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Internet sales tax debate: Special session rules, quirks, attendance may come into play

New Hampshire Union Leader

July 07. 2018 10:22PM
Gov. Chris Sununu, surrounded by legislative leaders on June 28, 2018, explained how the state would address the Supreme Court decision on internet sales taxes. (Dave Solomon/Union Leader)

CONCORD - The stunning Supreme Court decision allowing states to collect online sales taxes, even in no-tax states like New Hampshire, will bring Gov. Chris Sununu and state lawmakers back into session later this month to tackle the issue.

But the unique rules and quirks about special sessions in the state raise questions over what legislators can accomplish and how many of them will actually show up.

On Wednesday, Sununu and the Executive Council will make official the special session Sununu has championed to develop a plethora of legal hurdles to make it difficult to force states like New Hampshire to collect taxes on online sales from its residents.

The Union Leader was the first to report July 25 is the date for that hoped-for one-day session.

Sununu has offered a detailed outline for the solution and legislative leaders have named a high-powered task force to finalize those details.

Senate Majority Leader Jeb Bradley, R-Wolfeboro, said the recommendations of Attorney General Gordon MacDonald and Revenue Commissioner Lindsey Stepp will be given plenty of weight when they open the task force's dialogue Thursday.

"We will rely on their judgment as to what is practical, feasible and defensible," Bradley said.

"The defensible part is the most important. We have to be cautious that we don't try to do something that will not work, that in the end raises false hopes for people in the business community.

"At the same time if we are able to go with some of the ideas that have been promoted by the governor they could really benefit our companies and taxpayers."

Special sessions are unusual but not uncommon in New Hampshire, in part because the Legislature closes down business meetings in June, unlike states like Massachusetts that keep lawmakers on call to come back at any point during the year.

There have been five special sessions since 2006.

"We are pretty accustomed to them," said House Clerk Paul Smith, who along with Senate Clerk Tammy Wright are the parliamentarian experts in the Legislature.

The most consistent principle is there isn't any consistency.

"Every special session is different," Smith said. "You will find they sort of mirror some sessions of the past but they can be as narrow or as widely focused as they want. In many cases, once we are in special session, if the House wants to do something, it can do whatever it wants."

House Speaker Gene Chandler, R-Bartlett, and Senate President Chuck Morse, R-Salem, have let their leadership teams know they would prefer this session be limited to the response to the South Dakota vs. Wayfair Supreme Court ruling on collecting online sales taxes.

Special sessions can be unpredictable

Governors always harbor dreams of bipartisan warmth and agreement. This happened at the last special session in 2015, when lawmakers embraced forming a commission that ultimately came up with nearly two dozen legislative solutions for the opioid epidemic.

Former Gov. Maggie Hassan had the same hopes to get Medicaid expansion first adopted during a special session in November 2013. Chris Sununu was on the Executive Council back then and cast the lone vote against Hassan's call to bring them back to take up the Medicaid expansion recommendations of a commission.

Ultimately the Republican-led State Senate rejected a Medicaid expansion measure and the session ended in failure.

"Today, members of the Senate Republican caucus let down the people of New Hampshire by refusing to compromise to develop a health care expansion plan that would actually work," Hassan said at the time.

The following spring the Legislature in regular session adopted a Medicaid expansion plan that relied on private insurers offering coverage which started in July 2014.

No mileage may mean fewer lawmakers

A little-known quirk about special sessions is, unlike regular meetings, lawmakers cannot receive mileage payments. State law only grants legislators $3 for each day they are in special session.

"If everybody showed up in the House, which isn't going to happen, it would cost us $1,155 to pay all the reps," House Clerk Smith said. "That's a far cry from what you can get from mileage for that particular day."

Indeed, if all sitting legislators put in for and got paid mileage for a single day, the taxpayer cost is more than $16,000.

This raises concern about turnout at this special session, especially since the number of no-show House members peaked at higher-than-normal levels last spring.

"We've been seeing a lot of absences, how many of those not running (for reelection) this fall decide, why bother with coming," Democratic Leader Shurtleff said.

Lawmakers don't meet normally in the summer because legislative chambers do not have air conditioning, which makes them beastly hot, especially when there's a room full of legislators.

Meanwhile, the task force's work may broker an agreement, but some legislators are skeptical about doing anything right now.

"I am not a fan of it. My intuition is that whenever we pass legislation, we open the area up to litigation," said State Sen. Bob Giuda, a member of the task force. "Let's just sit back and see what happens before we run in and adopt practices that are just going to invite other states to sue us."

Democratic Leader Shurtleff has an open mind and gets a private briefing Monday from AG MacDonald, Sununu Legal Counsel John Formella and Administrative Services Commissioner Charles Arlinghaus.

U.S. Sens. Maggie Hassan and Jeanne Shaheen, both D-NH, have authored a federal bill that would keep these charges from being collected in New Hampshire and the four other states without a sales tax.

"This may be an issue that should be dealt with by the federal court and the Congress rather than have 50 states adopt legislation and end up with a checkerboard," Shurtleff said.

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