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One of the hallmarks of New Hampshire government is its insistence on maintaining low personal and business tax burdens. To that end, there’s no broad-based standard income, sales or estate tax. Inventory, capital gains, and professional services are also tax-free.Unlike other New England states, however, New Hampshire maintains two major business taxes. The first to be instituted was the Business Profits Tax (BPT). But since the bulk of the state’s businesses range from the small-to-very-small, larger firms complained they were shouldering the bulk of the tax burden. So 1993, the Legislature instituted the Business Enterprise Tax (BET). As Jennifer Weiner writes in “How Does New Hampshire Do It?,” a report released by the Boston Federal Reserve, the BET taxes “wages and salaries, interests and dividends paid by businesses.” In other words, it is, technically, an income tax, but the burden’s placed on businesses, rather than individuals. At 0.75 percent, the BET is also a lower rate than a standard state income tax.The other major piece of New Hampshire’s revenue pie is property tax. Residents pay both a state and town property tax. In 2010, Kiplinger’s reports the State Education Income Tax was “$2.35…per $1,000 of total equalized valuation.” Town rates, meanwhile, can vary widely across the state. If you don’t combine New Hampshire’s two business taxes, property tax makes up the largest slice of revenue, at 16 percent.Another notable aspect of New Hampshire’s tax system, as Weiner notes in the Boston Fed report, is that it’s highly diversified. No one tax makes up 20 percent of money coming in. Other major state taxes include Meals and Rooms, Tobacco, Liquor Sales and Distribution, Real Estate Transfer, Interest and Dividends, Insurance Premium, Communications, and Utility Property Taxes.Summary provided by StateImpact NH

Pay Your Taxes: A Cautionary Tale

Young Buck, 2004
Young Buck, 2004

When IRS agents raided the house of rapper Young Buck, they seized all his things: his white leather dining chairs, his watches, his craps table, his tattoo kit. Even his refrigerator. The Nashville artist, who was once part of 50 Cent's G-Unit, owed hundreds of thousands of dollars in back taxes.

His lawyer, Robin Mitchell Joyce, said he thought Young Buck's taxes were being handled by his business manager. They weren't.

I went to another business manager to see what might have gone awry-- Horace Madison, who manages music moguls like Lil Wayne. "This is not a hip hop thing," he points out. "This is a music industry thing."

Musicians, unlike most people, don't get a regular paycheck, with taxes withheld for them. "Most entertainers and musicians receive their money on a gross level, with no taxes taken out."

Big stars can earn more than a million dollars in a couple of months. But they have a lot of expenses — lights, stage, tour bus, entourage.

And after expenses, of course, there's taxes. Every quarter. Madison says that if you made a half a million dollars in 3 months, "You need to make an estimated tax payment of $200,000."

On top of that, if you're an entertainer, what qualifies as a business expense can seem really murky. Your whole lifestyle is not tax deductible.

Madison has tried to deduct watches, arguing that it's a necessary business expense for his client to have a certain look. The CPAs at his company threw it back.

The IRS loaned Young Buck his refrigerator back, along with a few other things. But most of his stuff is still stored in an undisclosed location. His music catalog is up for sale on May 14. Even the rights to the name "Young Buck" might be sold.

Many musicians have been in his situation. After Willie Nelson's home was raided by the IRS 20 years ago, Nelson made an album called "The IRS tapes." He paid back some of the debt that way.

For More: Listen to our playlist of musicians who didn't pay their taxes.

NPR researchers JoElla Straley and Barbie Keiser contributed to this report.

Copyright 2021 NPR. To see more, visit https://www.npr.org.