New Hampshire's first real tax bill lands on your payroll
New Hampshire has no sales tax and no income tax on wages, and both are exactly as good as they sound: your list price is what the customer pays, and your salary is not taxed by the state. The catch arrives later and from an unexpected direction. The Business Enterprise Tax is calculated from your payroll rather than your profit — so once you are big enough to owe it, you owe it in the years you lose money too, on wages that have already left the building.
Start with the part that lives up to the reputation, because it genuinely does. There is no sales tax here at any level — no state rate, no town rate, no registration, no exemption certificates to chase out of customers, no rate lookup, no return. You sell at your price and your price is what gets paid.
For a shop on the Massachusetts or Maine border that is a permanent commercial advantage rather than an administrative one, and for an online business it removes an entire category of work: no tax line on the invoice, no per-address rate table, no monthly filing eating an afternoon.
- Sales tax
- None — nothing to register, collect or file
- Local income tax
- None
- State business licence
- Not required statewide
- Workers' comp from
- 1 employee
- Formation approved in
- Filed through the Secretary of State's QuickStart portal; the published turnaround was not confirmed in this pass
- First 90 days, all in
- $150–$900 · $102 of it to the state
Official portals: New Hampshire Secretary of State — QuickStart · Granite Tax Connect — NH Department of Revenue Administration · NH DRA — Meals & Rooms (Rentals) Tax licence. Figures checked September 2026; the portal always wins.
One exception, and it is probably not you
The Meals and Rooms (Rentals) Tax is the single consumption tax in the state: 8.5%, collected by restaurants, hotels, short-term lodging operators and car-rental businesses, and remitted by the 15th of each month.
If you are in one of those trades, you need a Meals and Rentals licence from the Department of Revenue Administration before you open, applied for through Granite Tax Connect. It is the closest thing New Hampshire has to a compulsory business licence and it is compulsory only for you — everybody else in the state sells with nothing added and nothing to file. Knowing which of those two paragraphs you are in is a thirty-second question worth answering before you build a till.
The tax that looks at what left, not what stayed
Almost every state taxes a business on what is left over at the end. New Hampshire runs a second tax that works the other way round. The Business Enterprise Tax is 0.55% of the enterprise value tax base — all compensation paid, plus interest paid, plus dividends — which is to say it lands on money going out of the business rather than money staying in it.
For a firm whose main cost is people, that is a tax on the thing you spend most on, and it does not care what kind of year you had. It is also why “New Hampshire has no income tax” is a half-truth for anyone with staff: there is no tax on your income, and there is a tax calculated from the wages you pay other people.
The saving grace is the threshold, and it is a generous one. Below roughly $298,000 of gross receipts or enterprise value the BET does not apply at all, which puts a new small company nowhere near it. The reason to know about it now is so that the year you cross the line is not the year you find out.
What the two business taxes actually cost
There are two of them. The Business Profits Tax is 7.5% on profit, with a return starting above about $109,000 of gross business income. The Business Enterprise Tax is 0.55% on the enterprise value tax base, starting above about $298,000 of gross receipts or enterprise value. Both thresholds get adjusted from time to time, so take the current figures from Granite Tax Connect and treat the numbers below as the shape rather than the arithmetic.
| The business | Business Enterprise Tax | Business Profits Tax |
|---|---|---|
| Consultant, $90,000 of receipts, no staff | Below the threshold — nothing | Below the threshold — nothing |
| Agency, $400,000 of receipts, $250,000 of wages, profitable | 0.55% of the wage base — about $1,375 | 7.5% of the profit |
| Same agency, same wages, a loss-making year | 0.55% of the wage base — about $1,375 | Nothing — there is no profit |
The BET figures above take compensation as the whole of the enterprise value tax base, which is the usual shape for a service firm with no significant interest or dividends paid. They illustrate the mechanism rather than a return.
