New Hampshire
Reviewed July 2026Federal §453 conformity
New Hampshire has no individual income tax — and since 2025, none at all: the old interest-and-dividends tax finished its phase-out, which matters to installment sellers specifically, because it once taxed the interest on a seller's note. Today both the gain and the interest arrive tax-free at the individual level. The catch lives at the business: New Hampshire's Business Profits Tax reaches profits the enterprise itself earns — including gain when the business sells its assets — so the deal's structure decides whether New Hampshire collects anything at all.
Nonresident sourcing
New Hampshire makes no individual income tax claim on installment payments, resident or not. The inbound caution stands — property or a business in a taxing state stays taxable there — and the entity-level point cuts for nonresidents too: a business operating in New Hampshire owes BPT on its gain no matter where its owners live.
Withholding
New Hampshire imposes no withholding on installment payments. A source state's closing-table regime — Massachusetts and Maine sit next door — applies regardless of the seller's New Hampshire address.
Selling, then moving (residency change)
Establishing New Hampshire residency stops a former state from taxing the seller as a resident, but it does not strip that state's claim on gain from property or a business located there — the Massachusetts border sees this play out constantly, and Massachusetts-source gain follows the gain, not the seller. The move helps most when made and documented before the sale.
Pass-through entity (PTE) tax election
There is no PTE election because there is no individual income tax to work around. New Hampshire's entity-level taxes are mandatory, not elective — the BPT and BET apply on their own terms, with the federal deduction that entity-level taxes carry.
Estate and IRD
New Hampshire imposes no estate or inheritance tax. At death the federal rules apply — heirs pay income tax as payments arrive — with no state layer, and no interest-and-dividends tax waiting for them either, now that the repeal is complete.
Planning notes
New Hampshire's list has one big item: structure. An owner selling stock keeps the whole transaction at the individual level, where New Hampshire taxes nothing; a company selling its assets runs the gain through the BPT at 7.5% first. That is a real number on a real closing, and it belongs in the asset-versus-stock conversation from the first meeting. Beyond that: the usual edges — Massachusetts-source assets, recent arrivals, and documentation for the year of sale.
New Hampshire's Business Profits Tax reaches gain the enterprise itself recognizes, including on an asset sale, at 7.5%. A stock sale by the owner escapes New Hampshire entirely; an asset sale by the company does not. Put the structure question on the table before the letter of intent.
New Hampshire's interest-and-dividends tax — which historically taxed the interest on a seller's installment note — completed its repeal for years after 2024. Both components of every payment now arrive free of state tax at the individual level.
Educational information, current as of the July 2026 review. State law changes; confirm treatment with a qualified advisor before structuring a transaction.
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