New Hampshire pushing to stop online sales tax collection

posted at 8:01 am on December 5, 2013 by Jazz Shaw

In case you missed it, there were some recent developments in the battle over the Marketplace Fairness Act and related state level proposals. Earlier this week, a challenge by Amazon to a New York State law requiring the collection on online sales taxes reached the Supreme Court. They passed on even hearing it.

The U.S. Supreme Court stayed out of the multibillion-dollar fight over Internet sales taxes, leaving intact a New York law that forces Amazon.com Inc. to collect money from customers in that state.

Acting on one of the biggest online-shopping days of the year, the justices made no comment in rejecting appeals by Amazon and Overstock.com Inc. , another Internet retailer. The companies said the law, upheld by New York’s top court, violates the Constitution by demanding tax collection from businesses that don’t have facilities in the state.

This one had been seen a a test case, watched by retailers around the country. If they could have gotten the Supreme Court to shoot down the NY law, it would have provided a foothold for debates in other states and in Congress over the pending Marketplace Fairness Act. But having passed on it, the door remains open for such changes. That doesn’t mean that it’s smooth sailing, however. As the Union Leader reports, the New Hampshire delegation is still in there fighting on whichever hill it can find.

U.S. Sen. Kelly Ayotte, R-N.H., on Tuesday urged Republican House Speaker John Boehner to reject any attempt to bring the “Marketplace Fairness Act” to the House floor for consideration.

A day earlier, U.S. Sen. Jeanne Shaheen, D-N.H., called on House Judiciary Committee Chairman Bob Goodlatte, R-Va., to exempt businesses in states without a sales tax, if the House takes up the Senate-approved legislation.

If the act becomes law, it would force Internet merchants to collect sales taxes on online purchases and send them to the sales-tax state where the buyer resides. New Hampshire consumers would not be directly affected, but online businesses in the Granite State would have to begin collecting sales taxes for hundreds of taxing jurisdictions nationwide.

If they can’t get the entire bill shut down, Ayotte is pushing for an amendment which would at least exempt states which do not themselves have a sales tax. I’m not sure exactly what the precedent is for that one, but if the sellers are not set up to collect state taxes at all, it certainly sounds as if it could place an extra burden on them not felt by retailers in other states where it is regular practice. In any event, this battle is far from over. It’s not a sure bet that John Boehner will ever allow this to the floor for a vote, and even less sure that the votes to support it would be there if he did.


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…isn’t that a blue state?
t a x e s !

KOOLAID2 on December 5, 2013 at 8:02 AM

No new taxes.

Cut spending.

petefrt on December 5, 2013 at 8:05 AM

…isn’t that a blue state?
t a x e s !

KOOLAID2 on December 5, 2013 at 8:02 AM

Blue state politicians have to make their case to their constituents, as well.

gryphon202 on December 5, 2013 at 8:06 AM

I have said it before, and it bears repeating:

As someone who comes from a state and city that relies heavily on sales tax for government revenue, you will never begin to find “fairness” in changing tax laws, if by “fairness” you mean no one entity has an advantage over another. Let the markplace rule and competition will weed out the losers. It’s not my job as a conservative to feel bad for the failures, whatever the circumstances of their demise.

gryphon202 on December 5, 2013 at 8:08 AM

As much as amazon may scream, there are other big retailers out there who look at it as another way to crush smaller retailers.

Look at banking regulations. Fewer and fewer small banks because they can’t deal with the regs.

LtGenRob on December 5, 2013 at 8:17 AM

Blue state politicians have to make their case to their constituents, as well.

gryphon202 on December 5, 2013 at 8:06 AM

Not in MD.

Its all “we just need some common sense measures to this fair and equal law, and if you don’t argee, well who cares!”

Gatsu on December 5, 2013 at 8:33 AM

What? Did anyone really expect this court to go against the government in a tax case?

Nomas on December 5, 2013 at 8:35 AM

Not in MD.

Its all “we just need some common sense measures to this fair and equal law, and if you don’t argee, well who cares!”

Gatsu on December 5, 2013 at 8:33 AM

Yeah, well you people tax rain. Collecting internet sales tax pales in comparison to that.

Happy Nomad on December 5, 2013 at 8:40 AM

The beast is out there and he’s hungry, the beast must be fed.

Bishop on December 5, 2013 at 8:45 AM

It’s not the state sales taxes that’s the problem. They can be handled based upon which state an item is being shipped to. It’s the local sales taxes that are the big headache. Ohio’s sales tax is, IIRC 5-5.5%, Lucas county is 6.75%. And then if I ship a Christmas present from here to my niece in Illinois? Who’s sales tax applies?

rbj on December 5, 2013 at 8:48 AM

… Let the markplace rule and competition will weed out the losers. It’s not my job as a conservative to feel bad for the failures, whatever the circumstances of their demise.

gryphon202 on December 5, 2013 at 8:08 AM

Agree. And Progress hurts sometimes. To use taxes to ‘even the field’ against online retailers is to fight the natural evolution of the way products are distributed.