The third row is the one to sit with. A bad year does nothing to the BET, because the BET never looked at the profit in the first place. So if you are planning a year of hiring ahead of revenue — the exact circumstance in which a business loses money on purpose — 0.55% of that payroll is a fixed cost of employing people, like the employer's federal payroll share, and it belongs in the plan next to the wages rather than in a tax line at the bottom.
Three questions to put to somebody by phone
One genuine advantage first. New Hampshire is the only state in this region with no compulsory paid-leave payroll deduction. The Granite State Paid Family Leave Plan exists but is voluntary — an insurance product an employer may buy into, not a percentage taken off every payslip. Cross into Massachusetts, Rhode Island, Connecticut, Vermont or Maine and there is something to withhold from the first employee. Here there is not.
Three other things could not be pinned down against a primary source at this check, and each of them is a phone call rather than a research project:
- Ask NHES for your liability date
- Unemployment insurance is registered with New Hampshire Employment Security and reported quarterly, but the exact wage-and-week test that makes an employer liable was not confirmed here. Ask for the date rather than assuming it runs from the first paycheque.
- Ask the Department of Labor who may opt out
- The Insurance Department describes workers' compensation as required for almost all businesses in the state, with limited exceptions and no small-employer headcount to hide behind. The Department of Labor's own page would not load when we checked, so the statutory exemption list — which owners and officers are excluded, and on what terms — is unconfirmed. Do not infer it from another state.
- Ask the town assessor what they assess
- New Hampshire towns raise almost everything from property, which is why the bills are high, and a business can be assessed locally on its equipment. Rates are set town by town and were not confirmed here. Worth asking before you sign a lease rather than after the first bill.
What the state itself charges the entity is small and entirely predictable: $102 to file the certificate of formation online, $100 for the annual report due April 1, and $502 over five years all in. No franchise tax, no general state business licence, nothing recurring beyond that one date. Formation costs for every state are on the LLC hub.
Common questions
Is there really nothing to collect at the till in New Hampshire?
For most businesses, nothing at all — no sales tax at state or town level, nothing to register for, no rate to look up, no exemption certificates and no return. The one exception is the Meals and Rooms (Rentals) Tax at 8.5%, which restaurants, hotels, short-term lodging operators and car-rental businesses collect and remit by the 15th of each month.
Why would a loss-making business owe the Business Enterprise Tax?
Because the BET is calculated from the enterprise value tax base — all compensation paid, plus interest paid, plus dividends — rather than from profit. At 0.55% of money leaving the business, it is unaffected by whether any stayed. It only applies once gross receipts or enterprise value pass roughly $298,000, which most newly formed companies are well under.
Is there really no income tax in New Hampshire?
There is no tax on wages, so your salary and the profit passing through your LLC to your personal return are not taxed by the state. Businesses are taxed instead: the 7.5% Business Profits Tax above about $109,000 of gross business income, and the 0.55% Business Enterprise Tax above about $298,000.
Do I need a licence to open a restaurant or a short-term rental here?
Yes — a Meals and Rentals licence from the Department of Revenue Administration, applied for through Granite Tax Connect, and it must be in place before you serve taxable meals or offer sleeping accommodation. It is the one compulsory licence in a state that otherwise has no general business licence.
Is there a paid family leave payroll deduction in New Hampshire?
No. The Granite State Paid Family Leave Plan is voluntary — an insurance option an employer may choose — rather than a compulsory contribution taken from wages. That makes New Hampshire unusual in this region, where every neighbouring state withholds something from the first employee.
Which New Hampshire rules should I confirm by phone before hiring?
Three. The wage-and-week test that creates unemployment liability, which NHES can date for you. The workers' compensation exemption list, which the Insurance Department describes as narrow with no headcount minimum but which the Department of Labor's own material could not be checked against here. And whether your town assesses business equipment, and at what rate, which only the town assessor can tell you.
No tax line on the invoice. One to diary on the payroll.
Tell Velofound what you're building and it sets up the website, takes card payments into your own Stripe account, and keeps New Hampshire's short list — the 1 April report, the BET threshold to watch as you hire — where you'll see it. Free to start.
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