New Hampshire Tax Calculator 2026

New Hampshire Tax Overview

New Hampshire Has No Income Tax

New Hampshire does not impose a state income tax on earned income, including wages, salaries, business income, capital gains, or retirement income. The state previously levied a 5% tax on interest and dividend income (the Interest and Dividends Tax), but this tax was systematically phased out over several years and was fully eliminated as of January 1, 2025. As a result, New Hampshire now has absolutely zero state income tax on all forms of individual income.

This makes New Hampshire uniquely attractive in the New England region, where neighboring states like Massachusetts (5% flat tax), Vermont (up to 8.75%), and Maine (up to 7.15%) all impose significant income taxes. The elimination of the Interest and Dividends Tax removed the last vestige of personal income taxation and puts New Hampshire on par with states like Florida, Texas, and Nevada as a true zero-income-tax state.

New Hampshire does impose business-level taxes. The Business Profits Tax (BPT) is levied at 7.5% on business income, and the Business Enterprise Tax (BET) is 0.55% on the enterprise value tax base (compensation, interest, and dividends paid). However, these are business taxes, not personal income taxes. BET paid can be credited against BPT liability.

New Hampshire Has No Sales Tax

New Hampshire is one of only five states that does not levy a state sales tax, joining Alaska, Delaware, Montana, and Oregon. Unlike some of those states, New Hampshire also has no local sales taxes at the city or county level. This means every retail purchase in New Hampshire is completely free of sales tax, making the state a major shopping destination for residents of neighboring Massachusetts (6.25% sales tax) and Maine (5.5% sales tax).

New Hampshire does impose a Meals and Rooms Tax at a rate of 8.5%, which applies to restaurant meals, hotel rooms, and car rentals. This is not technically a sales tax but functions similarly for tourists and diners. The Meals and Rooms Tax is a significant revenue source for the state and is primarily borne by tourists and visitors.

The absence of both income tax and sales tax makes New Hampshire one of only two states in the nation (the other being Alaska, which allows local sales taxes) where residents pay neither form of tax. This unique combination, symbolized by the state motto "Live Free or Die," has been a cornerstone of New Hampshire's identity and economic appeal for decades.

New Hampshire Property Tax

The trade-off for having no income tax and no sales tax is that New Hampshire has one of the highest property tax rates in the nation. The effective property tax rate is approximately 1.57%, ranking third-highest nationally behind New Jersey and Illinois. Property taxes are the primary funding mechanism for local government in New Hampshire, particularly for K-12 education, which consumes the largest share of property tax revenue.

Property tax rates in New Hampshire vary dramatically by municipality. Some towns in the Lakes Region and North Country have effective rates exceeding 2.5%, while wealthier communities along the seacoast may have rates closer to 1%. The state provides some property tax relief through the Low and Moderate Income Homeowners Property Tax Relief program, which provides a rebate to qualifying homeowners with incomes below certain thresholds.

New Hampshire's Statewide Education Property Tax (SWEPT) is a uniform rate applied statewide to fund the state's share of education costs. This rate is set by the Legislature and has been approximately $1.58 per $1,000 of assessed value. The local school tax, municipal tax, county tax, and state education tax all combine to form the total property tax rate for each municipality.

New Hampshire's Live Free or Die Tax Model

New Hampshire's tax structure is perhaps the most philosophically distinctive in the nation. The "Live Free or Die" motto extends to fiscal policy: the state has consistently rejected proposals for either a broad-based income tax or a sales tax, relying instead on property taxes, business taxes, and targeted excise taxes to fund government operations. This model results in a very different distribution of tax burden compared to most states.

Renters and lower-income residents benefit significantly from the absence of income and sales taxes, as they avoid these consumption and earnings-based taxes. However, homeowners, particularly those with modest incomes but valuable homes, can face a disproportionately high tax burden through property taxes. Retirees who own their homes outright may find the property tax burden significant even though their retirement income is entirely untaxed.

The state also relies on the Real Estate Transfer Tax at 1.5% (split equally between buyer and seller at 0.75% each), tobacco taxes ($1.78 per pack), and various fees and licenses. New Hampshire notably has state-run liquor stores, where the state profits from the markup on alcohol sales, contributing meaningful revenue to the general fund.

New Hampshire vs. Neighboring States

New Hampshire's unique tax profile creates stark contrasts with its New England neighbors:

• Massachusetts — 5% flat income tax (9% on short-term capital gains), 6.25% sales tax, 1.04% property tax. Moving from MA to NH eliminates both income and sales tax, potentially saving tens of thousands annually for high earners.
• Vermont — 3.35%-8.75% graduated income tax, 6% sales tax, 1.73% property tax. Vermont has high taxes across all three categories, making NH more attractive despite comparable property taxes.
• Maine — 5.8%-7.15% graduated income tax, 5.5% sales tax, 1.09% property tax. Maine taxes income and sales but has lower property taxes than New Hampshire.
• Connecticut — 3%-6.99% graduated income tax, 6.35% sales tax, 1.63% property tax. Connecticut has high taxes across all categories, making NH a popular relocation destination.

Use our state comparison calculator to compare New Hampshire to your current state.