New Hampshire LLC Taxes

New Hampshire LLC Taxes comprise various state taxes, despite the absence of a general state income tax. 

This guide covers LLC Taxes in New Hampshire, detailing the specific taxes applicable and providing essential information for both domestic and foreign LLCs operating in the state.

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

How Is an LLC Taxed in New Hampshire?

Taxation in New Hampshire isn’t applied in the same way to all LLCs – instead, it varies depending on a number of factors, such as an LLC’s nature, locality, and tax election.

While LLCs typically benefit from pass-through taxation by default, they can elect to be taxed as one of the following:

• C Corporations: The LLC is treated as a separate entity to its owners, paying the New Hampshire business profits tax (the state’s corporate income tax) rates on its total profit while the owners also pay personal income taxes on any distributions they take.
• S Corporations: In return for paying owners a “reasonable salary,” the LLC’s remaining profits are distributed among members without a need to pay self-employment tax or FICA tax on them.

The following sections go into the various tax responsibilities of your LLC at local, state, and federal levels in New Hampshire to help you ensure your LLC navigates them effectively.

New Hampshire Local Taxes

New Hampshire has various local tax laws depending on the municipality and some taxes that are unique to this state. Below, you will find a brief overview of these local taxes that could apply to your LLC.

Local Property Tax

Local property taxes in New Hampshire can significantly impact an LLC's financial planning, as they vary widely between municipalities. These taxes are based on the assessed value of real and personal property owned by the business.

Key Points on Local Property Tax:

• Varied Rates: Each town or city sets its own property tax rate, influenced by local governance decisions.
• Calculation Method: Tax rates are a percentage of the property's assessed value, such as 1.5% or 2%.
• Example for Clarity: In Manchester, a property valued at $300,000 with a 1.5% rate would incur a $4,500 annual tax.
• Rate Differences: Rates differ across towns – Nashua's rate is 1.9%, while Portsmouth's is 2.8%.

Understanding these nuances is crucial for LLCs to effectively manage their financial obligations and budgeting within New Hampshire.

Note: See New Hampshire’s Municipal Directory for more information on where to file property taxes in your locality. 

State Education Tax

In New Hampshire, the State Education Property Tax (SWEPT) is a mandatory tax for towns and cities, directly affecting LLCs owning property. This tax plays a significant role in funding local education while impacting the tax liabilities of businesses.

Essential Aspects of SWEPT:

• Mandatory Application: All towns and cities in New Hampshire must apply SWEPT to eligible properties.
• Fixed Rate: SWEPT is charged at a uniform rate of $6.60 per thousand of equalized property valuation.
• Billing Process: Included in the regular property tax bill at the local level.
• Funding Purpose: Revenue from SWEPT is allocated to the education trust fund, not the state budget.
• Eligibility for LLCs: LLC-owned properties are subject to SWEPT if they are within a participating town or city, have a physical presence in New Hampshire, and have a fair market value of $1,000 or more.

Understanding SWEPT is vital for LLCs in New Hampshire to ensure compliance and accurate budgeting for property-related expenses.

Note: For more information on SWEPT rates, we recommend having a look at the latest property tax rates and related data published annually by the New Hampshire Department of Revenue Administration. 

Recommended Service: Schedule a free consultation with 1-800Accountant to ensure your business remains legally compliant. 

New Hampshire State Taxes

Every state has its own regulations and rules that dictate how it taxes individuals and businesses. Below is a list of the most relevant state-level taxes for LLCs in New Hampshire. 

Business Enterprise Tax

The Business Enterprise Tax (BET) is a crucial tax component in New Hampshire, particularly for LLCs and other business entities. It's essential to understand how this tax is calculated and who it applies to for effective financial management.

Key Points on BET:

• Applicability: BET affects most businesses, including LLCs.
• Tax Base Calculation: It is based on the enterprise value tax base, encompassing compensation, interest, and dividends.
• Rate Variation: BET rates range from 0.55% to 0.75%, depending on the taxable period.
• Filing Threshold: The current threshold is $250,000 in gross receipts or enterprise value tax base for periods beginning on or after December 31, 2022. For periods ending before this date, the threshold was lower.
• Exemptions: Certain types of businesses, such as those in agriculture, nonprofits, schools, and hospitals, are exempt from BET.

