The state of New Hampshire is weighing in on an upcoming U.S. Supreme Court case that could reshape how sales tax is collected across state lines.
Following a 1967 high court ruling, states have been prevented from imposing a sales tax if the seller is physically located outside of its borders. In practice, this applied to items such as those ordered through mail order catalogues.
Today, though, Amazon and online shopping have reshaped how goods are bought and sold, with states that impose a sales tax arguing that the prohibition costs them billions of dollars in crucial revenue.
In January, the Supreme Court agreed to hear the case of South Dakota v. Wayfair, Inc., with arguments likely to be held this spring.
Thirty-five other states, including Maine and Massachusetts, have submitted a brief in support of South Dakota, arguing that “as the volume of internet-based retail transactions continues to compound daily, the physical-presence rule exacts an ever-increasing toll on the states’ fiscal health.”
On Wednesday, New Hampshire Governor Chris Sununu, along with state Attorney General Gordon MacDonald, announced that they will file a legal brief in support of the current precedent.
“As Governor, I am going to do everything in my power to fight this outrageous attempt to force New Hampshire’s businesses to collect out of state taxes. We are a no sales tax state,” Sununu writes in a statement. “That applies across the board, to our citizens and those in other states. Period.”
“It is important that these interests are represented as the Supreme Court considers this case and the implications of removing the physical presence requirement,” adds MacDonald.
New Hampshire is likely to file a joint brief with other states that don’t impose a sales tax, with a targeted filing date of late March.
New Hampshire Senator Jeanne Shaheen issued a statement shortly after the Supreme Court agreed to hear the case. She also backs the current precedent.
“A reversal by the Court would be especially damaging to New Hampshire where our small businesses have no experience collecting sales taxes and should not be forced to become tax collectors for other states,” writes Shaheen. “I will closely monitor the Court’s deliberations and continue to vigorously oppose efforts in Congress that make it harder for New Hampshire companies selling products online to compete with big-box stores and giant e-retailers.”