Changes Enacted to NH Business Taxes

July 27th, 2021 • Blog

Jim Moran, CPA, MST

On June 28, 2021, Governor Sununu signed H.B. 1 and H.B 2 which contained numerous changes to the state’s business tax system for taxable periods beginning on or after December 31, 2022.

Business Profits Tax

The Business Profits Tax (BPT) is currently 7.7%. Taxable periods beginning or ending after December 31, 2022, the tax rate will drop to 7.6%. The gross receipts filing threshold will also increase from $50,000 to $92,000. This amount will be adjusted for inflation every two years.

In addition, New Hampshire’s apportionment factor will change from the current three factors (payroll, sales, and property) to a single sales factor.

Business Enterprise Tax

The NH Business Enterprise Tax (NHBET) is currently assessed at 0.6% (.006). To be subject to the NHBET, a taxpayer must have gross receipts exceeding $222,000 or a NHBET Base (Interest, NH Compensation and Dividends) more than $111,000. For taxable years ending on or after December 31, 2022, the gross receipts and NHBET Base increase to $250,000. The NHBET base will also drop from the current rate of 0.6% to 0.55%.

NH Interest and Dividends Tax

The NH Interest and Dividends Tax (NH I&D) is a 5% tax on NH residents who have interest and dividend income more than $2,400 for individuals and $4,800 for joint filers. The I&D tax is repealed for taxable years ending after December 31, 2026, by reducing the rates as follows:

Years ending before December 31, 2023, NH I&D rate is 5%.
Years ending on or after December 31, 2024, NH I&D rate is 4%.
Years ending on or after December 31, 2025, NH I&D rate is 3%.
Years ending on or after December 31, 2026, NH I&D rate is 2%.
Years ending on or after December 31, 2027, NH I&D rate is 0%.

NH Meals and Rooms Tax

The current tax on NH Rooms and Meals is currently 9%. The rate is reduced to 8.75% beginning on or after October 1, 2021.

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