It's important for LLCs to determine their liability for BET and understand the exemptions to ensure compliance with New Hampshire's tax regulations.

Business Profits Tax

The Business Profits Tax (BPT) in New Hampshire is a significant tax that impacts LLCs and other businesses operating within the state. Understanding its rate, threshold, and nexus requirements is key for businesses to remain compliant.

Essential Insights on BPT:

• Scope of Application: BPT is levied on income from business activities conducted in New Hampshire.
• Rate Reductions: The rate is decreasing annually, set at 7.5% as of December 31, 2023.
• Filing Threshold: For tax years beginning on or after January 1, 2023, businesses must file if their income exceeds $92,000.
• Nexus Requirements: BPT, in conjunction with BET, applies to businesses with a significant presence in New Hampshire, established through factors like employees, property, or sales in the state.
• Filing Obligations: LLCs with a state nexus must file a combined return for BPT and BET and report any Net Operating Loss (NOL) carryover or deductions.

For LLCs operating in New Hampshire, accurately determining BPT obligations is crucial for tax planning and compliance with state tax laws.

Interests and Dividends Tax

The Interest and Dividends Tax (I&D Tax) in New Hampshire is a specific tax that affects income from interest and dividends. Understanding its rate, exemptions, and how it applies to LLCs is important for tax compliance.

Key Points on I&D Tax:

• Tax Rate: The I&D tax rate in New Hampshire is set at 5%.
• Exemptions and Deductions: Individuals with interest and dividend income below $2,400 ($4,800 for joint filers) are exempt. Additional exemptions are available for seniors, the blind, or disabled individuals.
• LLC Exemption: LLCs, by default, are exempt from I&D Tax as they are pass-through entities. The members report their share on personal tax returns, not subject to I&D Tax.
• Taxation for Corporate-Classified LLCs: If an LLC elects to be taxed as a corporation, it becomes subject to I&D Tax on interest and dividend income.

For LLCs and their members in New Hampshire, it's essential to understand these aspects of I&D Tax to ensure accurate tax reporting and take advantage of applicable exemptions.

Note: You can use the fillable forms for the I&D tax, which includes filing instructions including estimated payments, exceptions, and extensions. 

Real Estate Transfer Tax

The Real Estate Transfer Tax (RETT) in New Hampshire is a crucial consideration for LLCs involved in real estate transactions. This tax affects both buyers and sellers and includes specific provisions for real estate holding companies.

Essential Aspects of RETT:

• Tax Rate: RETT is charged at $0.75 per $100 of the transaction value for real property sales, grants, and transfers.
• Applicability: Applies to both buyers and sellers in all contractual property transfers, except for specific exemptions.
• Impact on LLCs: RETT is relevant for transfers involving real estate holding companies, defined as entities earning over 35% of income from real estate in New Hampshire.
• Tax Calculation: The tax is based on the fair market value of the New Hampshire real estate interest being transferred.
• Exemptions: Certain transfers within real estate holding companies are exempt, including transfers between spouses, to revocable trusts, charitable organizations, and governmental entities.

For LLCs engaged in real estate activities in New Hampshire, understanding and complying with RETT is essential for smooth property transaction processes.

Communication Services Tax

The Communication Services Tax (CST) in New Hampshire is a significant consideration for LLCs providing two-way communication services within the state or having a physical presence there. This tax applies to a wide range of communication services and impacts both service providers and consumers.

Essential Aspects of CST:

• Tax Rate: CST is imposed at a rate of 7% on the gross charges for two-way communication services provided to consumers within the state.
• Applicability: CST applies to LLCs that offer telephone, internet, cable, satellite, and prepaid wireless services in New Hampshire.
• Tax Calculation: The tax is calculated based on the total gross charge for the communication services provided to consumers within the state.
• Exemptions: While CST is generally applicable, certain exemptions or deductions may apply under specific circumstances. Consult with tax authorities or legal experts for details on exemptions.

For LLCs engaged in providing two-way communication services in New Hampshire, understanding and complying with CST is crucial to ensure smooth operations and compliance with state tax regulations.

