Does NH have sales tax? No! New Hampshire is one of only five states with no statewide sales tax, making it a rare shopping haven in the Northeast. For e-commerce sellers operating across state lines, this sounds like paradise; but here’s the catch: New Hampshire’s tax-free label comes with asterisks that matter.
While customers enjoy tax-free shopping on most goods, businesses face different obligations. The state funds itself through business taxes, property taxes, and industry-specific levies that catch many companies off guard. What looks like a compliance holiday on the surface reveals itself as a different kind of tax structure entirely.
That’s where Hands Off Sales Tax (HOST) provides clarity. Whether you’re expanding into New Hampshire, managing nexus across multiple states, or navigating post-Wayfair compliance, we help you understand exactly where obligations exist, even in “tax-free” states.
What “Tax-Free” Actually Means
New Hampshire has rejected sales tax proposals repeatedly throughout its history. The “Live Free or Die” state views sales tax as contrary to its identity. This cultural resistance runs deep, making future adoption extremely unlikely.
Keep in mind, “no sales tax” doesn’t mean “no taxes.” New Hampshire simply shifted the burden. Instead of spreading costs across transactions, the state concentrates them on property owners and businesses. For consumers, it’s a win. For businesses? That depends on your structure and footprint.
How New Hampshire Funds State Operations Without Sales Tax
Property Taxes: The Hidden Cost
New Hampshire’s property taxes rank among the top five nationally, with an effective rate of approximately 1.89% and a median annual payment of $6,372. Property owners bear substantial costs that sales tax would otherwise spread across broader consumption patterns.
For businesses, commercial property taxes can substantially exceed neighboring states with sales tax, affecting location decisions for warehouses and fulfillment centers.
Business Taxes: The Real Revenue Engine
New Hampshire imposes two business taxes that generate approximately 39% of state revenue—the highest percentage in the nation.
The Business Enterprise Tax (BET) charges 0.55% on a company’s “enterprise value tax base:” compensation, interest expenses, and dividends. This applies to businesses with more than $298,000 in gross receipts or enterprise value tax base. Unlike most business taxes, the BET taxes payroll and capital costs rather than profits. You can owe tax even without showing net income.
The Business Profits Tax hits 7.5% on net income for businesses exceeding $109,000 in gross receipts. For e-commerce sellers considering New Hampshire operations, physical presence triggers nexus for these business taxes, even while avoiding sales tax collection obligations.
The Exception: Meals and Rooms Tax
New Hampshire does impose an 8.5% tax on restaurant meals, hotel accommodations, short-term rentals, and motor vehicle rentals. Businesses in these sectors face compliance requirements comparable to sales tax: registration, monthly or quarterly filing, and potential audits.
The Border Town Advantage (That Mostly Disappeared)
Drive up I-93 from Boston, and you’ll see billboards advertising New Hampshire’s tax-free shopping. It’s not subtle marketing, it’s economic strategy.
A Massachusetts resident buying a $2,000 laptop in New Hampshire saves $125 in sales tax. Multiply that across furniture, appliances, and electronics, and the savings justify the drive. Shopping centers near the Massachusetts border built entire business models around this advantage. When you border states charging 5.5% to 6.25% sales tax, being tax-free becomes your competitive edge.
But there’s a legal asterisk: Massachusetts residents technically owe use tax on those purchases. While rarely enforced for consumer goods, businesses making large equipment purchases face scrutiny. The honor system has limits.
How Wayfair Changed the Game
Before 2018, New Hampshire-based online retailers had a 5-10% price advantage over local competitors. Without physical presence in other states, many didn’t collect sales tax. For small e-commerce businesses, this competitive edge was real money.
Then came South Dakota v. Wayfair. The Supreme Court ruling changed everything overnight. Now, remote sellers must collect sales tax based on customer location, not seller location. A New Hampshire e-commerce business selling to California customers must collect California’s sales tax once exceeding that state’s economic nexus threshold, which is typically $500,000 in annual sales.
The e-commerce advantage largely disappeared. What remained was operational simplicity for in-state sales and no personal income tax for owners and employees. Since Wayfair, HOST has helped businesses understand exactly where they’ve triggered economic nexus obligations across all 45+ sales tax states. Our nexus analysis service examines your sales data to determine precisely which states require registration.
What E-Commerce Businesses Need to Know
The Good News: If your only nexus is in New Hampshire and you’re selling to New Hampshire customers, you have zero sales tax obligations. Administrative simplicity at its finest.
The Reality Check: New Hampshire location doesn’t exempt you from collecting sales tax in other states where you have nexus. Economic nexus thresholds typically trigger around $100,000 in annual sales or 200 transactions. Crossing thresholds in multiple states creates compliance complexity: registrations, rate calculations for thousands of local tax districts, monthly or quarterly filings, and responses to state notices.
