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After Online Sales Tax Ruling, N.H. Lawmakers Called Back to Special Session

Allegra Boverman for NHPR

State lawmakers will return to Concord on July 25th for a special legislative session in response to an online sales tax ruling by the U.S. Supreme Court.

The Executive Council approved Governor Chris Sununu’s request on Wednesday.

Lawmakers will attempt to pass a bill that seeks to shield New Hampshire businesses from having to collect and remit sales taxes imposed by other states. The recent Supreme Court ruling overturned 50 years of precedent on this issue, clearing the way for states to collect sales taxes when a business located outside of its borders sells a good online to a customer within the state.

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

The Executive Council voted in favor of the special session on a 4-1 vote, with Democrat Andru Volinsky dissenting. Volinsky cautioned that any legislation passed by the state could open New Hampshire up to expensive litigation. He also fears that New Hampshire businesses could be on the hook for late fees or interest for failing to turn over sales tax collections in a timely manner.

Democrat Chris Pappas supported the special session, but requested that it be expanded to allow lawmakers to work on an unrelated issue: low Medicaid reimbursement rates for substance abuse and mental health treatment. He says low reimbursement rates threaten providers at a time of unprecedented need. Sununu declined to expand his special session proclamation to include any other topics, preferring instead to have lawmakers focus solely on the Internet sales tax issue.

"The Supreme Court got this one wrong, and we are going to make sure that our businesses are protected," Sununu said.

Prior to the Supreme Court’s ruling in South Dakota v. Wayfair, businesses only needed to collect and remit sales tax if it had a “physical presence” in the state, meaning an office or warehouse. South Dakota passed a statute that calls for any business that sells more than $100,000 worth of goods, or completes more than 200 transactions, to collect sales tax when it sells to customers within its borders, regardless of whether the business has a physical presence in the state. It was challenged by online vendors, but upheld by the justices.

New Hampshire officials fear that local companies that sell goods online will now have to serve as tax collectors for other jurisdictions, without the state receiving any benefits. There are 45 states that impose a sales tax, with more than 10,000 different taxing jurisdictions, including county and municipal sales taxes.

Lawmakers will begin work Thursday on a bill—or set of bills—related to the collection of Internet sales tax.

The legislation could set up road blocks, including forcing other states to gain the approval of New Hampshire’s Attorney General, before attempting to collect any tax receipts. 

Read the action below, as authorized under Part 2, Article 50 of the N.H. Constitution:

Todd started as a news correspondent with NHPR in 2009. He spent nearly a decade in the non-profit world, working with international development agencies and anti-poverty groups. He holds a master’s degree in public administration from Columbia University.

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