New Hampshire Gambling Tax Laws
With the introduction of sports betting in New Hampshire, the topic of taxation will be on many people’s minds.
There are two ways in which the NH legislation differs from other states that offer regulated sports betting.
First, there isn’t a hard-coded taxation rate in bill H 480. Second, there aren’t any state gambling taxes for individuals.
A state tax was tried, leading to many NH lottery players crossing state lines for their weekly tickets.
This page covers taxes on gambling in New Hampshire in detail. It includes sports betting, lottery winnings and how wins in the Granite State apply to nonresidents.
New Hampshire: No state gambling taxes
If you win big on sports betting, you’ll need to pay federal taxes. Fortunately for New Hampshire residents, state taxation isn’t added.
The only state gambling tax was abandoned in 2011, which was a 10% rate that was introduced in 2009. At that time, there wasn’t online sports betting, though horse race betting and lottery draws were allowed.
The effect of this tax was that a lot of people traveled to other states to gamble.
With Tri-State Lottery draws available, tickets from across state lines became a better value. Instead of increasing the revenue from gambling in NH, this tax had the effect of significantly reducing it.
Tax on online sportsbooks
In many states, a licensing fee and tax rate are specified in the legislation regulating sports betting. However, New Hampshire went a different route. Instead of a fixed tax rate, it is flexible.
Licensing of the books is based on their contribution to state coffers and among other things. This process is not public, meaning that the range of rates will not be known until the licenses are awarded.
So, this could include a tax on profits, an initial licensing fee and renewal fee for those licenses. These fees will apply to both retail and online sportsbooks.
Federal gambling taxes in New Hampshire
Online sports betting means that records will be kept of everyone’s wins and losses.
You’ll need to file these on your tax return. If you win more than $5,000, then you will be issued with form WG-2. A copy of this sent to the IRS, so any big wins must be filed.
In some states, wins are given with “withholding tax” applied, which removes 28% from your winnings right away, though it does take away the need to file.
Currently, the federal gambling tax is 25%. There is one silver lining to this; you can deduct losses. These need to be documented carefully, as you need to itemize each loss.
Again, online betting will make it easier to keep track of your bets and their outcomes during each tax year.
What forms of gambling are taxed in New Hampshire?
Currently, there are several forms of gambling legal in NH:
- Sports Betting: This is the latest form of gambling to be legalized, with five retail and 10 mobile sportsbooks available for betting on pro and college sports.
- Lottery: New Hampshire was the first state on the content to have a lottery, which now includes Tri-State Lottery and Multi-State Lottery draws.
- Horse Betting: While there isn’t any live or simulcast racing in New Hampshire, you can bet on races from across the country on online horse racing betting sites.
- Daily Fantasy Sports: Picks style contests for real money, or DFS, was formally legalized in 2016. Both of the leading brands (DraftKings and FanDuel) also operate full online sportsbooks.
No state taxes on gambling in New Hampshire
While New Hampshire does not tax residents on gambling wins, federal taxes still apply.
As a result, new online gambling sites will need to comply with the standard rules, including issuing WG-2 forms for bigger wins. Those forms, and the easy access to win-loss information that online gambling provides, means that you’ll need to declare winnings on your federal tax returns.
It is possible to offset losses, though to do this, you will need to ensure you have accurate records.