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Bill proposed to halt online tax collections

By KEVIN LANDRIGAN
New Hampshire Union Leader

July 19. 2018 7:48PM




CONCORD — A high-powered task force wrapped up its work Thursday and proposed barriers to discourage other states from collecting sales taxes from New Hampshire online retailers.

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

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.

Gov. Chris Sununu praised the unanimous recommendation of this panel and urged lawmakers to approve the recommended bill when they meet in special session next Wednesday.

“The Wayfair decision has created enormous uncertainty, and it is critical that we come together on a bipartisan basis to provide as much protection as we can for our businesses,” Sununu said.

Senate Majority Leader Jeb Bradley, R-Wolfeboro, said the group relied heavily on the recommendations of Attorney General Gordon MacDonald and Revenue Commissioner Lindsey Stepp in part because, if adopted, this bill is likely to be challenged by other states.

The proposed measure creates a multi-step process that requires other states to provide notice to the AG’s office before they try to collect sales taxes. It bans New Hampshire sellers from giving customer information to out-of-state tax collectors unless that request is first supplied to the AG. State prosecutors are given the power to make sure these out-of-state tax collectors are following New Hampshire laws.

“We believe that this bipartisan legislation will thwart attempts to require New Hampshire small businesses from taking on additional burdens to collect sales taxes for other states and I look forward to the support of my colleague in the House and Senate on this bill next week,” Bradley said.

Sununu and key legislators have conceded a goal of this legislation is to make collection of sales taxes from New Hampshire businesses so cumbersome that the 45 states that have a sales tax won’t bother pursuing them here.

Sen. Bob Giuda, R-Warren, had been skeptical that action by lawmakers on this matter might be premature.

He said Thursday but serving on the task force convinced him this solution makes sense. Giuda called the bill an “essential first step” in dealing with this new tax challenge.

“The work done by the task force takes an important first step in creating substantial barriers for other taxing entities requiring New Hampshire businesses to collect and remit taxes on their behalf,” Guida said.

Senate Democratic Leader Jeff Woodburn of Whitefield and House Minority Leader Steve Shurtleff, D-Penacook, signed on as co-authors of the Senate bill.

House Majority Leader Dick Hinch said this ensures the work continues as it creates an ongoing commission to look at further refinements.

“Our business community is seeking clarity and cover as it pertains to this issue, and I believe the work product of the task force and the proposed bill will provide that,” Hinch said, “We want our economy to benefit from online sales, but we don’t want unfettered access by thousands of taxing entities to our businesses.”

The final language of the bill and proposed operating rules for the special session was to be posted on the legislative web site late Thursday night at http://www.gencourt.state.nh.us/house/caljourns/default.htm.

klandrigan@unionleader.com


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