Report shines light on New Hampshire’s business tax take
Tax Foundation study says state collected most corporate income tax per capita
New Hampshire collected more corporate income tax revenue per capita than any other state in 2015, and even with recent business tax cuts, the state still has one of the highest rates in the country, according to an annual report released Monday by the conservative Tax Foundation.
But because of low or no taxes on other things – like personal income and sales – New Hampshire still has one of the country’s best business tax climates, according to the report, “Facts & Figures 2017: How Does Your State Compare?”
Still, when you include the state’s relatively high property taxes, which account for two-thirds of the tax revenue raised, New Hampshire is around the middle of the pack when it comes to overall tax burden.
“Tax Freedom Day” in 2016 – the day that the average person supposedly pays off his or her taxes and starts working for him or herself – was April 22, the Tax Foundation calculated. That’s two days earlier than the rest of the nation, but there were 31 other states in the country with an earlier date.
New Hampshire receives less than most states from the federal government. Federal dollars account for 28.1 percent of the state’s budget, compared to 30 percent nationwide, meaning that the Granite State ranks 36th in the country in that regard.
According to the Tax Foundation, New Hampshire collected $433 in corporate income tax per person in 2015, the highest rate in the country, followed by Delaware ($424), and about triple the national average for state business taxes ($144). That’s up from the previous year, when the state ranked third, behind New York and Alaska.
The study compiled data before New Hampshire started cutting the business tax rate from 8.5 percent to the current 8.2 percent. (The rate is slated to go down to 7.9 percent, and may even decrease further, under a bill now being considered by the NH Senate.)
All told, the state ranked 46th for its corporate tax rate as of July 1 2016. The state also was ranked 43rd for property taxes and 41st for its unemployment insurance tax, but was second in the nation when it comes to a sales tax (behind Delaware). New Hampshire doesn’t have a general sales tax, but it does tax such items as beer, cigarettes gasoline and cars. New Hampshire ranked ninth in income tax, even though it doesn’t have that either, because it does tax interest and dividends income by five percent. (In 2015, the state collected $72 per capita in income taxes, whereas most states averaged just under $1,000.)
In addition, the study says New Hampshire has the 34th highest gasoline tax, 19th highest cigarette tax, 21st highest beer tax, 34th highest tax on cellphones, the seventh highest state debt per capita and the 23rd highest combined state and local debt per capita.
But in the end, New Hampshire ranked seventh overall for its business tax climate, the best ranking in New England. Wyoming ranks best nationwide, and New Jersey was dead last.