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Author Topic: Business Profits Tax!  (Read 508 times)

Mr. Magniloquent

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Business Profits Tax!
« on: December 03, 2016, 03:16:00 am »

Greetings,

Within the last 6 months I announced that I had committed to relocating the NH within about a year. I've recently begun doing heavy research--in this case, taxation. I knew about the 5% interest and dividends tax. I don't like it, it hurts me, but I can cope with it. Very high property taxes has been a major irk for me, but I rationalize it with no income and no sales tax. It's a big deal, but can be mitigated. I have to ask though, what is going on with the Business Enterprise Tax and Business Profits Taxes?

I have to pay a tax on what I pay my employees? Ideology aside, the sum seems trivial at a rate of 0.75%, but these sort of taxes never stay small forever. Far more alarming is the Business Profits Tax. The tax rate is 8.2%! Here I was thinking New Hampshire was great in not having an income tax, but it appears that if you own a business--you do! That's a very startling discovery for me, and gives me serious reservations. One of my major motivations for relocating was to lower my extortion rate. First a property tax rate that was likely to double or triple, now an income tax on businesses of 8.2%? Major problem.

It doesn't look like there is any real way to mitigate this burden. Is there a business owner here with some knowledge/experience on the matter? My effective tax rate could actually increase relative to my current residence. It would be difficult for me to rationalize fleeing my current yoke for liberty, only to don a heavier one. This, very seriously, could be a deal breaker for me.
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danhynes

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Re: Business Profits Tax!
« Reply #1 on: December 03, 2016, 11:02:28 am »

BPT (business profits tax) does not usually hurt small businesses as much as large ones. For example, I run a small business. The business makes around $200,000 a year, however, my employees salaries (including my own) pretty much take all the profit. You are allowed to give yourself a reasonable salary and most business owners choose to give themselves a salary of whatever the remaining profit is. (As NH Has no income tax you are not going to get taxed on that salary at the state level) So, in a practical sense, you usually won't see any taxable profits. Now if you are completely uninvolved in the business and do nothing it could be hard to claim a large salary.
The BET, business enterprise tax, is a small number, .075% I believe. They tax the total profit of the business so that you cannot deduct salaries. Its intended purpose is so that people don't deduct the entire profit.
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