Business Tax Nexus: Physical presence! Warehouses, offices, employees, inventory it all triggers nexus for the BET and BPT. For businesses with $298,000+ in gross receipts or enterprise value tax base, BET registration becomes mandatory.
Marketplace Facilitators: If you sell through Amazon, eBay, or Etsy, the marketplace typically handles sales tax collection. But you remain responsible for monitoring your own website sales, understanding when marketplace facilitator laws apply, and potential business tax obligations in states where you have inventory.
Common Misconceptions About New Hampshire’s Tax System
“New Hampshire is a low-tax state overall”
Not quite. While sales tax doesn’t exist, New Hampshire’s total tax burden lands near the national middle. High property taxes and substantial business taxes offset the sales tax absence. The Tax Foundation ranks New Hampshire’s business tax climate 6th overall, but the state’s property taxes rank among the highest in the nation.
“Businesses pay no taxes in New Hampshire”
New Hampshire businesses face the BET, BPT, property taxes, and meals/rooms tax if applicable. Combined, these can exceed obligations in some states with sales tax, depending on business structure and operations.
“You can avoid all taxes by incorporating in New Hampshire”
Business taxes trigger based on where you conduct activities, not where you incorporate. A California-based business incorporated in New Hampshire still owes California taxes on California activities.
HOST: Your Partner for Multi-State Sales Tax Compliance
Understanding New Hampshire’s tax-free status is one piece of the puzzle. Managing sales tax obligations in 45+ states? That’s where complexity explodes.
What We Do:
Nexus Analysis: We analyze your sales data to determine precisely where you’ve met economic or physical nexus thresholds, including understanding which states require collection and which don’t.
Sales Tax Registration: We handle registration with every applicable state, managing paperwork and navigating each state’s quirks so you can focus on growth.
Sales Tax Filings: We prepare and file returns monthly, quarterly, or annually based on each state’s requirements, including local and special district returns.
Sales Tax Consultation: Schedule 15, 30, or 60-minute consultations to discuss complex scenarios like New Hampshire’s business taxes or receive strategic guidance on geographic expansion.
Audit Defense: We act as your battle-tested partner in resolving audits, organizing documentation and defending your position with state authorities.
Voluntary Disclosure Agreements: Discovered past obligations? We file VDAs to limit lookback periods and abate penalties.
Free Sales Tax Software Review: We review your TaxJar, Avalara, or other automation tool to identify costly mistakes like overtaxing exempt items or double-taxing due to system overlaps.
We’ve been 100% focused on sales tax since 1999. Founded by Mike Espenshade, with parent company TaxMatrix serving North America’s largest companies, we bring enterprise expertise to e-commerce sellers of all sizes.
Ready to Simplify Multi-State Compliance?
New Hampshire’s tax-free status offers genuine advantages—but operating in today’s multi-state e-commerce environment requires understanding obligations across all jurisdictions, not just the tax-free ones.
Whether you’re expanding into New Hampshire, managing nexus in multiple states, or overwhelmed by filing requirements, professional help eliminates guesswork and prevents costly mistakes.
Every hour you spend researching rules, filing returns, or responding to notices is an hour not spent growing your business.
When you’re ready to take sales tax compliance off your plate, we’re ready to help. Contact us today to discuss your sales tax needs or schedule a free consultation.
Want to learn more? Get our “10 Sales Tax Mistakes E-Commerce Sellers Make” e-book.
Frequently Asked Questions
Does New Hampshire have sales tax?
No. New Hampshire has no statewide sales tax on retail purchases, making it one of only five states without sales tax.
What taxes does New Hampshire have instead?
New Hampshire funds operations through property taxes (among the highest nationally), the Business Enterprise Tax (0.55% on payroll and capital), the Business Profits Tax (7.5% on net income), and an 8.5% Meals and Rooms Tax on hospitality services.
Do I need to collect sales tax if my business is located in New Hampshire?
You don’t collect sales tax for New Hampshire customers. But if you have economic nexus in other states (typically $100,000+ in sales), you must collect sales tax in those states based on customer location—regardless of your New Hampshire location.
Does New Hampshire’s lack of sales tax benefit online businesses?
Post-Wayfair (2018), the benefit is minimal. Online sellers must collect sales tax based on customer location, not seller location. A New Hampshire e-commerce business selling to California customers must collect California sales tax once exceeding that state’s economic nexus threshold.
What is New Hampshire’s Meals and Rooms Tax?
New Hampshire charges 8.5% tax on restaurant meals, hotel accommodations, short-term rentals, and motor vehicle rentals. This functions like sales tax for hospitality businesses, requiring registration, collection, and regular filing.
