Business Taxes in New Hampshire: A Practical Guide for Owners, LLCs, and Employers (2026 Edition)
New Hampshire markets itself as simple for business. No general sales tax. No tax on wages. That reputation is deserved, but incomplete. New Hampshire replaces those missing taxes with a small number of business-focused taxes that are powerful, technical, and easy to misunderstand.
This guide is written for business owners, founders, and employers who want a clear explanation of what New Hampshire actually taxes, how those taxes are calculated, and where the traps are. No payroll software sales pitch. No academic wandering. Just how it works.
Why New Hampshire Business Taxes Are Different
New Hampshire is one of the few states with no general individual income tax on wages and no general sales tax. Instead, the state raises revenue primarily through taxes imposed directly on business activity and business scale.
The result is a system that often feels light when you are small, then suddenly heavy once revenue, payroll, or ownership structure crosses certain thresholds. Many businesses are surprised not because the taxes are high, but because they did not realize they applied at all.
Which New Hampshire Taxes Apply to Your Business
Most New Hampshire businesses encounter more than one of the following taxes.
Business Profits Tax (BPT)
The Business Profits Tax is an entity-level tax on net income. It applies to corporations, LLCs, partnerships, and sole proprietorships that carry on business activity in New Hampshire.
Federal taxable income is the starting point, but New Hampshire requires several state-specific adjustments. Even federally disregarded entities such as single-member LLCs are taxable entities for BPT purposes.
Business Enterprise Tax (BET)
The Business Enterprise Tax is not an income tax. It is a tax on the enterprise value base, generally wages, interest, and dividends paid or accrued by the business.
Many businesses owe BET even in years when they have little or no profit. BET paid can generally be credited against BPT in the same or future years, but the cash flow impact is real.
Interest and Dividends Tax and Owner Distributions
While New Hampshire does not tax wages, it historically taxed interest and dividends received by residents. Although this tax is being phased out, distributions from certain entities can still create unexpected exposure depending on timing and structure.
Meals, Rooms, and Rentals Tax
Businesses that provide prepared meals, lodging, or vehicle rentals must collect and remit this tax. Registration and electronic filing are required, and penalties for noncompliance are common.
Payroll and Unemployment Taxes
Employers must pay New Hampshire unemployment insurance tax and comply with federal payroll tax obligations. The absence of state wage withholding does not eliminate employer reporting responsibilities.
Local Property and Real Estate Related Taxes
Municipal property taxes apply to business-owned real estate and can vary significantly by town. Valuation methodology matters and is often negotiable.
Other Industry Specific and Excise Taxes
New Hampshire also imposes specialized taxes such as the tobacco tax, communications services tax, electricity consumption tax, and others that apply only to certain industries or activities.
New Hampshire Business Taxes by Entity Type
Sole Proprietors
Sole proprietors are subject to both BPT and BET once filing thresholds are met, even though the business is not a separate federal tax entity.
Single Member and Multi Member LLCs
LLCs are taxable entities for New Hampshire purposes regardless of federal classification. Disregarded status does not exempt an LLC from filing or paying BPT or BET.
Partnerships
Partnerships are subject to BPT and BET at the entity level. New Hampshire allows a deduction for reasonable compensation paid to owners who are natural persons, which can materially affect taxable income.
S Corporations
S corporations pay BPT and BET at the entity level, while distributions and compensation planning affect owner-level exposure.
C Corporations
C corporations are fully subject to BPT and BET and must carefully manage apportionment and combined reporting obligations.
Nonprofits and Special Entities
Certain nonprofit organizations and special entities may still be subject to BET or other New Hampshire taxes depending on their activities.
How New Hampshire Calculates Business Taxes
What Counts as Gross Business Income
Filing obligations often depend on gross business income or gross receipts from all sources, not just New Hampshire-sourced activity.
Apportionment and Multistate Businesses
Businesses operating in multiple states must apportion income using New Hampshire’s formula, which considers sales, compensation, and property, with sales weighted more heavily.
