New Hampshire Economy: No Sales Tax and the Boston Halo

New Hampshire is a smaller state economy, usually ranked in the lower-middle of U.S. states by GDP — the dollar value of everything a place makes and sells in a year. The New Hampshire economy benefits from no state sales tax, no broad income tax on wages, and proximity to the Boston metro area, with manufacturing, healthcare, finance, and tourism all playing significant roles.

This is a plain-English tour. For the national picture, see The State of the U.S. Economy and the Economy hub.

How big is the New Hampshire economy?

For example, recent state GDP for New Hampshire has run around $115 billion, according to the Bureau of Economic Analysis. Population is roughly 1.4 million, per the U.S. Census Bureau. Manchester, Nashua, the seacoast around Portsmouth, and the Lakes Region anchor the main regional economies.

The biggest industries

New Hampshire's industry mix is more diversified than its small size suggests. The main pillars are:

• Advanced manufacturing — defense electronics (BAE Systems in Nashua), medical devices, precision metalworking, and aerospace components are all important.
• Healthcare — Dartmouth Health, based in Lebanon, and large hospital systems in Manchester and Portsmouth are major employers.
• Finance and insurance — Liberty Mutual and Fidelity have major operations in southern New Hampshire, drawing on the Boston metro labor market.
• Higher education — Dartmouth College, the University of New Hampshire, and Southern New Hampshire University (one of the largest U.S. online universities) are anchor employers.
• Tourism — White Mountains skiing and hiking, Lake Winnipesaukee, the seacoast, and fall foliage tourism are all significant.
• Retail — the lack of a state sales tax draws cross-border shoppers from Massachusetts, Vermont, and Maine, supporting big-box and outlet retail clusters.

Jobs and wages

New Hampshire labor data is published by New Hampshire Employment Security, with national-level numbers from the Bureau of Labor Statistics. For example, the New Hampshire unemployment rate has consistently been among the lowest in the country, often well below the national average.

The New Hampshire minimum wage is tied to the federal floor of $7.25 per hour. Tight labor markets and proximity to Massachusetts (where the minimum wage is much higher) mean very few jobs actually pay the federal floor.

Taxes in New Hampshire

New Hampshire has no broad state income tax on wages and no state sales tax. The state has historically taxed interest and dividend income, but that tax has been phased out as of the 2025 tax year.

State revenue relies more heavily on property taxes, business taxes (the Business Profits Tax and Business Enterprise Tax), and a rooms and meals tax. Property tax bills are among the highest in the country in dollar terms. State tax forms and rules live at the New Hampshire Department of Revenue Administration. You can read more about how sales tax works in our glossary.

Cost of living

Cost of living in New Hampshire is above the national average, especially in the southern tier near Boston. Housing costs in Manchester, Nashua, and Portsmouth have risen sharply in recent years. The federal government tracks region-specific Consumer Price Index data through the BLS New England region, and HUD publishes Fair Market Rents for every county at HUD User.

The Boston halo

Southern New Hampshire — especially Hillsborough and Rockingham counties — functions as a northern extension of the Boston metro area. Many residents commute south for higher Boston-area wages while paying lower (and income-tax-free) New Hampshire taxes. This dynamic has shaped where companies, housing, and retail concentrate, and it makes the southern tier of the state much more economically active than the rural north.

The North Country and the lakes

Northern New Hampshire — Coos County and the White Mountain region — has a smaller, more tourism-and-resource-driven economy. Paper mills that once anchored the region have largely closed, and the area now depends more on outdoor tourism, ski resorts, and a small base of light manufacturing.

No-sales-tax retail

The lack of a state sales tax is a long-standing draw for cross-border shoppers from Massachusetts and Vermont. Outlet malls in Tilton and North Conway, big-box retail along the Massachusetts border, and state-run liquor stores at major highway interchanges all benefit from the cross-border traffic. The state-run liquor stores in particular generate significant revenue for the New Hampshire general fund.

How does the New Hampshire economy fit into the national picture?

New Hampshire is one of the most tax-policy-distinctive state economies, with no broad income tax and no sales tax, but unusually high property taxes. Its small size and proximity to Boston make labor flows, housing, and infrastructure investments especially sensitive to what happens in Massachusetts.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and the New Hampshire Department of Revenue Administration for the most current data.