New Hampshire Contractor Taxes and Licensing: What Trades Should Know

New Hampshire has no general sales and use tax, so contractors don't charge sales tax on labor or materials for New Hampshire jobs. Instead, businesses face two state taxes: a 7.5% Business Profits Tax once gross business income tops $109,000, and a 0.55% Business Enterprise Tax above $298,000, for periods beginning in 2025.

How is New Hampshire different for contractors?

The headline is simple. The Department of Revenue Administration (DRA) says New Hampshire "does not have a general sales and use tax." It doesn't issue resale certificates, exemption certificates or tax-exempt numbers. If a supplier asks for one, DRA suggests you refer them to the department or print its page as proof.

That doesn't make New Hampshire tax-free for a contracting business. The state taxes business income and business payroll instead, through the Business Profits Tax (BPT) and the Business Enterprise Tax (BET). Sole proprietors are in the BPT net, not just corporations. And because most of your neighbors do have a sales tax, the trap for New Hampshire crews is work across the line.

Is contractor labor taxable in New Hampshire?

No. With no general sales tax, there's no tax on labor, repairs, installation or capital improvements, and no tax line on your invoice for work in New Hampshire. The capital-improvement-versus-repair question that drives sales tax in other states doesn't come up here. Your town may still charge permit fees, and New Hampshire does have narrower taxes such as meals and rooms, but none of them apply to ordinary construction labor or materials.

Be careful when you price work in a neighboring state. In Massachusetts you're the consumer of materials on construction contracts, and in Vermont you pay 6% on materials and can't itemize the tax. For the general framework, read sales tax on labor vs. materials.

Do I owe tax on materials I buy in New Hampshire and use elsewhere?

Often, yes. Buying in New Hampshire avoids tax at the counter, but the state where the job sits can collect use tax. Two neighbors spell it out:

• Massachusetts: DOR says a 6.25% use tax is due on the full purchase price of building materials brought into Massachusetts from a non-use-tax state, and it names New Hampshire as the example.
• Vermont: the Department of Taxes says use tax isn't due on materials stored in Vermont 180 days or less for use on a job in a state with no sales tax. Going the other way, materials for a Vermont job owe Vermont's 6% if you didn't pay it at purchase.

Track where materials end up. If you run jobs in two states, keep job-level receipts so you can show which purchases went where. More in use tax for contractors.

Does New Hampshire require a contractor license?

Not for general contracting. The Office of Professional Licensure and Certification (OPLC) board directory includes no general contractor, home improvement, roofing or HVAC board. The state does license electrical work and plumbing and fuel gas work through two OPLC boards.

Where the state is silent, towns fill the gap. Building permits, inspections and any local registration happen at the city or town level, so call the building department before you quote a job in a new town. The Electricians' Board also requires journeyman and master electricians to complete 15 hours of code-update training each code cycle. For a national view, see contractor license basics.

What business taxes do New Hampshire contractors pay?

There's no personal income tax on wages. DRA says the Interest and Dividends Tax was repealed for taxable periods beginning after December 31, 2024. The two taxes that hit contractors are business taxes, per DRA's business taxes page:

• Business Profits Tax: 7.5% of taxable business profits for periods ending on or after December 31, 2023. For periods beginning on or after January 1, 2025, a business organization must file if gross business income from all activities is more than $109,000. Proprietorships file it, not only corporations.
• Business Enterprise Tax: 0.55% of the enterprise value tax base, which is compensation, interest and dividends paid. For periods beginning on or after January 1, 2025, file if gross receipts or the enterprise value tax base is more than $298,000. BET paid can be credited against BPT, with unused credit carried forward.
• Thresholds move: DRA adjusts both filing thresholds every two years.
• Estimated payments: DRA's BPT FAQ says four estimates of 25% each are due on the 15th day of the 4th, 6th, 9th and 12th months of the tax period for any liability over $200.

With no individual income tax, there's no state pass-through entity tax election to plan around. Federal quarterly estimates still apply to your profit. See quarterly estimated taxes for contractors and the quarterly estimated tax calculator.

Who needs workers' comp in New Hampshire?

Any business with an employee. The New Hampshire Department of Labor says employers must obtain workers' comp coverage "prior to the hiring of any employee." Under RSA 281-A:2, an employer is anyone who employs one or more persons. Sole proprietors and partners are covered personally only if they elect it.

Corporate executive officers and designated LLC members and managers aren't counted as employees, but only up to three; any beyond three count. The law also presumes anyone you pay for services is an employee unless they meet seven criteria for an independent contractor, so a written agreement matters when you hire subs. Read more on workers' compensation for contractors.