The New Hampshire State House failed to pass an anti-sales tax bill during a special session Wednesday. The bill would have made it more difficult for other states to collect sales tax from online retailers based in New Hampshire.
On July 2, New Hampshire Senate President Chuck Morse and House Speaker Gene Chandler announced the launch of a bipartisan joint legislative task force in response to the Supreme Court’s June 21 ruling in South Dakota v. Wayfair. The ruling allows states to force out-of-state sellers with not physical presence in the state to collect sales taxes on goods shipped to the state. Previously, online retailers needed to have a physical presence in the state to be forced to pay sales taxes.
New Hampshire, along with Delaware, Montana, and Oregon, has no sales tax, so businesses in these states are expected to be hit the hardest by the recent SCOTUS decision. New Hampshire lawmakers worry that complying with 45 different sales tax laws will be too burdensome for small businesses selling a large portion of their products or services online.
Governor Chris Sununu, who has been very critical of the Wayfair decision, hoped to sign legislation protecting New Hampshire businesses from paying other states’ sales taxes—at least not without forcing other states to navigate a maze of restrictions and registrations. Businesses outside the state would have to pay a fee and be evaluated by the New Hampshire department of justice to be sure requests line up with federal and New Hampshire law.
The bill would also have allowed sellers operating in the Granite State to comply with foreign state sales taxes if it was beneficial for the seller. The bill, which had been approved by the Senate, will now return to the upper chamber.