New Hampshire has no state income tax and no state sales tax - making it one of the most distinctive tax environments in the United States. As of tax year 2025 (continuing into 2026), the Interest and Dividends (I&D) Tax was fully repealed per NH TIR 2025-001, eliminating the last remnant of New Hampshire's income taxation. The trade-off is among the highest property tax rates in the nation. Capital gains are also not taxed at the state level.
State Income Tax
None (I&D Tax repealed 2025)
State Sales Tax
None (0%)
Capital Gains
No state tax
New Hampshire Has No State Income Tax
New Hampshire has not taxed wages or salaries for decades. The state's former Interest and Dividends (I&D) Tax - which taxed interest and dividend income at 3% - was phased down and then fully repealed effective January 1, 2025, per NH Technical Information Release TIR 2025-001. Starting with tax year 2025, New Hampshire residents pay $0 in state income tax on all income: wages, salaries, tips, overtime, capital gains, interest, dividends, and retirement income. New Hampshire's "Live Free or Die" motto reflects a long tradition of resisting broad-based taxation.
New Hampshire Capital Gains Tax
New Hampshire does not tax capital gains at the state level. With the repeal of the I&D Tax effective January 1, 2025, interest and dividends are also no longer taxed. Neither short-term nor long-term capital gains are subject to any New Hampshire state tax. Only federal capital gains tax applies to New Hampshire residents.
OBBBA Tips and Overtime in New Hampshire
The One Big Beautiful Bill Act (OBBBA) introduced federal deductions for qualified tip income, overtime pay, and senior income starting in tax year 2025. Since New Hampshire has no state income tax, these deductions reduce only your federal tax liability. New Hampshire workers with qualifying tips or overtime already pay $0 in New Hampshire state income tax - there is no state tax to reduce further.
No - as of tax year 2025 and continuing in 2026, New Hampshire has no income tax on wages or any other income. New Hampshire's Interest and Dividends (I&D) Tax - which had taxed interest and dividend income at 3% - was fully repealed effective January 1, 2025 per NH Technical Information Release TIR 2025-001. Wages, salaries, capital gains, and all other income were already exempt before the repeal. Starting TY2025, New Hampshire residents pay $0 in state income tax on all income types.
Does New Hampshire have a sales tax?
No. New Hampshire has no state sales tax and no local sales tax. This is one of New Hampshire's most prominent tax features - and a major economic differentiator from neighboring states like Massachusetts and Maine, which have sales taxes. New Hampshire residents frequently cross-shop from neighboring states to take advantage of the absence of sales tax on major purchases. The state compensates with high property taxes and various selective taxes (meals & rooms, tobacco, etc.).
Why are New Hampshire property taxes so high?
New Hampshire's property taxes are among the highest in the nation because the state relies on property taxes as a primary revenue source, given the absence of both income and sales taxes. Rates vary significantly by municipality - contact your local assessing office for current figures.
Does New Hampshire tax capital gains?
No. New Hampshire does not tax capital gains. The former Interest and Dividends Tax (which had taxed interest and dividend income) was fully repealed effective January 1, 2025 per NH TIR 2025-001. Neither short-term nor long-term capital gains are subject to any New Hampshire state tax. Only federal capital gains tax applies.
Does the OBBBA tips and overtime deduction apply in New Hampshire?
The One Big Beautiful Bill Act (OBBBA) introduced federal deductions for qualified tip income, overtime pay, and senior income starting in tax year 2025. Since New Hampshire has no state income tax, these deductions affect only your federal tax liability. New Hampshire workers with qualifying tip or overtime income benefit from the federal OBBBA deduction but already owe $0 in New Hampshire state income tax regardless.
Does New Hampshire tax retirement income?
No. New Hampshire has no state income tax. All retirement income - Social Security benefits, pensions, 401(k) distributions, 403(b) distributions, and IRA withdrawals - is entirely free from New Hampshire state taxation. This applies to all retirement income types since TY2025.
What taxes does New Hampshire actually collect?
New Hampshire collects revenue through several selective taxes, even though it has no broad-based income or sales tax: (1) Property tax - the primary local revenue source, including a statewide education property tax; (2) Rooms and meals tax - a 9% tax on restaurant meals, hotel stays, and car rentals; (3) Business taxes - the Business Profits Tax (BPT) and Business Enterprise Tax (BET) on business income and enterprise value; (4) Tobacco and alcohol taxes; (5) Real estate transfer tax - on property transactions. These selective taxes collectively replace the broad-based taxes other states rely on.
We use cookies for analytics (Google Analytics 4) and advertising (Google AdSense). Your calculator inputs never leave your browser.Learn more