Note: You can find more information about the CST by visiting the Forms & Instructions page on the Department of Revenue Administration's website. 

Gravel Tax

The Gravel Tax in New Hampshire is a tax imposed on the excavation of earth from any property within the state. This tax has specific rules and requirements that LLCs engaged in earth excavation activities must adhere to.

Essential Aspects of Gravel Tax:

• Tax Rate: The Gravel Tax is charged at a rate of $0.02 per cubic yard of earth excavated.
• Collection and Remittance: The responsibility for collecting the tax from the property owner and remitting it to the Department of Revenue Administration falls on the business conducting the excavation.
• Applicability: The Gravel Tax applies to LLCs involved in various earth excavation activities, including construction, landscaping, mining, or quarrying.
• Filing Requirements: LLCs are considered separate taxable entities, and they must file a PA-38 Notice of Intent to Excavate with the Department of Revenue Administration before commencing any excavation work.
• Administration and Enforcement Fee: When filing the notice, LLCs are required to pay an administration and enforcement fee of $100 annually.

Compliance with Gravel Tax regulations is crucial for LLCs engaged in earth excavation activities in New Hampshire to ensure legal and financial compliance with state tax laws.

Meals and Rooms (Rentals) Tax

The Meals and Rooms (Rentals) Tax in New Hampshire is a fee that is imposed on various taxable services, including meals, room occupancy, and motor vehicle rentals. LLCs engaged in providing these services must comply with the state's tax regulations.

Essential Aspects of Meals and Rooms (Rentals) Tax:

• Tax Rate: The current tax rate for Meals and Rooms (Rentals) Tax is 8.5%, which represents a reduction from the previous rate of 9%.
• Tax Collection: The tax is paid by the consumer and is collected by operators of hotels, restaurants, or other establishments that offer taxable meals, room rentals, and motor vehicle rentals.
• Applicability: LLCs are subject to this tax if they provide any of the taxable services mentioned in the state, such as meals, room rentals, or motor vehicle rentals.

Compliance with Meals and Rooms (Rentals) Tax regulations is essential for LLCs offering these taxable services in New Hampshire to ensure adherence to state tax laws and rates.

Note: See the updated Meals and Rentals Tax Booklet as well as the forms and instructions page for more details. 

Medicaid Enhancement Tax

The Medicaid Enhancement Tax (MET) in New Hampshire is a tax obligation specifically applicable to LLC owners or operators of hospitals within the state. This tax has unique requirements and deadlines that hospitals must adhere to.

Essential Aspects of Medicaid Enhancement Tax:

• Tax Rate: The tax rate for MET is set at 5.4% for the taxable period ending June 30, 2023.
• Taxable Period: The taxable period for MET is defined as the 12-month period commencing on July 1 and concluding on June 30 of the following year.
• Filing Deadline: Hospital LLCs must file a return with the Department of Revenue Administration by April 15th of each year. This filing should include the final payment of the MET that is due for that period.
• Recordkeeping: Hospital LLCs are required to maintain records of their net patient services revenue and their portion of the MET paid by their parent corporation.

Compliance with Medicaid Enhancement Tax regulations is essential for LLCs operating hospitals in New Hampshire to meet their tax obligations and avoid penalties or fines. Keeping accurate records and meeting filing deadlines is crucial for proper tax administration.

Note: You can find the forms and instructions for filing the MET on the Department of Revenue Administration website.

Nursing Facility Quality Assessment

The Nursing Facility Quality Assessment (NFQA) is a fee applied to nursing facilities in New Hampshire based on their net patient services revenues. Even though NFQA does not directly apply to LLCs, those owning or operating nursing facilities should be aware of its implications.

Essential Aspects of Nursing Facility Quality Assessment:

• Applicability: Nursing facilities in New Hampshire must pay NFQA, calculated as 5.5% of their net patient services revenues on a quarterly basis.
• Filing Deadline: The NFQA return must be filed and the payment made by the 10th day of the following month after each quarter.
• LLC Impact: While not directly applicable to LLCs, if an LLC owns or operates a nursing facility in the state, it may be responsible for paying NFQA as part of its business expenses.

