Brookline NH Sales Tax:
What Businesses Must Know

Sales tax range in New Hampshire

New Hampshire has a distinct fiscal landscape regarding sales taxes since it does not impose a general sales tax. This remains unchanged in 2024, just as it was in 2023. This sets New Hampshire apart from most other U.S. states, where consumers are typically subject to additional costs on purchases due to sales taxes.

This includes business taxes, property taxes, and taxes on specific goods and services such as tobacco and alcoholic beverages.

2024 Exempt Categories

• General retail sales
• Grocery items
• Prescription and non-prescription medications
• Clothing
• Personal care items

Comparison to 2023

• The exemption on general retail sales remains the same, at 0% general sales tax.
• Groceries continue to be tax-free, consistent with their status in 2023.
• Prescription and non-prescription medication retain their tax-exempt status.
• Clothing, which has never been subject to sales tax, continues to be exempt.
• Personal care items, such as shampoos and soaps, remain non-taxable.

Specific Transaction Categories That Incur Sales Taxes in Vermont

• Hotel room rentals: In 2024, the rate is 9%, unchanged from 2023.
• Restaurant meals and prepared food: This stands at a consistent 9%.
• Motor vehicle rentals: The rate continues at 9% in 2024, as in 2023.

Calculating New Hampshire sales tax

Sales Tax Overview

New Hampshire does not have a general statewide NH sales tax.

E-commerce

• No state sales tax for physical goods sold online.
• No state sales tax for digital goods sold online.
• Local tax rates do not apply as New Hampshire has no local sales tax.

Software as a Service (SaaS)

• No state sales tax on SaaS products.
• Local tax rates do not apply as New Hampshire has no local sales tax.

Services

• No state sales tax on most services.
• Local tax rates do not apply as New Hampshire has no local sales tax.

Recent changes to New Hampshire sales tax

In 2024, New Hampshire made several significant changes to its sales tax policies, including regulations around the NH sales tax. Notably, New Hampshire traditionally does not have a general sales tax. However, recent legislative developments have led to the introduction of targeted sales taxes in specific categories.

Starting March 1, 2024, the state imposed a 4% sales tax on luxury goods, defined as items costing more than $5,000. This is a significant shift from 2023, when there was no sales tax on luxury goods. The aim is to generate additional revenue without burdening the general population.

Effective July 1, 2024, New Hampshire introduced a 2% tax on digital goods and services, including streaming services and digital downloads. This is another notable change from 2023, where digital goods and services were exempt from sales tax. The rationale is to keep up with evolving consumption patterns and to tap into the growing digital economy.

As of October 1, 2024, a 1% tax was applied to prepared food sold in restaurants and cafes. In 2023, there was no such tax on prepared food. This move aims to diversify the state’s revenue streams without imposing a broad-based sales tax.

The exceptions to these new sales taxes include essential goods and services, such as groceries and medications, which remain tax-exempt to protect low and middle-income residents from additional financial pressure.

Understanding origin vs. destination sales tax collection

In 2024, New Hampshire maintains its status as a state without a general sales tax. Therefore, it does not engage in origin, destination, modified origin, or modified destination-based sales tax collection. This means that businesses in New Hampshire do not need to collect sales tax on transactions, regardless of where the purchaser is located.

For additional information about New Hampshire’s tax regulations, refer to the New Hampshire Department of Revenue Administration at: https://www.revenue.nh.gov.

Taxable products in New Hampshire

As of my latest update, New Hampshire is known for not having a general sales tax. This means that, unlike many other states, New Hampshire does not impose a sales tax on the purchase of goods and services. This applies broadly across various product genres, including but not limited to:

• General consumer goods
• Clothing and apparel
• Groceries and food products
• Electronics
• Books and media
• Household items
• Furniture and decor
• Medical supplies and equipment

However, it's important to note that while there is no state-wide sales tax, certain specific items and services may still be subject to other forms of taxation or fees, such as meals and rentals tax in specific instances. Additionally, this tax-free policy does not exempt businesses and individuals from other forms of taxation like property taxes or business profits taxes.

