New Hampshire Residency Requirements for Tax Purposes

While New Hampshire forgoes a general sales or income tax, it has specific obligations tied to residency. This does not eliminate all tax responsibilities for those who live within its borders. Understanding who qualifies as a resident is a necessary step in determining one’s financial duties to the state.

Defining a New Hampshire Resident for Tax Purposes

For tax purposes, New Hampshire law identifies a resident as an “inhabitant,” a term defined by one’s domicile. Domicile is the place a person considers their true, fixed, and permanent home, to which they intend to return when away. An individual can have several residences, but only one place can serve as their legal domicile at any given time.

The New Hampshire Department of Revenue Administration does not rely on a single piece of evidence to determine domicile but evaluates an individual’s circumstances to ascertain their intent. These considerations include where an individual is registered to vote, their driver’s license, and where their vehicles are registered.

Further evidence involves the location of a person’s primary residence and the amount of time they physically spend in New Hampshire. The state also examines the location of personal and professional ties, such as immediate family members, social club memberships, and business activities. No one factor is decisive; the state assesses all these elements together.

Tax Obligations of New Hampshire Residents

Historically, the primary tax obligation for New Hampshire residents was the Interest and Dividends (I&D) Tax, which was levied on income from interest and dividends. This tax was repealed for taxable periods beginning on or after January 1, 2025.

While the repeal of the I&D tax has simplified obligations, residency status still has implications for other state requirements. The state imposes a Real Estate Transfer Tax on both the buyer and the seller of property. The tax is set at a rate of $.75 per $100 of the sale price.

Establishing or Terminating New Hampshire Residency

Formally changing your domicile to or from New Hampshire requires taking deliberate steps to create a clear record of your intent. To establish New Hampshire residency, one direct action is to file a Declaration of Domicile. This sworn statement is filed with the clerk of the city or town where you reside.

Beyond the declaration, other actions are necessary to support the claim of a new domicile. This includes registering to vote in your new New Hampshire community and canceling your voter registration in your former state. You should also obtain a New Hampshire driver’s license and surrender your previous license. Registering your vehicles in New Hampshire is another step that demonstrates your intent.

To complete the transition, update your mailing address across all personal and financial accounts, including with banks, credit card companies, and insurance providers. Your federal tax returns filed with the IRS should also reflect your New Hampshire address. For those terminating New Hampshire residency, the process is reversed; you must take these same steps to establish a new domicile in another state.