Utility Property Tax

The Utility Property Tax (UPT) is a state-level tax assessed based on the fair market value of utility property. LLCs should be aware of UPT requirements if they are utility companies operating in New Hampshire.

Essential Aspects of Utility Property Tax:

• Tax Rate: UPT is imposed at a rate of $6.60 per $1,000 of the fair market value of utility property.
• Filing and Collection: Every utility company is obligated to file UPT, with collection handled by the Department of Revenue Administration.
• Distinct from Local Property Tax: UPT differs from local property taxes, which are imposed by local governments based on assessed value.
• Filing Deadlines: UPT is due annually by January 15th, with quarterly estimated payments due on April 15th, June 15th, September 15th, and December 15th.

State Excise Taxes

New Hampshire imposes various excise taxes on different goods and services, which are collected by the New Hampshire Department of Revenue Administration. The excise tax rates vary depending on the type of product or service, but they are generally among the highest in the country.

• Timber Tax: Timber is considered real estate and therefore taxable. However, it is only taxed at the time it is cut at a rate that encourages the growing of timber. The tax applies to all land ownerships, including LLCs, but there are some exceptions for timber cut for personal use. 
• Cigarette and Tobacco Taxes: These taxes are paid by the wholesalers who ship or transport the tobacco products to retailers in New Hampshire. So, if you sell cigarettes, you will pay $1.78 per pack, regardless of whether the pack contains 20 or 25 cigarettes. If you sell electronic cigarettes, you will pay $0.30 per milliliter (closed system e-cigarettes) and 8% of the wholesale sales price (open system e-cigarettes). If you sell any other tobacco products (except premium cigars), you will pay 65.03% of the wholesale sales price.

Federal Taxes

Regardless of where your business is located, if you run an LLC in the US, there are a number of federal taxes you’ll need to pay. Below are some of the main types your LLC may be required to pay for federal tax purposes:

Income Tax

By default, the Internal Revenue Service (IRS) will not treat single and multi-member LLCs as separate entities from you for tax purposes. What this means is that you’ll need to report your share of your LLC’s profits on your individual tax returns and pay federal income tax on them at the personal rate of your tax bracket.

Having said that, keep in mind that LLCs can also elect to be taxed as C corps or S corps, which changes how these taxes are levied in different ways.

Self-Employment Tax

In addition to income tax, members of single- and multi-member LLCs will need to pay federal self-employment taxes on the share of the business’s profits that they report on their personal tax return at the end of the year.

This tax is levied at a flat rate of 15.3% against businesses with net earnings that exceed $400, though it is applied slightly differently to LLCs that have elected to be taxed as S corps or C corps.

Employer Taxes

If your LLC hires any employees, it will need to withhold a portion of their salaries to cover various types of taxes on your employees’ behalf – including Social Security, Medicare (FICA), and payroll taxes.

Furthermore, the members of any LLCs that have elected to be taxed as an S corp will be required to pay employment taxes on their salaries. However, in return for this, the remainder of the business’s profit after these salaries have been distributed will be safe from both self-employment and FICA taxes.

Excise Tax

If your LLC engages in certain types of business (such as the sale of alcohol and tobacco or operating a heavy highway vehicle, among others), it may need to pay federal excise taxes in order to do so legally. Each excise tax comes with its own set of rules, rates, and filing obligations you’ll need to be aware of.

Understanding and fulfilling these federal tax obligations is crucial for keeping your LLC compliant and avoiding unnecessary financial penalties and/or fines.

How to File LLC Taxes in New Hampshire

Below, we’ve outlined the general process an LLC in New Hampshire will need to follow in order to file their tax return correctly. Note that the specificities of each step will vary slightly depending on how your LLC is organized and the specific locality it’s based in. 

Step 1: Gather Your Documentation

To ensure accurate tax filing, thorough record-keeping is essential. Begin by collecting your personal information, including:

• You and your partner’s Social Security number, date of birth, and residential address
• The previous year’s tax returns
• Your LLC’s Federal Tax Identification Number or Employer Identification Number (EIN)

Then, you’ll need to gather all documentation related to your business’s income, such as:

• Invoices you’ve issued
• Sales transaction logs
• Electronic payment reports from services like PayPal or Stripe

Lastly, assemble all records pertaining to your business expenses, which should cover:

• Lease receipts for your business premises
• Bills for utilities
• Records of office supplies purchases
• Documentation of business-related travel
• Payroll records for employees

Note: Depending on how your LLC is organized and its tax election, you may need different information for your tax return. 