Reasonable Compensation Adjustments
New Hampshire allows proprietors and partners to deduct reasonable compensation for services rendered, even though such compensation is not deductible at the federal level. This adjustment is one of the most misunderstood features of the system.
Combined and Unitary Reporting Rules
Unitary business groups are subject to mandatory combined reporting. Ownership structure and intercompany activity matter.
Filing Requirements and Key Deadlines
Annual Returns and Due Dates
BPT and BET returns are generally due in the spring following the close of the tax year, with different deadlines depending on entity type.
Estimated Payments and Safe Harbors
Quarterly estimated payments are required once liability exceeds relatively low thresholds. Missing these payments creates penalties even if the final tax is paid on time.
What Triggers Mandatory Filing
Many businesses must file returns even when no tax is ultimately owed. Failure to file is one of the most common compliance errors.
Common Filing Mistakes That Create Notices
Late filings, missing combined reporting schedules, and incorrect apportionment are frequent triggers for Department of Revenue Administration notices.
Credits, Deductions, and Planning Opportunities
BET Credit Against BPT
BET paid can generally be credited against BPT, sometimes across multiple years. Proper tracking is essential.
Owner Compensation Strategies
How owners are paid, and how that compensation is characterized, can materially affect both BPT and BET exposure.
Entity Structure Planning Considerations
Entity choice affects tax base, compliance complexity, and audit risk. New Hampshire-specific consequences should be evaluated alongside federal planning.
When Conversions and Transfers Create Tax
Entity conversions, reorganizations, and real estate transfers can unexpectedly trigger transfer taxes or reassessment.
Payroll, Employees, and Employer Obligations
Unemployment Insurance Tax
Employers must register and pay unemployment insurance tax based on payroll and experience rating.
Withholding and Reporting Obligations
Although New Hampshire does not withhold tax on wages, employers still have federal withholding, reporting, and classification responsibilities.
Independent Contractors vs Employees
Misclassification creates exposure not only federally but also for state unemployment tax purposes.
Real Estate, Transfers, and Local Tax Traps
Real Estate Transfer Tax
New Hampshire imposes a transfer tax on most real estate transactions, generally split between buyer and seller.
Entity Transfers and REHC Rules
Transfers of interests in real estate holding companies can be taxable even when no deed is recorded.
Municipal Property Taxes and Abatements
Property tax assessments vary widely. Businesses can and should challenge incorrect valuations.
What New Hampshire Does Not Tax (and Why That Matters)
New Hampshire does not impose a general sales tax or wage income tax. This makes the state attractive for certain business models but increases reliance on business-level taxes that scale with size rather than consumption.
When to Involve a CPA or Tax Advisor
Audit Risk Indicators
Rapid growth, multi-state activity, complex ownership, and inconsistent filings increase audit risk.
Growth, Nexus, and Expansion Triggers
Hiring remote employees, acquiring property, or expanding services across state lines can change tax exposure.
Fixing Problems Before the State Finds Them
Voluntary disclosure and corrective filings are often far less expensive than waiting for enforcement.
Frequently Asked Questions About New Hampshire Business Taxes
New Hampshire’s tax system rewards planning and punishes assumptions. Understanding which taxes apply, how they are calculated, and when filing is required is essential for long-term stability.
Work With a New Hampshire CPA Who Actually Does This
If you are running a business in New Hampshire and want clarity, defensible filings, and fewer surprises from the Department of Revenue Administration, this is where professional guidance pays for itself.
I work directly with business owners, LLCs, and employers on:
Entity structure and restructuring decisions
Business Profits Tax and Business Enterprise Tax planning
Multi state and apportionment issues
Owner compensation and distribution strategy
Fixing prior year filings and resolving notices
If you are unsure whether you are filing correctly, paying more than you should, or carrying unnecessary audit risk, a short conversation can usually surface that quickly.
Schedule a consultation to review your New Hampshire business tax situation and get a clear plan forward.