Financial & Other Incentives
When it comes to expanding or relocating your business, the state you choose makes a critical difference to your future bottom line. New Hampshire offers a wide variety of financial and other incentives that make the state a great place for business including
Low Tax Burden
New Hampshire ranks seventh among the best states in terms of business-tax climate according to the US Tax Foundation 2013 report.
Taxes DO make a difference to a company.
Other states in the Northeast offer financial incentives in the form of cash payments for new employment, tax reimbursement programs, tax credits and/or temporary reduction in corporate income taxes. This draws attention away from the true bottom line: These states are simply trying to temporarily defer the pain of their high taxes. At some point your business will have to pay for the incentive programs they offer you.
Consider this fact: The more people and businesses that rely on government subsidies, the larger government grows; and the larger government grows, the more taxes needed to sustain this growth—and it's the business community that usually ends up paying for a higher proportional share of new or higher taxes.
There is also a temptation during these difficult economic times for states to increase taxes as a way to cover the cost of state deficits. New Hampshire has not fallen into this trap. Instead of creating new taxes or increasing taxes or subsidies, New Hampshire has cut spending to balance the budget.
The philosophy in New Hampshire is different: Stay lean and allow businesses to keep more of their hard-earned money, thanks to:
- No broad base personal income tax
- No sales tax
- No use tax
- No inventory tax
- No capital gains tax
- No estate tax
- No internet tax
- No professional service tax
- Low corporate income tax
Tax & Other Credit Programs
Economic Revitalization Zone Tax Credits: In an effort to encourage revitalization and create jobs, communities and employers may take advantage of New Hampshire's Economic Revitalization Zone Tax Credits (ERZ Tax Credit) Program.
Economic Revitalization Zone Tax Credits, which is a short-term, tax credit against the business profits and enterprise taxes. To qualify, a certain amount of capital investment must be made and the location must meet certain demographic criteria, or be in an unused or underutilized industrial park, or vacant land, or structures previously used for industrial, commercial, or retail purposes but currently not so used, or Brownfield site. The total amount of the credit is $200,000 over five years.
It is a two-step process, whereby the municipality first applies for the designation based upon specific criteria, and secondly, a business applies for the actual tax credit. Municipalities that would like to designate a specific location as an Economic Revitalization Zone should complete Form ERZ-1 and businesses interested in applying for the ERZ Tax Credit must complete Form ERZ-2. To see where projects are eligible to apply for the credit, download the current list of Economic Revitalization Zones throughout the state.
For more information on the ERZ Tax Credit please see our FAQs.
Coos County Job Creation Tax Credit: This is a tax credit to businesses hiring new employees in Coos County and paying wages equal to or above 200 percent the calendar year minimum wage. The credit is $1,000 for any new, full-time, year-round jobs applied to the Business Enterprise Tax, but any unused portion of the credit can be applied to the Business Profits Tax. More information can be found on the NH Department of Revenue Administration website.
Research and Development Credit: During the 2007 session, the Legislature enacted a research and development credit against business taxes paid to the state of New Hampshire. Under the 2007 Laws of New Hampshire, Chap. 271, the Legislature has designated $1,000,000 for each of the next 5 fiscal years to be available to fund the credit.
Business organizations that have expenditures made during the fiscal year for qualified manufacturing research and development. "Qualified manufacturing research and development" expenditures are wages paid to employees of the business organization for services rendered in New Hampshire which qualify and are reported as a credit by the business organization under section 41 of the Internal Revenue Code. More specifically, "qualified manufacturing research and development" expenditures are the wage amounts attributable to New Hampshire that make up lines 5, 24, or 49 of the business organization's Federal Form 6765. More information can be found on the NH Department of Revenue Administration website.
Grants, Loans & Other Programs
Community Development Block Grant: This assistance can be in the form of a grant to the municipality for a public infrastructure improvements on behalf of an expanding business or a loan to the business itself. The maximum amount of funding available for any given project is $500,000, regardless of size of the community applying for the grant. All grants are one-year duration, and one job must be created for each $20,000 in CDBG funds granted. The key to this federal program is that a minimum of 60% of the jobs created must be filled by low and moderate-income persons. More information can be found on the NH Community Development Finance Authority website.
Job Training Fund: Talent development is a major component of New Hampshire's economic vitality, and businesses large and small realize the importance of a skilled and educated workforce. That's why the New Hampshire Job Training Fund was created, and we hope your company is able to take advantage of this matching grant program designed to enhance worker skills and help you stay competitive in the global marketplace.
A minimum of 50 percent cash match is required. Ineligible matching funds include salaries, wages bonuses and benefits of employees in training; in-kind contributions; administrative or entertainment expenses; and costs resulting from violations of, or failure to comply with federal, state or local laws and regulations. Download a Job Training Fund fact sheet.
Industrial Revenue Bonds: This program is only for companies that manufacture or produce tangible personal property in New Hampshire. At least 75% of bond proceeds must be spent on core manufacturing space and equipment. Storage, office and R&D space must be excluded from this calculation. To be cost effective, loans must be between $1.5 and $10 million. The interest rate is about 70% of prime and can be used for the purchase of land, buildings, and capital equipment.
- Loan Guarantees: For companies that need credit enhancement, the State offers the Capital Access Program, Working Capital Line of Credit Guarantee, and Guarantee Asset Program.
- Import/Export Loans: The State also offers Foreign Buyer Credit, Export-Import Bank of the United States and other sources.
- SBA 504 Program: This loan program is designed to work in conjunction with commercial banks to provide 90% long-term, fixed-rate financing for small to medium-sized businesses in owner occupied buildings that provide employment opportunities.
Business Assistance Services
Federal Contract Procurement: The Procurement Technical Assistance Program (PTAP) is sponsored by the State of New Hampshire Business Resource Center and the Defense Logistics Agency. This national program provides specialized and professional assistance to individuals and businesses seeking to learn about contracting and subcontracting opportunities with Department of Defense (DOD), other federal agencies, or state and local governments.
Energy Efficiency and Renewable Energy
New Hampshire offers a number of State, Federal, and utility funded programs to assist business with energy efficiency and renewable energy (EE&RE). NH Division of Economic Development's Business Energy Manager is available to guide your firm by providing:
- technical assistance to maximize the available EE&RE benefits that match your firm's needs.
- options for arranging for energy audits to identify ways to minimize energy expenses.
- referrals to grants and financing to make EE&RE investments a cost-effective reality.
Assistance in Starting a Small Business: The New Hampshire Small Business Development Center offers free, one-on-one, confidential business counseling, low cost training programs, and access to information and referral. Specialized services include environmental counseling, manufacturing assistance, international trade programs, and innovative economic development initiatives.
Manufacturing Consulting: The New Hampshire Manufacturing Extension Partnership (MEP) provides low cost consulting services, including lean and agile supply chain management, product development, technology transfer and commercialization; quality management, including compliance with ISO 9000/14000 certification requirements; information technology (IT) management; plant layout, equipment specification, and health, safety, energy and environmental issues.
For additional information on incentive programs, real estate surveys, wage/benefit data, tax comparisons by state, and information about why New Hampshire is the right place for your company, contact Michael Bergeron or Cindy Harrington of the New Hampshire Business Resource Center (603) 271-2591 or 1-800-417-4110. Note: We keep all contacts confidential.
New Hampshire's state motto, "Live free or die," represents the state's Puritan minded roots that exemplify independence, frugality, and industry. Freedom is the essence of economic independence and New Hampshire is the best state in the U.S. to keep this independence and grow your company. We look forward to your call.