Deciding to start a business in New Hampshire is a major step forward for your career. With the opportunity to create a business from scratch and strive for practically unlimited income, there’s much to be excited about. But before you get too excited, there are some important steps you need to take for your business. New Hampshire’s economic growth rate is faster than the national average, growing at a rate of 4.4 percent, compared to the national average of 3.4 percent. Considering its growth rate was 1.6 back in 2016, it seems to be on a powerful upward trajectory. Small businesses are disproportionately responsible for the state’s economic health, collectively responsible for 6,747 net new jobs in 2018 alone. Metropolitan areas around Manchester, Nashua, Concord, and Portsmouth are ideal opportunities for new entrepreneurs. Learn more about state and federal requirements below.
Steps to Obtaining a Tax ID (EIN) Number and Registering a New Hampshire Business
- Forming a Business in New Hampshire
- Federal Tax ID (EIN) Number Obtainment
- New Hampshire State Tax ID Number
- Localized Licenses and Permits in New Hampshire
Your first step in deciding how to structure your New Hampshire business is to figure out which entity type/business structure is best fit for your business goals. There are several options to choose from, including sole proprietorships, partnerships, limited liability companies (LLCs), and corporations, and many motivations you can follow to make the right decision.
New business owners gravitate toward businesses that are simpler to set up and manage. Sole proprietorships and partnerships are ideal here, though LLCs aren’t too crazy. The main difference between sole proprietorships and partnerships is the number of owners involved. Corporations are more complex to start and manage, mostly because they’re responsible for adhering to more laws and restrictions. However, these are necessary because corporations can be publicly traded, raising funds by issuing shares.
You may also consider the tax advantages of each business – Sole proprietorships and partnerships are simple, once again, because you’ll owe taxes as an individual on any money you make in the business. LLCs are considered pass-through entities, which means they don’t pay taxes on their income, but you’ll pay taxes on any money you make via salary or withdrawn profits. Corporations must pay taxes on all eligible income, and individuals must pay taxes on any money they make via salary or withdrawn profits (like in an LLC), resulting in a kind of double taxation. In New Hampshire, the corporate tax rate is now 7.9 percent, provided a handful of restrictions are met. However, organizations with less than $50,000 of gross receipts in the state are not required to file a return.
Then, you’ll need to consider liability – In sole proprietorships and partnerships, you’ll be exposed to significant liability; you could be held legally responsible for all your business actions, and you’ll take on any business debts personally. LLCs provide some degree of liability protection because they serve as separate legal entities. They can take on debts of their own, and can be held responsible for business actions. Corporations provide even more liability protection, and can similarly act as legally independent entities.
Consider all these areas when deciding what structure to apply to your New Hampshire business.
Your New Hampshire business will most likely need a federal tax ID number. This is a 9-digit, unique identifying number similar to a social security number, but for businesses. Sometimes called an employer identification number (EIN), this number is given to your business when you register it with the federal government.
You’ll need this number if your business plans on hiring employees, or if your business has multiple members (as is the case with partnerships, LLCs, and corporations). You’ll also need an EIN if you’re going to open a business bank account, build business credit, or seek a loan. You’ll need one to apply for business licenses and permits as well. Your business will benefit from getting your federal tax ID number as quickly as possible, so make use of our federal tax ID number obtainment services. Fill out an online application, answering a few key questions about your business, and you’ll get your federal tax ID number via email in an hour or less.
Your business may also need a New Hampshire state tax ID number. Typically, state tax ID numbers are provided for state-level sales tax purposes. However, New Hampshire is one of a few states that don’t have a state-level sales tax. Instead, you may need a New Hampshire state tax ID if you’re hiring employees in the state, or if you owe specific excise taxes on regulated goods.
You’ll need a federal tax ID number before you can get a New Hampshire state tax ID number. When you’re ready, use our state tax ID number obtainment services to make things simple. Answer a few questions about your business, and you’ll get your New Hampshire state tax ID in just 4 to 6 weeks.
Business licenses and permits aren’t necessarily straightforward in New Hampshire. There isn’t a catch-all business license you can get for any company, nor is there a single, state-level agency that handles the regulation and distribution of licenses and permits. Instead, you’ll find varying rules at both the state and local level for many different industries and many different departments responsible for distributing them. Because these rules can be so different, you’re advised to contact your local Chamber of Commerce for more information about the forms of documentation your business will need to operate in a given area. Keep in mind you’ll need your federal tax ID number before you can apply for any of these licenses and permits.
New Hampshire is a small state, but it has a thriving economy. There are 133,676 small businesses in the state of New Hampshire, which represent 99 percent of all businesses in the state. Cumulatively, they’re responsible for employing more than half of the state’s workforce, or more than 291,000 people.
Use our federal tax ID number and New Hampshire state tax ID number obtainment services to get your tax IDs as quickly and efficiently as possible. A simple online application is all you’ll need to fill out.