Officials continue fighting internet sales tax
NASHUA – California and Massachusetts are just two of the 46 states for which some New Hampshire businesses will have to collect sales taxes after a summer U.S. Supreme Court ruling.
U.S. Sens. Jeanne Shaheen and Maggie Hassan, both D-N.H., said some of these internet sales taxes imposed by other states are set to take effect as early as Jan. 1. The taxes are permitted because of the high court’s ruling in the South Dakota v. Wayfair Inc. case.
Shaheen and Hassan are joining U.S. Sens. Ron Wyden and Jeff Merkley, both D-Oregon, in asking for a ban on retroactive sales tax collection and a moratorium on the action until Congress passes measures to protect small businesses. They sent a letter to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Charles Schumer, D-N.Y., urging action against the taxes.
“While the court’s decision pointed to South Dakota’s lack of retroactivity, there is no guarantee that states will not take action against defenseless out-of-state small businesses. We believe a statutory ban on retroactive state sales tax collection is necessary to ensure that small businesses are not punished by cash-strapped states they have no relation to,” the letter states in part.
Associated Press information shows that prior to the South Dakota v. Wayfair Inc. decision, the law was that businesses selling online had to collect sales tax only in states where they had a physical presence. That meant major national retailers such as Apple, Best Buy, Macy’s, Target, Walmart and the like, were generally collecting sales tax from online customers.
This was not the case for businesses whose primary or exclusive mode of sale is the internet.
Because of the ruling, states from Maine to Hawaii have the authority to impose taxes on the products someone from those states uses the internet to buy from a New Hampshire business.
“While we disagree with the decision and believe it should be overturned, we hope to work with you to, at a minimum, enact robust protections for small businesses,” the letter co-authored by Shaheen and Hassan continues. “We do not believe it is realistic to ask small businesses to have these new systems set up shortly after the holiday season, which is the busiest time of year for retailers. This is especially true in states where firms have no experience collecting sales taxes.”
The battle against internet sales taxes in New Hampshire is a bipartisan one. The executive actions Gov. Chris Sununu recently took against internet sales taxes include:
– directing the state Department of Justice to prioritize detecting internet sales tax scams;
– ensuring the department has dedicated resources to gather information related to efforts of other taxing jurisdictions to impose their sales tax obligations; and
– establishing a single website, www.nheconomy.com/nosalestax, that is intended to serve as a central clearinghouse for information about developments in the wake of the Wayfair decision.