1,000, pushing a $400,000 home above ~$10,000 annually.
Low and moderate income homeowners property tax relief: The state offers a property tax relief program for qualifying homeowners with income below certain thresholds, providing a refund of a portion of the state education property tax.
Other Taxes
- Estate and inheritance tax: New Hampshire does not impose a state estate tax or inheritance tax.
- Capital gains: Not taxed at the state level.
- Business profits tax (BPT): Businesses with gross income above ~$92,000 pay a 7.50% tax on net business profits. This applies to all business forms, including sole proprietors, partnerships, and LLCs.
- Business enterprise tax (BET): 0.55% on the enterprise value tax base (compensation + interest + dividends paid). The BET serves as a backup minimum tax. BET paid can be credited against BPT liability.
- Meals and rooms tax: 8.50% on prepared meals served at restaurants and on room rentals (hotels, short-term rentals). This functions as a targeted consumption tax.
- Fuel tax: ~$0.222 per gallon.
- Cigarette tax: ~$1.78 per pack.
- Alcohol tax: No excise tax on beer and wine; the state controls liquor sales through state-run stores with volume discounts that attract cross-border shoppers.
- Real estate transfer tax: 0.75% paid by both buyer and seller (1.50% total on each transaction).
- No local income taxes.
Tax Breaks and Credits
- No income tax filing required: Individuals do not file a state income tax return.
- Property tax relief: The Low and Moderate Income Homeowners Property Tax Relief program provides refunds of a portion of the state education tax for qualifying claimants.
- Elderly exemption: Municipalities may adopt an elderly exemption that reduces the assessed value of a home for residents 65+. The exemption amount and qualifying income vary by town (local option).
- Disabled veterans’ credit: A mandatory ~$4,000 reduction in assessed value for qualifying veterans (towns may vote for higher amounts).
- Blind exemption: ~$15,000 reduction in assessed value.
- No business income tax on wages: Sole proprietors and self-employed individuals pay the BPT/BET only on business income above the filing threshold, not on all earned income.
- No 529 plan deduction: Not applicable (no income tax).
Key Takeaways
- New Hampshire has no income tax of any kind (wages, dividends, interest, capital gains) and no sales tax
- Property taxes averaging ~1.86% are among the highest in the nation and are the primary funding mechanism for local services
- The 8.50% meals and rooms tax acts as a targeted consumption tax on dining and lodging
- The business profits tax (7.50%) affects business owners and the self-employed
- No state estate or inheritance tax, and no individual income tax return is required
Next Steps
- Compare New Hampshire to other states at State Income Tax Comparison: All 50 States Ranked
- Understand your federal obligation with the Federal Income Tax Guide 2026
- Explore deductions you may be missing — Tax Deductions You’re Probably Missing
- Ready to file your federal return? See How to File Your Taxes Step by Step
Tax information is for educational purposes only. Consult a licensed tax professional.