What taxes apply to a new small business?

New Hampshire Small Business Taxes Overview

When starting a small business in New Hampshire, understanding the applicable taxes is essential for smooth operations and compliance. New Hampshire has a unique tax structure compared to many other states, which can impact your business planning and bookkeeping.

Key Taxes for New Hampshire Small Businesses

• Business Profits Tax (BPT): This tax applies to income from business activities conducted in New Hampshire. As of 2026, the rate is 7.7%. It applies to most businesses except those specifically exempted.
• Business Enterprise Tax (BET): This tax is based on a combination of compensation paid, interest, and dividends. The rate is 0.6%. It applies to most businesses, including corporations and LLCs.
• Interest and Dividends Tax: While primarily a personal tax, businesses structured as sole proprietorships or partnerships should consider this when planning income distribution.
• Meals and Rooms Tax: Applicable if your business operates in hospitality, lodging, or food services. The current rate is 9% on meals and rooms sold.
• Use Tax: If your business purchases taxable goods or services without paying New Hampshire sales tax (from out-of-state vendors), you may owe use tax.

Additional Operational Tax Considerations

• Payroll Taxes: While New Hampshire does not have a state income tax on wages, employers must handle federal payroll taxes and unemployment insurance contributions through the New Hampshire Employment Security (NHES).
• Recordkeeping and Reporting: Maintain accurate records of all taxable income, expenses, and payroll information. Timely tax filings with the New Hampshire Department of Revenue Administration (DRA) are required to avoid penalties.
• Business Registration: Register your business with the New Hampshire Secretary of State and obtain any necessary licenses or permits to ensure compliance with state tax requirements.
• Automation: Consider using accounting software that integrates with New Hampshire tax forms to streamline tax calculations and filing processes.

Understanding these tax obligations early helps in budgeting, cash flow management, and compliance, which are critical for successful business operations in New Hampshire.