One of the few states, New Hampshire, does not impose a state capital gains tax. Taxes on capital gains are imposed when an asset or investment is sold for a profit. One of the factors that make New Hampshire a tax-friendly place for businesses and investors is the absence of a state capital gains tax.
Despite not having a state capital gains tax, New Hampshire does impose a 5% tax on interest and dividend income. Individuals who earn more than $2,400 in interest and dividends per year are subject to this tax. All people are subject to the same flat tax rate, regardless of their amount of income.
Another notable characteristic of New Hampshire is that its overall tax load is among the lowest in the country. The state levies a few taxes on particular goods like meals and lodging but does not have a general sales tax. Because of this, New Hampshire is a desirable travel and shopping destination for anyone who seek to reduce their tax burden.
Additionally, when making purchases outside of New Hampshire, residents are exempt from paying sales tax. This is due to the lack of a reciprocal agreement between New Hampshire and other states. It’s important to keep in mind, though, that when citizens of other states make purchases in New Hampshire, they must also pay sales tax there.
How come New Hampshire doesn’t pay taxes then? The state’s history and culture hold the key to the solution. One of the original 13 colonies, New Hampshire has a history of minimal government and personal freedom. The state of New Hampshire has a strong heritage of economic restraint and restricted government expenditure, which has helped to keep taxes low. The state’s motto is “Live Free or Die,” and this concept is mirrored in its tax laws.
In conclusion, the absence of a state capital gains tax in New Hampshire makes the state a desirable location for enterprises and investors. The state is a favorite among tourists and shoppers because it has no general sales tax and a low overall tax burden. Although there is an interest and dividend tax in the state, it is rather small and only applies to people with high income levels. One of the factors that contribute to New Hampshire’s reputation as a tax-friendly state for both people and businesses is the absence of a state capital gains tax.