New Hampshire Senate Gives Nod to Income Tax

CONCORD, N.H. — The New Hampshire Senate voted on Thursday to impose the first-ever income tax in this state, known since Colonial times as an anti-tax haven.

Revenues from the 3.5% personal income tax would be used to fund education. The bill also includes a statewide property tax of $5 per $1,000 assessed value. Combined, the package is expected to raise about $826 million.

The measure, passed 15-9 by the state Senate, goes to the state House of Representatives today.

With its famous motto, “Live free or die,” New Hampshire has been one of only three states that do not have either a statewide income or property tax. The others are Texas and Alaska.

New Hampshire Gov. Jeanne Shaheen, a Democrat who pledged not to raise taxes, has vowed to veto any income tax bill.

The Legislature and Shaheen are under pressure to find an alternative way of funding education. The New England state’s highest court ruled in late 1997 that the present method of funding education, based on local property taxes, was unconstitutional.