Across the Nation

Living in New Hampshire Is Easy to Love: Why One Woman Calls the Granite State Home

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Living in New Hampshire is mostly free of income taxes: The state only taxes income from dividends and interest. However, more than 106,000 of New Hampshire’s residents work in neighboring states, requiring them to pay taxes where taxes are due. These commuting individuals bring much of the money they earn home rather than spending it elsewhere. What the state loses in untaxed income, it gains through interest and dividend income.

The Commuter Life

Erin Bean is a lifelong resident of New Hampshire. However, she’s spent a lot of time in neighboring and nearby states to attend college and visit family and friends, sometimes on a daily basis. She was born in a hospital in Massachusetts and raised in Newton, New Hampshire.

“Growing up, the road we lived on went into Massachusetts,” she says. “It was only a mile from the border.”

In 2008, Erin graduated from Wilson College in Chambersburg, Pennsylvania, where she studied veterinary technology. In the same year, she married her husband, Chris Bean. The two now reside in Danville, New Hampshire, with their two young children. Chris commutes daily to work in Massachusetts, which, according to Erin, is only about a 20-minute drive away.

Despite this pattern of employment migration, “How Money Walks” reveals that New Hampshire gained more than $3 billion in wealth from Massachusetts between 1993 and 2011.

For Americans who work in Massachusetts but live in neighboring New York instead of New Hampshire, taxes have a much higher impact on their lifestyle and well-being. When you follow the money, New Hampshire gained $393 million in wealth from New York from 1992 to 2011.

As businesses move into the New England state, residents’ desire to leave it for work may decline, leaving states such as New York and Massachusetts empty-handed.

Less Tax Revenue, More Jobs and Business Revenue

The numbers speak volumes. New Hampshire’s income tax–free business model has helped the country achieve one of the lowest unemployment rates in the country—4.4 percent in July 2014, as opposed to 6.2 percent nationwide. The state’s private sector jobs have grown by 5.4 percent.

While both Massachusetts and New York offer credits to offset double taxation, neither state has a dollar-for-dollar credit, because of their different tax plans and rates. Residents of New Hampshire don’t have to worry about double taxation and are free to spend their extra income in area shops, where purchases aren’t taxed (New Hampshire is one of five states without sales tax), or on investments, which are taxed.

Location Is Everything

Erin lives in the tri-state corridor of Massachusetts, Maine, and New Hampshire, a hub for commuters who work in the Boston area. “We are only an hour from Boston,” she says. “That’s the reason we have so many Massachusetts transplants in this area.”

Erin is also an hour’s drive from Maine, providing her with many opportunities for business and leisure, despite living in a smaller state. “It’s great being from where I am,” she says.

Family visits are a breeze for Erin. Her father and one of her older brothers live in Boston, and her other brother lives in South Berwick, Maine, with his family—all within easy reach.

New Hampshire’s zero income and corporate taxes draw new businesses and new residents; meanwhile, the lack of a general sales tax brings in consumers, a process that makes everyone happy. Erin wants to return to work when her children are older and continue living in New Hampshire while doing so. The state’s current growth is a positive sign that jobs will be waiting for her when she’s ready to return to a full-time career.