One of the few states in the union without either a state income tax or a state sales tax is New Hampshire. As a result, residents of New Hampshire are exempt from paying income taxes on their wages as well as sales taxes on any purchases they make within the state. However, there are additional taxes that New Hampshire citizens must pay, such as company taxes, interest and dividend taxes, and property taxes.
With an average effective property tax rate of 1.99%, New Hampshire has one of the highest property tax rates in the nation. This indicates that annual property taxes paid by residents of the state amount to close to 2% of the value of their homes. New Hampshire has among of the highest business taxes in the nation, with a rate of 7.7% on profits that is among the highest in the nation.
The tax climate in neighboring states is very diverse. The state sales tax in Virginia, for instance, is 5.3%, which is very low when compared to other states in the area. The overall sales tax rate in Virginia might reach 7% if localities choose to add their own taxes on top of the state rate. Virginia is one of the states that does not currently impose a tax on software-as-a-service (SaaS) products.
In contrast, cities are not permitted to tack on their own local sales taxes to the state’s 6% sales tax in Vermont. However, SaaS products and other digital goods like music and e-books are subject to tax in Vermont. A special tax provision in Vermont allows residents to avoid paying sales tax on out-of-state purchases of autos by registering the vehicle’s title in a state without a sales tax. In many other states, this loophole has been closed, but Vermont has kept it open.
The state sales tax in Maine is 5.5%, and communities are free to tack on their own local sales taxes on top of that. SaaS items are not subject to tax in Maine, although other digital goods like music and e-books are. With an average effective property tax rate of 1.27%, Maine also has a comparatively high property tax rate.
The state of New Hampshire does not impose an income tax or a sales tax on its citizens, but they are still responsible for paying property taxes, company taxes, interest and dividend taxes, and other taxes. While Vermont has a higher state sales tax rate and taxes SaaS items, Virginia has a very low state sales tax rate but does not. Maine is in the middle of the pack, with a low sales tax and no SaaS tax. Finally, although the Vermont title gap is still in place, it is getting less and less common as other states close related loopholes.
Yes, all automobiles in Vermont that are under 15 years old must have a vehicle title. The state, however, only requires a bill of sale and registration if the car is more than 15 years old and does not require a title.