NEW HAMPSHIRE
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NICKNAME
The Granite State
BOTTOM LINE: MIXED TAX PICTURE
New Hampshire depends more on property taxes for revenue than most states because there are no general income taxes or sales taxes. It also receives substantial revenue from taxes on motor fuels, tobacco products and alcoholic beverages sold through state liquor stores. The state income tax is limited to a 5% tax on dividends and interest income; a $1,200 exemption is available for residents 65 or older. Seniors can also defer some property taxes, subject to income and asset limitations. According to a study by the Lincoln Institute of Land Policy and the Minnesota Taxpayers Association, New Hampshire's net real estate taxes rank fourth-highest in the nation.
STATE SALES TAX
There’s no general state sales tax. There are, however, some specific sales taxes: 9% on restaurants, prepared foods, hotel rooms and car rentals; 55 cents per megawatt hour on electricity; 7% on telecommunication services; plus additional taxes on real estate transfers and alcohol.
INCOME-TAX RANGE
New Hampshire taxes only dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers) at a 5% tax rate.
SOCIAL SECURITY
Benefits are not taxed.
EXEMPTIONS FOR OTHER RETIREMENT INCOME
Retirement income is not taxed. A $1,200 exemption is available for residents 65 or older for taxable dividends and interest.
PROPERTY TAXES
Property taxes, based on assessed valuation, are assessed, levied and collected by municipalities. A state education property-tax rate (for 2011, it was $2.325 per $1,000 of value) is assessed on all New Hampshire property owners.
Tax breaks for seniors: An elderly exemption for property taxes is available to those age 65 and older who have lived in New Hampshire for at least five years. Towns and cities set additional eligibility rules, but the minimum exemption is $5,000 off the assessed home value. Property taxes can be deferred but accrue interest at the rate of 5% per year. The deferred property tax may not exceed 85% of the equity value of the residence. The deferral is available (if granted by the assessing officials) to any resident property owner who is at least 65 years old. There is a Low and Moderate Income Homeowner’s Property Tax Relief program in New Hampshire: You must own a home subject to the state education property tax; reside in the home as of April 1 of the year for which the claim for relief is made; and have a total household income of $20,000 or less if single or $40,000 or less if married or head of a New Hampshire household.
INHERITANCE AND ESTATE TAXES
There is no inheritance tax and no estate tax.
Visit RetirementLiving.com for a complete rundown of taxes in New Hampshire.
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