N.H. Looks to Take 'Aggressive' Position Following SCOTUS Wayfair Sales Tax Ruling

Oct 24, 2018

John Formella, right, legal counsel for Gov. Sununu, is joined by anti-tax advocate Grover Norquist at an event in Concord.
Credit Todd Bookman/NHPR

After failing to pass a bill in response to the Supreme Court’s Wayfair decision during a special session this summer, Governor Sununu’s office says the legislature should be ready to try again.

The GOP-controlled House rejected a bill backed by Sununu that would have created hurdles for other states attempting to collect a sales tax from a New Hampshire business. 

The Wayfair decision, which overturned 50 years of precedent, clears the way for those collection efforts even if a business doesn’t have a “physical presence” in the taxing state.

[You can find NHPR's previous coverage of this issue here.]

The ruling was seen as a blow to New Hampshire businesses, as most have little experience collecting and remitting a sales tax.

Sununu’s legal counsel John Formella told a panel in Concord on Wednesday that he expects the legislature to try again next session to pass a bill.

“From my perspective, from the governor’s perspective, and I know from the Attorney General’s perspective, it is important to take, I think, an aggressive legal position on behalf of the state, and be prepared to defend that position in court,” said Formella.

Formella was speaking at an event hosted by Americans for Tax Reform, The Josiah Bartlett Center of Public Policy, and Granite State Taxpayers.

New Hampshire Attorney General Gordon MacDonald told the audience his office has done what it can in the wake of the legislature’s failure to pass a bill. That includes creating a website and a hotline for local businesses, though to date, he said, no businesses have called the phone number.

Still, he says his office is ready to stand beside any businesses who receive a sales tax bill from an outside jurisdiction.

“If enforcement efforts do arise, we are going to look at them, and we are going to do what we can to protect and defend our fundamental state interests,” said MacDonald.

Post-Wayfair, 32 states have indicated their intention to try to collect sales taxes from businesses located in other states who sell goods delivered across state lines. New Hampshire is one of just five states with no broad-based sales tax.

Panel moderator Bill O’Brien, former N.H. House Speaker, said the state would be wise to pursue a range of countermeasures, from legislation to legal action.

“We can go at it a number of different ways in order to lay down those mines so that when California arrives and Illinois arrives and any other state arrives, they are going to be blown up in their attempts,” said O’Brien.

Anti-tax advocate Grover Norquist also spoke at the event, as did Drew Cline, president of the Josiah Bartlett Center.