The True Cost of Interest and Dividends Tax Repeal to The Vast Majority of Granite State Residents.
Governor Ayotte in 2025 announced her state budget proposal. Even though she stated that her budget was being done “with a scalpel, not a shovel” you can see below how the state’s political leaders passed a bill that favors the few and YOU the many will have to make up the difference. The interest and dividends tax had existed for 100 years, until a bill removing Interest and Dividends was signed into law by the previous Governor John Sununu.
Total revenue from the Interest and Dividends Tax was $147.3 million during fiscal 2023 and $184.3 million in fiscal 2024, according to unaudited figures from the Department of Administrative Services. Keep in mind that the $147.3 million was taxed at 4% for 2023 and the $184.3 million was taxed at 3% for 2024, and that was the phasing out amounts, NOT the 5% tax that was paid prior to this bill being passed, and starting in 2025 it is zero. Based on these numbers $307 million is what NH would have received in 2024, a loss of $123 million in 2024, and $184 million in 2023, a loss of $37 million if taxed at the long-held rate of 5%. Moving forward NH could see a shortfall of $200-250 million a year if interest and dividends fall which all residents will see in HIGHER REAL ESTATE TAXES and LESS SERVICES, mainly impacting the people who most need help. 2025 appears to be similar to 2024, meaning a loss off an additional 300 million dollars. That means a total of 460 million dollars since the phasing out started in 2023, of this income to the state. If we can look at current interest rates staying high, and the dividend paying companies continuing to do well in 2026, and make a conservative estimate, we could see an additional 250-300 million dollars lost in 2026. That would be 710-760 million dollars lost since phasing out in 2023 began.
Realize that the vast majority of NH citizens have not ever paid this tax. Read link/article: https://newhampshirebulletin.com/2024/10/30/new-hampshires-interest-and-dividends-tax-and-why-its-a-hot-campaign-issue-explained/
This link provides the breakdown of who paid this tax and you will see that the 7.8% wealthiest filers paid this tax, meaning that 92+% of filers paid nothing in 2021. Why not ask your state representatives why they would support such a bill that favors the citizens most capable of making this contribution. The result less services and more tax burden sent back to the towns and cities of the state. I am sure they will give a stock answer that these wealthiest of NH residents will leave the state without us removing this 100-year-old tax.
But NH is already one of the least income tax-based states in the country.