New Hampshire does not tax partners on partnership income; the entity pays BPT and BET on business activity

# Summary

New Hampshire does not tax a partner on the partner's distributive share of partnership income. There is no New Hampshire individual income tax for it to flow into — earned income has never been taxed, and the Interest and Dividends Tax was repealed effective January 1, 2025 — so there is no composite return, no nonresident withholding on distributive shares, and no PTET election.

The exception sits at the entity level, and it is substantial: a partnership conducting business activity in New Hampshire is a "business organization" and pays the Business Profits Tax and the Business Enterprise Tax on that activity, exactly as a corporation would. New Hampshire's system taxes the business, not the owner — so calling New Hampshire a no-tax state for partnerships is wrong whenever the partnership itself crosses the filing thresholds.

# What the partnership itself pays

Business Profits Tax. RSA 77-A:2 imposes the BPT "upon the taxable business profits of every business organization" — 7.5 percent for taxable periods ending on or after December 31, 2023. The Department's NH-1065 instructions state the filing trigger: "All business organizations, including Limited Liability Companies (LLC), taxed as a partnership federally must file Form NH-1065 return provided they have conducted business activity in New Hampshire and their gross business income from everywhere is in excess of $109,000 (for taxable periods beginning on or after January 1, 2025)."

Business Enterprise Tax. RSA 77-E:2 imposes the BET at 0.55 percent (periods ending on or after December 31, 2022) on the enterprise value tax base — compensation, interest, and dividends paid. For 2025 the BET return is due when total gross business receipts exceed $298,000 or the enterprise value tax base exceeds $298,000. BET paid is creditable against BPT.

A partnership files both on the BT-Summary package with Form NH-1065.

# Nothing reaches the partner

The partner-level half of the question is governed by the individual determination for New Hampshire: no tax on wages or earned income ever, and the last individual-level tax — the Interest and Dividends Tax — repealed for tax year 2025 by TIR 2025-001. A partner's distributive share, whether of business profits, interest, or dividends, produces no New Hampshire filing obligation for the partner in 2025. The BPT/BET liability belongs to the partnership itself.