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Sales tax speed bumps: Shielding NH businesses

July 15. 2018 10:03PM

The Sununu administration may not be able to put up a stop sign to prevent other states from collecting sales taxes from New Hampshire online retailers. But they can build a few speed bumps.

States have long been able to impose “use taxes” on items sold in other states and brought back or shipped to their states, but they require customers to pay them. South Dakota passed a law requiring out-of-state businesses to collects its sales tax on items shipped to South Dakota.

Last week, the Executive Council voted to call the Legislature into special session to address the U.S. Supreme Court’s Wayfair decision. Executive branch officials briefed lawmakers on a draft bill that would require other states to notify the New Hampshire attorney general’s office before billing Granite State businesses for sales taxes on purchases shipped to their states.

The AG would have 90 days to determine if that state’s sales tax complied with the U.S. Constitution. In upholding South Dakota’s internet sales tax, the court left open questions about other jurisdictions.

Not only would this step protect New Hampshire firms from retroactive taxes, but it might make the prospect of collecting revenues from the Granite State too much trouble to bother attempting.

Business Technology Editorial State Government

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