How to Pay Your New Hampshire Excise Tax
New Hampshire doesn’t charge a state sales tax on new vehicles, but they do charge an annual tax rate of $18/$1,000 of the list price.
Written by Andrea Barrett
Reviewed by Jessa Claeys
Since New Hampshire is one of the few states that doesn’t charge a state sales tax on the purchase of a new or used car, vehicle owners pay an annual excise tax of $18 per $1,000 of the vehicle’s list price.
Whether thinking about your property or goods and services, figuring out tax rates can be confusing. But, as most people know, not paying your taxes can land you in serious trouble. While some states charge sales tax on purchasing a new or used car, New Hampshire isn’t one of them. That doesn’t mean you’re completely off the hook, though.
Read on for the details of New Hampshire’s excise tax. Learn what excise tax is, how to calculate your tax payment, and what the penalties are if you don’t pay.
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What is an excise tax in New Hampshire?
New Hampshire is one of the few states that doesn’t charge
car sales tax
at the time of purchase. But if you’ve bought a new or used vehicle, you will be required to pay a yearly tax equal to a certain percentage of your vehicle's list price. An excise tax is required on specific goods or services such as fuel, tobacco, alcohol, and yes, even cars. It is generally levied against goods that pose some sort of health or environmental threat. In general, businesses pay excise taxes, which indirectly increase consumer prices.
Navigating the New Hampshire government websites to determine the annual vehicle excise tax rate is tricky, so we’ll break down what you need to know to save you the hassle.
There are two fees that vehicle owners are required to pay:
- The local fee is a personal property tax and is based on the original list price of the vehicle.
- The annual tax is $18 per $1,000 of the list price. This rate will drop annually in $3 increments to $15, $12, $9, $6, and finally $3.
New Hampshire drivers are required to pay a registration fee and a title fee on the sale or transfer of cars and motorcycles, as well. Payment should be submitted directly to the New Hampshire Department of Transportation, and you should receive documentation (registration and title papers) as proof the fees were paid.
For more details on the registration process, visit the
New Hampshire Division of Motor Vehicles
(NH DMV) website.Calculating your excise tax payment
If you’re curious about how much your excise tax will be, check out the table below to calculate your annual tax rate.
Year you bought your vehicle | Annual car tax rate |
|---|---|
Year before the model year (ex., a 2023 model purchased in 2022) | $18/$1,000 of the list price |
Model year | $15/$1,000 of the list price |
Second year after model year | $12/$1,000 of the list price |
Third year after model year | $9/$1,000 of the list price |
Fourth year after model year | $6/$1,000 of the list price |
Fifth year and all succeeding years | $3/$1,000 of the list price |
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For example, if you purchased a 2022
Honda Civic Sport
with an original MSRP $25,045, the excise tax rate will be $18/$1,000 of the vehicle’s list price, equating to roughly $450. The following year after a tax rate decrease, you would be paying approximately $375. The rate would continue to decrease until you reach a maximum of $3/$1,000 of the list price.Penalties for nonpayment
Just like fees for registering your vehicle, not paying your annual car tax in New Hampshire might lead to severe penalties. The information on penalties isn't readily available, but failing to pay the required excise tax could result in issues renewing your vehicle registration or driver's license.
MORE: Transfer title New Hampshire
How to avoid excise tax in New Hampshire
In most cases, getting out of paying vehicle taxes in New Hampshire is a no-go, but there are some situations where you may be able to deduct your NH excise taxes.
Unlike
New Hampshire Sales Tax
, you can’t generally deduct excise tax on your state income tax return or federal tax return, but the IRS will occasionally allow specific excise taxes to be deducted for certain tax years. New Hampshire sales and excise taxes on vehicles bought in 2009 can be deducted once from your federal tax return. If your vehicle was purchased during any other year, you cannot deduct it.“UsingJerryis a super straightforward process, and at each step, you can see exactly what coverage you’re paying for. Thanks to Jerry, I’m paying $900 less each year while keeping full coverage for my new car!” —Martin H.
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