New Hampshire is one of just five states that do not have a sales tax, so you're in luck when you need to purchase a vehicle. As long as you are a resident of New Hampshire, you won't need to pay sales tax on the purchase of your car, even when you go to register it. However, if you live in neighboring Vermont, Maine or Massachusetts, you cannot simply go to New Hampshire to buy a car to avoid paying sales tax. This is tax evasion, and authorities are cracking down on those who attempt it.
Non-Residents Vehicle Registration
While non-residents of New Hampshire can purchase a car there and pay no sales tax at the time they buy it, they will owe taxes on the vehicle when they go to register it in their state of residence — unless they live in another state with no sales tax. The only way to avoid this is to register the car in New Hampshire. For residents of the state, this poses no problem. However, the only way non-residents can register a vehicle in New Hampshire is if it is garaged solely in the state, and with the approval of the town or city clerk. Keep in mind, being garaged solely in the state means the state in which the car is housed when it's not on the road. In most cases, this will be your home.
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Planning to Move?
When you know you're planning to move out of New Hampshire and are thinking of buying a car, it's best to do so at least 90 days or more before moving. This way, when you go to register the car in your new home state, you won't be under suspicion of tax evasion. If you plan ahead before moving, you can purchase your car in New Hampshire without fear of avoiding taxes in your new state. Check with the Department or Division of Motor Vehicles in the state you're moving to and ask how long you have before the vehicle needs to be registered in that state, as requirements vary.
Exemptions from Sales Tax
There are some circumstances when you will not have to pay any sales tax on the purchase of a vehicle, regardless of where you live. Such examples are vehicles that were built before 1973 as well as vehicles used in the forestry, horticulture or agriculture industries. Also, if you're disabled, you do not have to pay taxes when you buy a car.