Taxes on LLC in NH: Essential Guide for Single-Member LLCs in New Hampshire

What to Expect When You’re the Boss

If you’re running a business as a single-member LLC in New Hampshire, congrats—you’re wearing the crown and the accountant hat (for now). The good news? New Hampshire is a bit different when it comes to taxes. The bad news? It’s still the government, so there are still forms, rules, and gotchas.

Here’s what you need to know about how your LLC is taxed in New Hampshire—especially if you’re filing as a sole proprietorship, which is the default for single-member LLCs.

🚫 First, Let’s Clear This Up: No Sales Tax in NH

You read that right. There’s no general sales tax in New Hampshire. If you're selling physical products, you don’t need to collect or remit sales tax like your friends in Massachusetts or Vermont. This can be a competitive advantage, especially for retail and e-commerce businesses.

Caveat: Certain specific services (like rooms and meals, car rentals, etc.) are taxed under separate NH laws, so if you’re in hospitality or rentals, let’s talk.

🧾 How Your LLC Is Taxed Federally: Like You

Because you’re a single-member LLC, the IRS treats your business as a disregarded entity. That means:

• You report all your income and expenses on Schedule C of your personal tax return (Form 1040).

• You pay self-employment tax on your net profits—this covers Social Security and Medicare.

• There’s no separate “corporate” return unless you elect to be taxed as an S corp (a topic for another post).

🧍‍♂️ Personal Compensation Deduction (NH-specific)

New Hampshire has its own unique rules when it comes to business taxes. One of the most misunderstood is the Personal Compensation Deduction.

Here’s how it works:

• NH doesn’t tax income the same way the IRS does. Instead, it has two key business taxes (more on those below).

• One of them, the Business Profits Tax (BPT), allows you to deduct a portion of the net income you “paid yourself” as a sole proprietor.

• This is called the Personal Compensation Deduction, and it’s meant to avoid double-taxing small business owners on their labor.

🧠 Pro tip: You don’t need to physically “pay yourself” a salary like an S corp would. The state simply assumes a reasonable amount of your profits represent your own labor and lets you deduct it accordingly.

📊 Taxes on LLC in NH: BET and BPT

New Hampshire’s two main business taxes are:

1. Business Profits Tax (BPT)

• Who pays it? Any business with more than $103,000 in gross income.

• What is it? A 7.5% tax (2025 rate) on net business profits, after allowable deductions (like the personal compensation deduction).

• What’s considered profit? It starts with your federal taxable income, then gets adjusted for NH-specific rules.

2. Business Enterprise Tax (BET)

• Who pays it? Any business with gross receipts over $281,000 or enterprise value over $111,000.

• What is it? A 0.55% tax (2025 rate) on enterprise value, which includes:

  • Wages paid

  • Interest paid

  • Distributions to owners

    
    

⚠️ Even if your business doesn’t turn a profit, you may still owe BET based on wages and other payments. For sole proprietors, this often includes your own compensation (as defined above).

🤝 Filing Logistics & Deadlines

• BPT and BET are filed on Form NH-1065 or NH-1120, depending on your setup.

• Returns are due April 15 for calendar-year filers, with extensions available.

• You may need to make quarterly estimated payments if your tax due will be more than $500 for the year.

🧮 Should You Stay a Sole Prop or Elect S Corp?

Once your business reliably earns $60K-$100K+ in profits, it might be time to discuss an S Corp election. That lets you pay yourself a “reasonable salary” and potentially save thousands in self-employment taxes.

But there’s a trade-off: payroll filings, compliance, and more admin. If you're unsure, book a strategy call—we help New Hampshire LLC owners like you weigh the options.

🎯 Bottom Line

Running a single-member LLC in New Hampshire comes with some unique tax quirks:

• No sales tax, but watch for BPT and BET thresholds

• Your profits flow through to your personal tax return

• NH gives you a break via the personal compensation deduction

• You may owe BET even if you’re not profitable

Taxes on LLC in NH:

Need help untangling it all? At Thrive-Tax, we specialize in simplifying taxes for New Hampshire solopreneurs and small business owners. We’ll help you stay compliant, minimize what you owe, and give you breathing room to actually run your business.

📅 Book a free consult

🧠 Want a BET/BPT estimate? We can run the numbers for you—just ask.