Quote:
Originally Posted by songkrai
All of those who work in a neighboring state do have to file and pay income taxes to the neighboring state.
This is all lost revenue for New Hampshire. How many people live in NH and pay income taxes in MA, VT, and ME is not easy to calculate. Nor is the amount of revenue lost by New Hampshire to those neighboring states.
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If NH ever set up an income tax, I'm pretty sure New Hampshire wouldn't be able to collect income tax if the income is from a neighboring state unless the NH tax was higher. For example, my MA income is taxed at (rounded) 5%. NH would be entitled to collect taxes on my income only if their tax rate is above that 5%. This is similar to how Massachusetts sets up their tax returns - you get a credit for any tax paid to the state where the income was earned.