Parsing any state’s tax code can be a multifaceted and complicated affair, but small business owners especially should understand what types of taxes they are required to pay if they live and operate their company in New Hampshire. New Hampshire is generally considered to be a business-friendly state when it comes to taxes—the state was ranked 6th in terms of state business tax climate—but there are a few things to know about what to expect when taxes are due.
What is the Small Business Tax Rate in New Hampshire?
Small business owners in NH generally have two main taxes they should be aware of: The Business Profits Tax (BPT) and the Business Enterprise Tax (BET). The BPT rate is 8.5% of a business’s income that reports gross receipts of over $50,000, meaning that many self-employed people or business owners of small companies will more than likely be paying the BPT. The BET rate is 0.75% on the enterprise value tax base, calculated as the total amount of compensation paid out by a business. The BET is assessed on businesses with gross receipts over $150,000 or an enterprise value tax base over $75,000.
According to the New Hampshire state website, “any business organization, organized for gain or profit carrying on business activity within the State is subject to this tax. However, organizations with $50,000 or less of gross business income from all their activities are not required to file a return. For taxable periods ending on or after December 31, 2022, this filing threshold is increased to $92,000.”
What is the New Hampshire Personal Net Income Tax Rate?
There is currently no Personal Net Income Tax Rate. However, businesses must pay a 5% tax on all interest and dividend income. Check with your accountant if this tax will impact your business.
Recently, New Hampshire voters decided to phase out the Interest and Dividends (I&D) Tax starting at 4% for taxable periods ending on or after December 31, 2023, 3% for taxable periods ending on or after December 31, 2024, 2% for taxable periods ending on or after December 31, 2025 and 1% for taxable periods ending on or after December 31, 2026. The I&D Tax is then repealed for taxable periods beginning after December 31, 2026, and will no longer require consideration by NH small businesses.
Is There a Sales Tax in New Hampshire?
None! This, along with a low New Hampshire income tax rate of 5%, are some of the most attractive tax benefits to both business owners and employees. Taking advantage of New Hampshire’s business friendly tax code is easy, and with the guidance of a tax preparation service and bookkeeping firm. At Appletree, we’ve been serving the New Hampshire business community for years, and we bring all of our experience and knowledge of what’s best for business in the state to your company.