Special legislative session approved

Sununu vows to protect N.H. businesses from SCOTUS internet sales tax ruling

Staff photo by DAMIEN FISHER Gov. Chris Sununu speaks during a Wednesday meeting of the state Executive Council at Crotched Mountain Rehabilitation facility in Greenfield.

GREENFIELD – On Wednesday, Gov. Chris Sununu got the Executive Council to call a special legislative session to determine a response to a U.S. Supreme Court ruling that could force New Hampshire businesses to collect internet sales taxes for other states.

“The Supreme Court got this one wrong and we’re going to make sure our businesses are protected,” Sununu said.

Sununu got four “yes” votes at the council meeting, held at the Crotched Mountain Rehabilitation facility in Greenfield, part of the traveling series of council meetings. Crotched Mountain provides services for children and adults with disabilities.

The lone dissenter, Andru Volinsky, D-District 2, expressed concern that New Hampshire is rushing into the fray before it knows what to expect from other states’ taxing regimes. He said this could leave Granite State businesses legally vulnerable.

“There is no real direct need to do special session before other states act, and we have a fuller understanding of what to react to,” Volinsky said.

However, Sununu said now is the time to act, to keep New Hampshire businesses from becoming liable for tax payments to other states, as is likely to happen under the South Dakota v. WayFair Inc., ruling issued late last month by the U.S. Supreme Court. The court ruled that online businesses can be compelled to collect sales taxes by states, even when those businesses do not have a physical presence in that state. This ruling overturns the 1992 ruling in the Quill Corp. v. North Dakota, which had said that Constitution bars states from requiring businesses to collect sales taxes unless they have a substantial connection to the state.

Sununu believes the ruling will force New Hampshire businesses that sell goods and services via the internet to collect and pay taxes to states and other jurisdictions. The New Hampshire push back against this ruling is being watched by other states, and by companies around the country, he said.

“This is about 10,000 other taxing jurisdictions that would have the opportunity to come in here and demand that our businesses become their tax collectors,” Sununu said. “That is not the New Hampshire way. It is absolutely not right, and we’re going to fight it with every means that we have.”

Sununu said legislators will set up a task force to solicit input from members of the public, as well as business leaders and legal experts to craft laws that will protect New Hampshire businesses.

“We want to make sure New Hampshire’s advantage is being maintained,” Sununu said.

Legislators must return to Concord no later than Aug. 15 for a one-day session to vote on the proposed laws.

Damien Fisher can be reached at 594-1245 or dfisher@nashuatelegraph.com or @Telegraph_DF.