What Is the New Hampshire Business Enterprise Tax?

The New Hampshire Business Enterprise Tax (BET) is applied to the value of conducting business within the state, not on a company’s profit. Its tax base is calculated from the total compensation, interest, and dividends a business pays or accrues during its tax period. The BET is one of the two main business taxes in the state.

The tax applies to for-profit enterprises, including corporations, partnerships, limited liability companies (LLCs), and sole proprietorships that conduct business in New Hampshire. The purpose of the tax is to assess a business’s economic presence within the state.

Determining Who Must File

A business must file a Business Enterprise Tax return if it meets certain thresholds set by the New Hampshire Department of Revenue Administration (NHDRA). A filing obligation exists if the business exceeds one of two financial benchmarks during its taxable period. The first is the company’s total gross business receipts from all activities.

For taxable periods beginning on or after January 1, 2025, a business must file a BET return if its gross receipts are more than $298,000. The second threshold is the enterprise value tax base. If the sum of compensation, interest, and dividends paid or accrued exceeds $298,000, a return must also be filed. These thresholds are subject to biennial adjustments.

Exceeding just one of these thresholds triggers the filing requirement. This rule applies even if the final calculation results in no tax being owed.

Calculating the Business Enterprise Tax

The calculation of the Business Enterprise Tax begins with determining the enterprise value tax base. This base is the sum of three types of expenditures made during the taxable period. The first component is compensation, which includes all wages, salaries, commissions, bonuses, and other payments to employees, officers, or owners for services.

The second component is interest paid or accrued by the enterprise on business debt and other obligations. The third component consists of dividends paid by the business, which are distributions of property made by a corporation to its shareholders.

Once the enterprise value tax base is determined, a flat tax rate is applied. For taxable periods ending on or after December 31, 2022, the BET rate is 0.55%. For example, a business with an enterprise value tax base of $500,000 would have a BET liability of $2,750 ($500,000 x 0.55%). This is calculated before any credits are applied.

The Business Profits Tax Credit

A feature of the New Hampshire business tax system is the interaction between the Business Enterprise Tax and the Business Profits Tax (BPT). The amount of BET a business pays can be claimed as a credit against its BPT liability for the same period. This prevents businesses from being taxed twice on the same economic activity and makes the BET act as a minimum tax.

If a business has a BPT liability, the BET paid reduces that liability dollar-for-dollar. For instance, if a company owes $10,000 in BPT and has paid $2,750 in BET, the credit reduces the final BPT due to $7,250. This makes the total tax burden the greater of the two tax calculations.

The credit is non-refundable, meaning a business will not receive a payment from the state if the BET paid exceeds the BPT owed. Any unused portion of the BET credit can be carried forward for up to ten years to offset future BPT liabilities. The credit cannot be carried back to apply against prior year tax liabilities.

Required Information and Forms for Filing

To file the Business Enterprise Tax, businesses must compile financial data for the taxable period. This includes the total for gross business receipts, compensation paid, interest paid or accrued, and dividends paid. These figures determine both the filing requirement and the tax base.

The primary forms are the Form BT-Summary (Business Tax Return Summary) and the Form BET (Business Enterprise Tax Return). On Form BET, the enterprise value tax base is calculated by entering the totals for compensation, interest, and dividends, and the tax liability is computed.

The Form BT-Summary serves as a cover sheet, consolidating the liabilities from the BET and the BPT. Both forms can be obtained from the NHDRA’s website. Businesses must use the correct versions of the forms for the applicable tax year.

The Filing and Payment Process

Businesses must submit their forms and any payment due by the deadline. For partnerships, the tax return is due on the 15th day of the third month following the end of the taxable year. For corporations, proprietorships, and fiduciaries, the deadline is the 15th day of the fourth month after the close of the tax period.

Returns can be filed by mail or electronically through the state’s online portal, NH Granite Tax Connect, which also facilitates payments. If a business cannot file by the due date, an automatic seven-month extension is granted, provided that 100% of the tax due has been paid by the original deadline.

Businesses with an anticipated tax liability over $260 are required to make estimated tax payments. Quarterly payments are generally due on the 15th day of the:

• Fourth month of the taxable period
• Sixth month of the taxable period
• Ninth month of the taxable period
• Twelfth month of the taxable period

These payments can be made online or via mail with the appropriate payment voucher.