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NH lawmakers kill internet sales-tax bill

New Hampshire Union Leader

July 25. 2018 10:23PM

CONCORD — The rank-and-file of the New Hampshire House of Representatives dealt a stunning rebuke to Gov. Chris Sununu and the leadership of both political parties Wednesday, gutting a proposed response to the Supreme Court decision allowing all states to collect their sales taxes through online purchases.

Meeting in special session, the Senate had adopted, 24-0, the recommendation of a task force for a bill that would set up legal barriers before other states could collect their sales taxes from New Hampshire businesses.

But moments later, the House voted, 164-151, to strip the entire bill (SB 1) of everything but a 13-member commission that would study the issue and make a report by next July 1.

Then in an unusual move, House Speaker Gene Chandler, R-Bartlett, brought a sudden end to the special session of the House, which closed off any hope of further House-Senate compromise talks on this issue Wednesday.

About an hour later, the Senate voted not to take the ultimatum, instead killing the commission-only alternative by a 23-0 vote. Many senators couldn’t hide their anger at the entire cause falling apart.

“This is an absolute insult to our business communities,” Sen. Regina Birdsell, R-Hampstead, said about the House vote.

Senate President Chuck Morse, R-Salem, urged senators to keep their summer schedules open and expect to return to try to resurrect the effort.

“You can expect to be back here. My recommendation is we get back here and get it done. We are going to fight for the businesses,” Morse said.

Sununu, who was not in the State House all day Wednesday, issued a defiant statement that the battle will go on.

“While the House wastes time, they left our state’s small businesses vulnerable to being forced to collect other state’s sales taxes,” Sununu said.

“I have already spoken with the Attorney General and his office will do everything in its power to protect New Hampshire’s small businesses. Despite today’s outcome, I will never stop fighting for our small businesses and the New Hampshire Advantage.”

State Rep. J.R. Hoell, R-Dunbarton, is a leader of the House Freedom Caucus that turned out about 80 House Republicans against the compromise.

Hoell said the task force’s work was quickly thrown together and was too much of a capitulation to letting other states collect sales taxes.

“I want a real roadblock, not a tollbooth,” Hoell said.

The U.S. Supreme Court’s landmark Wayfair decision last month ended a 50-year ban on charging online sales taxes — even in New Hampshire and the four other states without sales taxes.

In a 5-4 vote, the justices ruled that states such as South Dakota, which has a sales tax, could collect that sales tax from online retailers in all states. Individual consumers in New Hampshire are not affected.

The proposed measure would have created a multi-step process that required other states to provide 120 days notice to the Attorney General’s office before they could collect online sales taxes.

It banned New Hampshire sellers from giving customer information to out-of-state tax collectors unless that request is first supplied to the Attorney General’s office.

State prosecutors were to be given the power to make sure these out-of-state tax collectors were following New Hampshire laws.

And it would have allowed New Hampshire businesses to charge and recover from other states the costs they would incur serving as their tax collectors.

“The businesses today are potentially faced with becoming the tax man for 10,000 taxing jurisdictions,” said Sen. Andy Sanborn, R-Bedford.

But in the House, Rep. Dan Itse, R-Fremont, said the Congress and not New Hampshire has the power to regulate interstate commerce.

“What has been proposed before you has many problems. Is there a crisis? Yes,” Itse said.

“Congress needs to deal with it but it’s not within our power to deal with it.”

Rep. Carol McGuire, R-Epsom, said the task force solution was too subservient to the sales tax states.

“We need to take action to defend the New Hampshire advantage, it is no sales tax. It is not only sales tax for those jurisdictions that can jump through the hoops,” McGuire said.

Executive Councilor Andru Volinsky, D-Concord, was the only member of the five-person panel who opposed the special session.

“From the outset, I have had concerns that any response to this issue had to be carefully constructed,” Volinsky said. “I was gratified to see a majority in the House agreed with that view.”

Senate Democratic Leader Jeff Woodburn of Whitefield said Sununu and House GOP leaders made the flawed assumption legislators would simply go along with whatever was put in front of them.

“We have to listen. Sometimes in leadership the attitude is well the membership has to listen to us. They don’t. We have to listen to them and act in a way that respects their role in the process,” Woodburn said.

The Republican-led Senate rejected attempts to introduce two other topics during this session, one to study the impact of Trump administrative tariffs on New Hampshire businesses and the other to spend $7.5 million to raise the Medicaid rate paid to mental health and substance abuse providers.

Sen. Dan Feltes, D-Concord, said he hoped those issues can be revisited when lawmakers are called back a second time to work on the sales tax issue.

Politics Concord

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