Overview of New Hampshire Taxes
New Hampshire has no income tax on wages and salaries. However, there is a 5% tax on interest and dividends. The state also has no sales tax. Homeowners in New Hampshire pay the fourth-highest average effective property tax rate in the country.
Number of State Personal Exemptions
Your Income Taxes Breakdown
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* These are the taxes owed for the 2020 - 2021 filing season.
Your 2020 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2020 Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
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Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2019 - 2020 filing season based on the Trump Tax Plan.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2020...read more
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
Taxes in New Hampshire
New Hampshire State Tax Quick Facts
- Income tax: None (5% Interest and Dividends Tax)
- Sales tax: None
- Property tax: 2.05% average effective rate
- Gas tax: 22.20 cents per gallon of regular gasoline and diesel
The Granite State has a reputation for being one of the lowest taxed states in the U.S., and rightly so. The state has no sales tax and no income tax on wages and salaries. While it does tax interest and dividends at a rate of 5%, even that is much lower than the regular income taxes in many other states.
The one tax that is significantly higher in New Hampshire than in the rest of the country is the property tax. Homeowners pay an average effective property tax rate of 2.05%, the fourth-highest rate in the U.S. Other taxes in New Hampshire include a cigarette tax, a gas tax and an excise tax on beer. In fact, excise taxes are one of the largest sources of revenue for the New Hampshire state government.
A financial advisor in New Hampshire can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial planning - including retirement, homeownership, insurance and more - to make sure you are preparing for the future.
New Hampshire Income Taxes
There is no tax on personal income from wages and salaries in New Hampshire. Income listed on a W-2 is not taxed at the state level, which means that the vast majority of income earned in New Hampshire is not subject to any state taxes.
New Hampshire does tax income from interest and dividends, however. The Interest and Dividends Tax is a flat rate of 5%. The exemption for that tax is $2,400 for single filers and $4,800 for married persons filing jointly, so taxpayers with income from interest and dividends lower than that amount do not have to pay any taxes. Additional exemptions of $1,200 are available to residents who are either 65 years or older, blind or disabled and unable to work.
Taxpayers with income from interest and dividends above their total exemption will pay taxes only on the amount that exceeds the exemption. Say, for example, a single filer earns $6,000 in interest annually. They would pay $180 in taxes, because the 5% tax only applies to the $3,600 above their exemption.
New Hampshire Sales Tax
The state of New Hampshire has no sales tax. Additionally, there are no local sales taxes in New Hampshire cities or counties. That means that nearly any product can be purchased tax-free, although there are exceptions. New Hampshire levies special taxes on electricity use ($0.00055 per kilowatt hour), communications services (7%), hotel rooms (9%) and restaurant meals (9%).
New Hampshire Property Tax
While New Hampshire lacks a sales tax and personal income tax, it does have some of the highest property taxes in the country. On average, homeowners in New Hampshire pay 2.05% of their home’s value in property tax every year. That’s the fourth-highest average effective property tax rate in the country. It serves as the primary source of revenue to support local services like schools and parks, as well as the state school system.
If you’d like to purchase a home in the Granite State or if you’re looking to refinance your current home, take a look at our New Hampshire mortgage guide for all the essentials regarding mortgages in New Hampshire.
New Hampshire Gas Tax
The gas tax in New Hampshire is equal to 22.20 cents per gallon. That tax applies to both regular and diesel fuel. These rates are each the 15th-lowest in the U.S.
New Hampshire Cigarette Tax
New Hampshire’s excise tax on cigarettes totals $1.78 per pack of 20. This is the 24th-highest cigarette tax in the U.S. This tax is not paid directly by the consumer. Instead, the wholesaler must purchase stamps that identify if tax has been paid on a package of cigarettes.
New Hampshire Alcohol Tax
Liquor and wine are not taxed in New Hampshire, but beer is. The tax on beer is 30 cents per gallon, or about 2.81 cents per beer. That is the 21st-highest beer tax in the country.
It should also be noted that liquor in New Hampshire can only be purchased at a state-run store. There are no private liquor stores. Since the state therefore has a monopoly on the sale of liquor, it collects all profits from liquor sales to consumers.
New Hampshire Estate Tax
While New Hampshire used to have an estate tax (called the “Legacy & Succession Tax”), it was repealed in 2002. The repeal became effective on Jan. 1, 2003. As a result, there is no longer an estate tax in New Hampshire. It's important to note, however that the tax may still apply to estates for decedents who died prior to Jan. 1, 2003.
- The largest cities in New Hampshire are Manchester, Nashua and Concord.
- Each June, hundreds of thousands of motorcyclists and motorcycle enthusiasts gather in Laconia, New Hampshire for Laconia Motorcycle Week. This is one of the largest motorcycle rallies in the U.S.
- The highest point in New Hampshire is 6,288 feet at the summit of Mount Washington in the White Mountains. You can drive your car up there!
Places with the Lowest Tax Burden
Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
To find the places with the lowest tax burdens, SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country.
To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden, we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income after taxes. This balance is then multiplied by 35% to estimate the sales tax paid.For property taxes, we compared the median property taxes paid in each county.
For fuel taxes, we first distributed statewide vehicle miles traveled to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.
We then added the dollar amount for income, sales, property and fuel taxes to calculate a total tax burden. Finally, each county was ranked and indexed, on a scale of 0 to100. The county with the lowest tax burden received a score of 100 and the remaining counties in the study were scored based on how closely their tax burden compares.