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Editorial 7 MIN READ

New Hampshire in April 2024: a cheap front door and a tax code that bites in back

A $100 LLC, a $100 report, and two business taxes that quietly do most of the work

The Editors
Staff, Incorporator.org
7 min read Updated
Contents 6 sections
  1. What you pay at the Secretary of State
  2. The two taxes that do the real work
  3. The Interest and Dividends tax, on its way out
  4. What "no sales tax, no wage income tax" actually means
  5. Who New Hampshire actually makes sense for
  6. Sources

New Hampshire LLC costs $100 to form online and $100 a year to keep. The cheap part is the Secretary of State; the expensive part is the Department of Revenue Administration, where the Business Profits Tax and Business Enterprise Tax run in parallel on almost everyone.

This is a guide for someone forming a New Hampshire LLC filing fees question in early April 2024, with the annual report deadline one day behind us and the interest-and-dividends repeal one year ahead.

What you pay at the Secretary of State

Formation runs through NH QuickStart, the online portal operated by the Corporation Division. A domestic LLC files a Certificate of Formation under RSA 304-C:32 for a $100 fee. Foreign LLCs registering to do business pay $100 as well, under RSA 304-C:172. The filing is short: a name that complies with RSA 304-C:32, a registered office and agent in New Hampshire under RSA 304-C:45, and a signature. QuickStart returns approved filings within a few business days and sooner for most routine submissions.

There is no statutory expedite tier the way Delaware sells one. What you get for the $100 is the standard processing queue, which in practice has been fast enough that few filers bother escalating.

The annual report is where new filers most often trip. Every New Hampshire LLC owes an annual report with a $100 fee, due April 1, under RSA 304-C:172. The report is not calendar-triggered to formation anniversary; it is the same date for everyone. If you formed on March 20 you owe a report roughly two weeks later, with no proration. Late reports carry a $50 late fee and, after continued non-filing, the Secretary of State administratively dissolves the LLC under RSA 304-C:139. Reinstatement is available but costs more than staying current.

QuickStart accepts the annual report online and will remember the entity for subsequent years if the person who files keeps the login. The state mails a paper reminder to the registered office each winter; treat it as real mail, not junk, because the penalty path starts the day after April 1.

The two taxes that do the real work

New Hampshire does not have a broad-based personal income tax on wages and does not have a general sales tax. Those two absences are the state's marketing pitch and they are accurate. What the state does have is a pair of business taxes that apply to any entity doing business in the state, LLCs included, and that most first-time founders underestimate.

The Business Profits Tax is imposed under RSA 77-A. For tax periods ending on or after December 31, 2023, the rate is 7.5 percent of taxable business profits. The base is federal taxable income adjusted for New Hampshire additions and subtractions, then apportioned. An LLC taxed as a partnership or a disregarded entity still files at the entity level; the BPT is not a pass-through tax in the federal sense. The filing threshold is gross business income above $92,000 for tax years beginning on or after January 1, 2023, under RSA 77-A:6.

The Business Enterprise Tax is imposed under RSA 77-E. The rate for periods ending on or after December 31, 2023, is 0.55 percent. The base is different from the BPT and this is the subtlety that catches people: the BET applies to the enterprise value tax base, which is the sum of compensation paid or accrued, interest paid or accrued, and dividends paid. A profitable consultancy with three employees may owe more BET than BPT in a given year, because payroll runs even when margins do not. The BET filing threshold for tax years beginning on or after January 1, 2023, is gross business receipts over $281,000 or enterprise value tax base over $281,000 under RSA 77-E:5. BET paid is a credit against BPT, so the two taxes are coordinated rather than stacked, but they are filed together on Form NH-1065, NH-1120, or NH-1040 with Schedule BET attached.

The practical version: if your LLC will do meaningful business in New Hampshire, budget for both returns. If you are below both thresholds, you still file if asked; if you are above either, you file. The thresholds are checked on gross numbers, not net.