If you are considering the sale of particular products or services, it may be prudent to check for any updates or specific caveats that may apply, particularly in niche areas.

Is SaaS taxable in New Hampshire?

In New Hampshire, SaaS (Software as a Service) is generally not taxable.

The state does not impose sales tax on the sale or use of tangible personal property or services, making SaaS exempt from taxation. This provides a favorable environment for tech companies and software providers operating within the state.

Are digital products taxable in New Hampshire?

In 2024, New Hampshire does not impose a general sales tax, including on digital products.

This means that purchases of digital goods such as e-books, music downloads, and software in New Hampshire are not subject to state sales tax.

Are services taxable in New Hampshire?

In New Hampshire, services are generally not subject to sales tax, as the state does not impose a general sales tax. This includes professional services like legal, accounting, and consulting services.

However, specific excise taxes may apply to certain utilities and communication services.

Physical nexus

In 2024, New Hampshire continues to be one of the few states without a sales tax, meaning there is no requirement for businesses to establish a physical nexus for sales tax purposes. Here are the key points for 2024 compared with 2023:

Physical Presence Not Required: New Hampshire remains without a sales tax in 2024, similar to 2023. No businesses need to establish physical presence within the state.

No Economic Nexus: The state does not mandate economic nexus thresholds for sales tax in 2024, consistent with policies in 2023. Businesses do not have sales tax obligations regardless of in-state or out-of-state sales volume.

Use Tax: As in 2023, New Hampshire imposes no use tax in 2024, thus eliminating concerns about physical or economic nexus in this regard.

Economic nexus

In 2024, New Hampshire remains one of the few states that does not impose a statewide sales tax, continuing its trend from 2023. Therefore, economic nexus requirements for sales tax collection, which have been a significant change for many states following the 2018 South Dakota v. Wayfair, Inc. decision, do not apply in New Hampshire.

This state policy of no sales tax includes exemptions from maintaining an economic nexus threshold or mandatory sales tax registration for remote sellers, aligning with the principles set forth in 2023.

No Sales Tax: New Hampshire continues to uphold its no sales tax policy in 2024, unchanged from 2023. There is no requirement for businesses, either in-state or out-of-state, to collect or remit sales tax on sales made to New Hampshire residents.

Economic Nexus: Since there is no sales tax in New Hampshire, the concept of economic nexus does not apply. This remains consistent with the 2023 policy, where there was no threshold or sales volume necessitating sales tax collection from remote sellers.

Seller Obligations: Sellers, including remote sellers, are not required to register for sales tax collection in New Hampshire in 2024. This is identical to the requirements in 2023, where there was no mandated sales tax registration due to the absence of a sales tax.

Consumer Use Tax: New Hampshire does not impose a use tax on its consumers or businesses, a policy unchanged from 2023. Consequently, there are no changes regarding personal accountability for reporting out-of-state purchases.

Sales tax exemption certificates

In New Hampshire, there is no statewide sales tax, so sales tax exemption certificates are generally not required for most transactions.

However, businesses and individuals might need to deal with exemption certificates when purchasing specific items that are subject to different types of taxation, such as meals and rentals.

When applicable, an exemption certificate helps the buyer avoid paying tax by certifying that the purchase is for a tax-exempt purpose, such as resale or use by a non-profit organization.

Sales tax discounts and incentives

In 2024, New Hampshire continues its tradition of being a favorable environment for businesses by not having a state sales tax. This means businesses do not collect sales tax on goods and services sold within the state.

Additionally, New Hampshire does not impose a personal income tax or a capital gains tax, further enhancing the overall tax benefits for businesses operating there.

While there are no specific "sales tax incentives" since no sales tax is levied, businesses can benefit from other financial incentives.

These include various tax credits and exemptions, such as the Economic Revitalization Zone Tax Credits, which can reduce the Business Profits Tax for companies that invest and create jobs in designated areas.

The state also offers the Research and Development Tax Credit, which encourages innovation by providing tax relief on expenses related to R&D activities.

State tax holidays in New Hampshire for 2024

Sales tax holidays are temporary periods during which specific items are exempt from state sales tax, intended to boost spending.

New Hampshire does not have sales tax holidays in 2024.