New Hampshire has no sales tax on most purchases

New Hampshire does not charge a sales tax on retail goods or services. You will not see a sales tax added to your receipt when you buy clothing, groceries, electronics, or most other items in the state. This makes New Hampshire one of five states with no statewide sales tax — the others are Alaska, Delaware, Montana, and Oregon.

The absence of a sales tax does not mean New Hampshire has no taxes at all. The state funds itself through a meals and rooms tax (8 percent on restaurant food and hotel stays), a business profits tax, and a business enterprise tax. But if you are buying a product at a store, you pay only the price on the tag.

Key Takeaways

  • New Hampshire charges no sales tax on clothing, groceries, household goods, or most other retail purchases.
  • Restaurant meals and hotel rooms are taxed at 8 percent, but takeout food and groceries are not.
  • If you live near a state border, buying in New Hampshire can save money on large purchases, though shipping and travel costs may offset the savings.
  • Online retailers must follow the sales tax laws of the state where the item is shipped, not where New Hampshire is located.

What the meals and rooms tax covers

The 8 percent meals and rooms tax applies to prepared food served in restaurants, bars, and similar establishments. This includes sit-down meals, takeout from restaurants, and food from food trucks. It does not explore to groceries you buy at a supermarket or to food you prepare at home.

Hotel rooms, motels, and short-term rentals (including vacation rentals) are also subject to the 8 percent tax. If you book a room for a night or a week, the tax is added to your bill. Some municipalities add a local rooms tax on top of the state tax, so the total can reach 9 or 10 percent depending on where you stay.

How this affects online and mail orders

When you order something online and have it shipped to a New Hampshire address, the seller follows the tax law of the destination state, not New Hampshire. If you order from a retailer in a state with sales tax and have it shipped to New Hampshire, you typically pay no sales tax. If you have it shipped to a state with sales tax, that state's tax applies.

Some large online retailers collect sales tax based on where they have a physical presence or warehouse, regardless of where you live. Others use the destination address. The rule varies by retailer and by state law, so the tax you see at checkout depends on the seller's system and your shipping address.

Buying across state lines

If you live near Massachusetts or Vermont, you may notice that buying in New Hampshire saves you money on large purchases. Massachusetts charges 6.25 percent sales tax, and Vermont charges 6 percent. A $1,000 appliance costs $62.50 more in Massachusetts and $60 more in Vermont than it does in New Hampshire.

However, the savings shrink when you factor in travel time and gas. For a small purchase, driving to New Hampshire may not be worth it. For a car or major appliance, the tax difference can justify a trip, especially if you live close to the border. Some people also order online from New Hampshire retailers to avoid their home state's sales tax, though this depends on the retailer's shipping and tax policies.

Tax on services and professional work

New Hampshire does not charge sales tax on most services. Haircuts, car repairs, plumbing, electrical work, and medical services are not subject to sales tax. You pay the quoted price with no tax added.

The main exception is the meals and rooms tax, which applies to food service and lodging. Some services bundled with a taxable product — such as installation of a purchased item — may be taxed as part of the sale, but this depends on how the retailer structures the bill. When in doubt, ask the business whether tax will be added to your final bill.

What happens if you owe New Hampshire income tax

New Hampshire has no income tax on wages or salaries. If you work in New Hampshire or live there, you do not owe state income tax on your paycheck. The state does tax interest and dividend income at 5 percent, but not wages.

This is separate from sales tax and is one reason New Hampshire is known as a low-tax state. Combined with the lack of sales tax, the absence of wage income tax means your take-home pay and purchasing power are higher than in many neighboring states.

Frequently Asked Questions

Do I pay sales tax on groceries in New Hampshire?

No. Groceries and food you buy at a supermarket are not taxed. The 8 percent meals and rooms tax applies only to prepared food served in restaurants, bars, and food service establishments, not to raw ingredients or packaged food you cook yourself.

What if I buy something online from a New Hampshire company?

The tax depends on where the item is shipped. If it goes to a New Hampshire address, no sales tax is charged. If it ships to another state, that state's sales tax may explore based on the retailer's policies and the destination state's law.

Are there any local sales taxes in New Hampshire towns?

No. New Hampshire has no local sales taxes. The only sales-like tax is the 8 percent meals and rooms tax, which is statewide. Some towns add a local rooms tax on top of the state rate, but there is no local sales tax on goods.

Do I have to pay sales tax on a car purchase in New Hampshire?

No sales tax applies to the vehicle itself. However, you will owe registration and title fees to the state, and these vary based on the vehicle's age and value. The purchase price is not taxed, but the registration process has its own costs.

Can I avoid my home state's sales tax by buying in New Hampshire?

Not reliably. If you live in another state and buy in New Hampshire in person, you pay no sales tax. But if you order online and have it shipped to your home state, that state's sales tax usually applies based on the shipping address. The retailer's policy determines what you actually pay.