The Interest and Dividends tax, on its way out

New Hampshire's Interest and Dividends Tax under RSA 77 is an income tax on interest and dividend income received by residents and certain entities. For tax years beginning on or after January 1, 2024, the rate is 3 percent. It was 4 percent in 2023 and 5 percent for years before that, stepped down on a schedule enacted in 2021 and amended in 2023.

The tax is repealed effective for tax periods beginning after December 31, 2024. That is the real headline for 2024 planning: this is the last year the I&D tax applies. A New Hampshire resident who holds taxable interest or qualifying dividend income will file a 2024 DP-10, then never again for New Hampshire purposes.

For an LLC, the I&D touch point is narrow but worth naming. A multi-member LLC that distributes interest or dividend income to New Hampshire resident members can, in some ownership structures, create I&D reporting for the members. The DRA's guidance on which LLC distributions are taxable interest or dividends under RSA 77 is less clean than anyone would like; entities with investment income and New Hampshire resident members should read DRA Technical Information Release 2023-005 and the DP-10 instructions together, not separately.

What "no sales tax, no wage income tax" actually means

The absence of a broad-based sales tax is real. New Hampshire does not impose a sales and use tax on retail transactions. There is a 9 percent Meals and Rooms (Rentals) Tax under RSA 78-A on prepared food, hotel rooms, and motor-vehicle rentals, and a Communications Services Tax under RSA 82-A on two-way communications services, but neither is a general sales tax.

The absence of a wage income tax is also real. New Hampshire does not tax wages, salaries, tips, or self-employment earnings at the personal level. Residents who work in Massachusetts or Maine will owe those states' taxes on income sourced there, but New Hampshire itself takes nothing from the W-2 or the Schedule C.

Where the shorthand misleads is in conflating "no income tax" with "no business tax." The BET's 0.55 percent of compensation paid means every New Hampshire payroll dollar has a small state tax attached at the entity level. For a 20-person services firm with a $2 million payroll, that is $11,000 a year in BET on compensation alone, before interest or dividends paid. It is not crushing, but it is not zero, and it is the line item that surprises people who moved here from a true no-tax-on-business state.

Who New Hampshire actually makes sense for

Three situations reward a New Hampshire LLC in 2024.

The first is the resident founder running an operating business at home. Forming where you live, paying the $100 and the $100 and the two business-tax returns, is simpler than chasing a Wyoming shell that will still have to foreign-qualify back into New Hampshire the moment you hire an employee or sign a local lease. The foreign qualification fee is also $100 and the same annual report cycle applies, so you pay twice to live in two places on paper.

The second is the retail or services business that benefits from the absence of sales tax. A furniture store, a boat dealer, a high-ticket retailer with out-of-state customers willing to drive: New Hampshire's no-sales-tax posture is a real commercial advantage, and it survives the Wayfair-era complications on the seller's side because the seller is not collecting on in-state sales at all.

The third, narrowly, is the investor considering residency ahead of a liquidity event in 2025 or later. The I&D repeal on January 1, 2025, means investment income earned by a New Hampshire resident in 2025 and beyond faces no state tax. For a founder selling a position or receiving dividends from a family holding company, the cutover date is worth circling. The 2024 tax year is the last year the 3 percent applies; the planning window is short and specific.

The businesses for which New Hampshire is a cosmetic choice are the ones where the BPT and BET will consume the sales-tax savings. A high-margin SaaS business with modest payroll may end up paying more in Concord than it would have paid in a state with a 6 percent sales tax and no entity-level profits tax, because the SaaS business had almost no taxable sales in the first place. Run the math on payroll, profit, and interest paid before assuming the state is cheap.

If you are forming this week, file through QuickStart today, mark April 1, 2025 on the compliance calendar for the next annual report, and make an appointment with a New Hampshire CPA before the first BPT return falls due. The filing fees are the easy part; the DRA is where the year gets decided.

Sources

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