Step 2: Find The Right Tax Forms

Once you've gathered all necessary documents, the next step is to select the correct tax forms for your LLC based on its organization:

• Single-Member LLCs: The business’s total income and expenses are reported on a Schedule C form, which is attached to the owner’s personal tax return and due by April 15 or the following business day if it lands on a weekend or holiday.
• Multi-Member LLCs: File an information return using Form 1065. Members must fill out a Schedule K-1 showing their individual earnings or losses by March 15 or the next business day.
• C Corporations: File a corporate tax return using Form 1120 by the April 15 deadline or on the next business day if it's a weekend or holiday.
• S Corporations: Use Form 1120-S for the corporate tax return and distribute Schedule K-1 forms to shareholders for reporting their shares of profits or losses. The deadline for filing taxes using 1120-S is March 15 or the following business day.

Since state and local taxes will have their own individual forms and requirements, we recommend contacting your municipality or hiring an accountant for guidance.

With the appropriate documentation gathered and the correct tax forms for your business entity on hand, you’ll be ready to fill them out and submit them.

Step 3: File Your Taxes

The majority of businesses choose electronic filing for its speed, enhanced security, and reliability compared to paper filing, which can be slower and more prone to errors. Here’s how it works:

• Federal Tax Returns: The IRS provides two electronic services for tax submission: Free File for businesses with an AGI below $72,000 and Free Fillable Forms for those above the threshold.
• State Tax Returns: New Hampshire offers Granite Tax Connect, where you can pay all types of state taxes, file returns, view balances, and more. 
• Local Tax Returns: You can also file local taxes via Granite Tax Connect, but you may need to contact the Municipal and Property Division for property tax filing instructions. 

Note: These electronic filing tools are best suited for those who are already confident in handling their LLC taxes as if filling out a paper form. 

For new business owners, we recommend opting for the expertise of a tax professional in order to ensure both accuracy and compliance in your tax filings. 

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

Keep Your New Hampshire LLC Compliant

While LLCs are generally easier to maintain than corporations, there are certain state and local formalities your LLC must satisfy in order to remain compliant. 

New Hampshire LLC Annual Report

New Hampshire LLCs are required to file an annual report, which provides information about the LLC’s business activities, such as its name, address, registered agent, members, managers, and officers.

The LLC annual report is due by April t of each year following the year of registration. For example, if your LLC was formed on February 5 2023, your first annual report would be due between January 1 and April 1 of 2024. 

You can file your annual report online or by mail using the NH QuickStart service. To file online, you need to create a free account and log in. Then you can select “Business Services” and “File an Annual Report'' from the side menu. You can also use the One Click Annual Report option if there are no changes to your business or principal information. To file by mail, you need to download and fill out the Annual Report form from the NH Quickstart portal and mail it to the address provided on the form.

The filing fee for an LLC annual report in New Hampshire is $100 per year. However, if you file online, you will be charged an extra $2 for processing.

Licensure and Tax Requirements

In New Hampshire, almost all businesses are required to obtain various licenses and permits at the local, state, and federal levels. Below, we’ve broken down three of the most common types your LLC may need:

• New Business Tax Licenses: If you’re operating an LLC in New Hampshire, you will require specific business taxes and permits depending on your business activities, such as meals and room rentals, tobacco sales, communications services, etc. 
• Professional Licenses: If your LLC operates in a profession that requires a state license, such as accounting, engineering, law, medicine, real estate etc., you must apply for a professional license from the New Hampshire Office of Professional Licensing and Certification. You can use their license lookup tool to find out if your profession is regulated and what requirements you need to meet.
• Environmental Permits: If your LLC uses or produces hazardous substances, such as chemicals, pesticides, or waste materials, you may need to get an environmental permit from the New Hampshire Department of Environmental Services. 

Note: To get a list of approved activities and licensed professionals in New Hampshire, along with their governing boards and contact details, you can visit the Department of Justice website. 

New Hampshire LLC Taxes FAQs