New Hampshire is famous for having no sales tax and no tax on wages, and from 2025 the Interest and Dividends Tax is gone too. That makes it one of the lowest-tax states for individuals. Businesses, however, pay two taxes that most states don't have: the 7.5% Business Profits Tax (BPT) and the 0.55% Business Enterprise Tax (BET). Unlike most states, New Hampshire applies these to LLCs and sole proprietorships, not just corporations.
This guide covers New Hampshire's business taxes for 2026, with worked examples and comparisons with its New England neighbors.
New Hampshire business taxes at a glance
A New Hampshire business pays the 7.5% Business Profits Tax on its profit if its gross business income exceeds $109,000, whatever its legal form. It also pays the 0.55% Business Enterprise Tax on wages, interest and dividends paid if its receipts or tax base exceed about $298,000, though BET paid is credited against the BPT. Owners pay no state income tax on what they receive. Customers pay no sales tax, except on meals, hotel rooms and car rentals. Property taxes are high because local governments and schools depend on them. Formation and annual report fees are $100 each.
Business Profits Tax (BPT)
| Item | 2026 |
|---|---|
| Rate | 7.5% |
| Filing threshold | Gross business income above $109,000 |
| Who pays | Corporations, LLCs, partnerships, sole proprietorships and trusts carrying on business |
| Compensation deduction | Reasonable compensation for owners of unincorporated businesses |
- Apportionment: Single sales factor from 2023 tax years for most businesses.
- Combined reporting: Required for unitary groups, on a water's-edge basis.
- Credits: BET paid is credited against BPT, and research and development credits are available.
- Returns: Form NH-1120, NH-1065 or NH-1040 is due on the 15th day of the fourth month after year-end (third month for partnerships and S corporations).
Business Enterprise Tax (BET)
| Item | 2026 |
|---|---|
| Rate | 0.55% |
| Tax base | Compensation paid + interest paid + dividends paid |
| Filing threshold | Gross receipts or enterprise value tax base above about $298,000 (indexed) |
| Credit | BET paid is credited against BPT, with a ten-year carryforward |
Because BET is credited against BPT, a profitable business effectively pays the higher of the two taxes. Businesses with large payrolls and low profits, such as service companies, often pay BET without any BPT.
Personal income tax
New Hampshire taxes no wages, salaries or business income at the individual level. The Interest and Dividends Tax was phased down from 5% and repealed for tax years beginning in 2025. Owners of pass-through businesses therefore pay no state tax personally; the business pays BPT and BET instead.
Sales and Meals and Rooms Tax
| Tax | Rate |
|---|---|
| General sales tax | None |
| Meals and Rooms Tax (restaurant meals, lodging, car rentals) | 8.5% |
| Local sales taxes | None |
New Hampshire retailers don't collect sales tax, which attracts shoppers from Massachusetts, Maine and Vermont. New Hampshire sellers shipping goods into other states may have to collect those states' taxes.
Payroll and property taxes
- Unemployment insurance: Employers pay on the first $14,000 of each employee's wages. New employers start at 1.7%.
- Property tax: High statewide, with a statewide education property tax plus local taxes. Business personal property such as equipment is generally not taxed.
- Communications services tax: 7% on telephone and similar services.
- Paid leave: New Hampshire has a voluntary paid family and medical leave insurance program.
Forming a business in New Hampshire: fees and ongoing costs
| Item | LLC | Corporation |
|---|---|---|
| Formation filing fee | $100 | $100 |
| Annual report | $100 (due April 1) | $100 (due April 1) |
| BPT and BET | If thresholds are met | If thresholds are met |
| Registered agent | Required | Required |
Worked example: $500,000 of profit
| Step | Amount |
|---|---|
| Taxable income | $500,000 |
| New Hampshire Business Profits Tax at 7.5% | $37,500 |
| Federal tax at 21% on $462,500 | $97,125 |
| Total income tax | $134,625 (26.9%) |
The BET on payroll, interest and dividends is credited against the BPT, so it usually adds little for a profitable business. For a single LLC owner with $150,000 or $75,000 of profit, personal income tax is $0. The LLC itself may owe BPT on profit above a reasonable compensation deduction for the owner.
How New Hampshire compares with its neighbors
| State | Corporate rate | Top personal rate | Sales tax |
|---|---|---|---|
| New Hampshire | 7.5% BPT plus 0.55% BET | None | None |
| Massachusetts | 8% plus property measure | 9% (5% below $1.08M) | 6.25% |
| Maine | 3.5% to 8.93% | 7.15% | 5.5% |
| Vermont | 6% to 8.5% | 8.75% | 6% |
New Hampshire's corporate tax is similar to its neighbors', but the absence of personal income tax and sales tax makes it far cheaper for owners and consumers. That combination draws residents and businesses from the Boston area, particularly to southern New Hampshire.
Choosing an entity in New Hampshire
Entity choice matters less in New Hampshire than elsewhere, because LLCs, partnerships and sole proprietorships all pay BPT just like corporations. The main differences are:
- Sole proprietorships and LLCs can deduct reasonable compensation for owners, which reduces BPT.
- S corporations pay BPT at the entity level; shareholders deduct wages paid to them as compensation.
- C corporations pay BPT plus 21% federally, and dividends are not taxed by New Hampshire after 2024.
Who pays the most in New Hampshire
Profitable businesses and property owners carry most of New Hampshire's tax burden. A business with high profit and few employees pays the full 7.5% BPT. Service businesses with large payrolls pay BET. Property taxes are among the highest in the country, which affects businesses that own or lease commercial real estate. Individual owners and employees, by contrast, pay no state income tax.
Tax planning tips for New Hampshire businesses
Document reasonable compensation. If you run an LLC or sole proprietorship, the compensation deduction can significantly reduce BPT. Keep evidence of what similar work would cost, such as salary surveys.
Track the BET credit. BET paid in years with low profits can be carried forward for ten years against future BPT. Don't let the credit expire.
Check other states' nexus rules. New Hampshire businesses selling into Massachusetts or other states may owe sales or income tax there even though New Hampshire has neither.
Doing business across New Hampshire
Most New Hampshire businesses are in the southern tier of the state, in Manchester, Nashua, Portsmouth and the towns along the Massachusetts border. Many employees in these areas commute into Massachusetts, and many Massachusetts residents work in New Hampshire. Massachusetts taxes nonresidents on wages earned while working in Massachusetts, while New Hampshire residents working remotely for Massachusetts employers have been the subject of disputes between the two states. Employers with staff in both states should track where work is performed.
Recent changes for 2025 and 2026
- Interest and Dividends Tax repealed for tax years beginning in 2025.
- BPT rate held at 7.5% after cuts from 7.7%.
- BET rate at 0.55%, with indexed filing thresholds.
- BPT filing threshold increased to $109,000.
Is New Hampshire a good state for business?
Advantages
- No sales tax and no tax on wages
- Interest and Dividends Tax repealed
- Proximity to Boston and its talent pool
- No personal property tax on most business equipment
Drawbacks
- BPT and BET apply to LLCs and sole proprietors
- Very high property taxes
- $100 annual report fee
- Small market and limited infrastructure in the north
Compliance checklist
- File a Certificate of Formation or Articles of Incorporation with the Secretary of State.
- Register with the Department of Revenue Administration for BPT, BET and Meals and Rooms Tax if applicable.
- Register with New Hampshire Employment Security if you hire.
- File the annual report by April 1.
- Make quarterly estimated BPT and BET payments if your liability exceeds $260.
- File BPT and BET returns each year.
Compare New Hampshire with its neighbors below or estimate your taxes in the United States calculator. See LLC taxes for more.