I, the Tsar of Earth, envision my world where traffic is mostly brown vans, where there are less left turns into shopping strip-malls, where there are more webstores with exceptional service and where I can telecommute to work.

The profit takers will shift, but this is a more efficient model for everyone.

(I would, however, like to keep my local grocery store and gas station.)

Tsar of Earth on December 5, 2013 at 8:49 AM

Not in MD.

Its all “we just need some common sense measures to this fair and equal law, and if you don’t argee, well who cares!”

Gatsu on December 5, 2013 at 8:33 AM

You can’t make states’ tax collection practices fair by enacting a federal law. That is wrong on so many levels, not the least of which is being a direct violation of the Constitution’s promise of a (small-r) republican form of government.

gryphon202 on December 5, 2013 at 8:50 AM

I, the Tsar of Earth, envision my world where traffic is mostly brown vans, where there are less left turns into shopping strip-malls, where there are more webstores with exceptional service and where I can telecommute to work.

The profit takers will shift, but this is a more efficient model for everyone.

(I would, however, like to keep my local grocery store and gas station.)

Tsar of Earth on December 5, 2013 at 8:49 AM

So what happens when someone else disagrees with you? :P

gryphon202 on December 5, 2013 at 8:52 AM

Yeah, well you people tax rain. Collecting internet sales tax pales in comparison to that.

Happy Nomad on December 5, 2013 at 8:40 AM

Don’t remind me.

The only comfort I get lately is knowing OweMalley is going to face plant when he tries to run for Prez.

Gatsu on December 5, 2013 at 8:55 AM

It’s not the state sales taxes that’s the problem. They can be handled based upon which state an item is being shipped to. It’s the local sales taxes that are the big headache. Ohio’s sales tax is, IIRC 5-5.5%, Lucas county is 6.75%. And then if I ship a Christmas present from here to my niece in Illinois? Who’s sales tax applies?

rbj on December 5, 2013 at 8:48 AM

They are handled by many online retailers already. But when you get into the larger states, California springs to mind, they may have several hundred taxing jurisdictions just within the one state. And tax rates sometimes change. It’s nasty for a brick-and-mortar retailer to have to keep up with, but they deal. It’s even more difficult for the little guy who ships things out-of-state.

“Fairness” should flag your bullshit-o-meter. It’s a weasel word used by politicians who are just looking for another way to buy votes when the old ways no longer work; a solution in search of a problem.

gryphon202 on December 5, 2013 at 8:56 AM

It’s still amazing no one in the political realm simply proposes that every transaction get taxed where it occurs – so an online company would only have to collect sales tax for its own locale, just like all the brick and mortar stores. It’s really not that hard.

Except, of course, that people would go shop in no-tax states and the place where they reside would lose all that lovely income – despite moronic things like “use taxes”.

GWB on December 5, 2013 at 9:05 AM

It’s still amazing no one in the political realm simply proposes that every transaction get taxed where it occurs – so an online company would only have to collect sales tax for its own locale, just like all the brick and mortar stores. It’s really not that hard.

Except, of course, that people would go shop in no-tax states and the place where they reside would lose all that lovely income – despite moronic things like “use taxes”.

GWB on December 5, 2013 at 9:05 AM

Exhibit “A” in why fairness is impossible in trying to unify state-level tax collection. Thanks, GWB.

gryphon202 on December 5, 2013 at 9:06 AM

Also worth mentioning, if transactions are taxed where they occur, online companies could just move their distribution centers or offices to jurisdictions with low or no taxation. Same reason that two major national credit card companies have board meetings in South Dakota. ;)

gryphon202 on December 5, 2013 at 9:08 AM

Tax tax tax. Have you guys ever stopped and thought about how much one item is taxed. Think about it… every screw gets taxes, that gets shipped to another company who then uses the screw to make something else… that company then turns around and sells it and that item ( which has the parts that were already taxed one ) gets taxed again… it goes on and on.

How anyone could be for more taxes is beyond me. we have enough taxes … too many if you ask me. Its time to trim the fat.

watertown on December 5, 2013 at 9:23 AM

Tax tax tax. Have you guys ever stopped and thought about how much one item is taxed. Think about it… every screw gets taxes, that gets shipped to another company who then uses the screw to make something else… that company then turns around and sells it and that item ( which has the parts that were already taxed one ) gets taxed again… it goes on and on.

How anyone could be for more taxes is beyond me. we have enough taxes … too many if you ask me. Its time to trim the fat.

watertown on December 5, 2013 at 9:23 AM

if VAT ever gains a foothold (stranglehold??) here this will be even worse.

dmacleo on December 5, 2013 at 9:31 AM

This sounds like an opportunity to set up a reshipping business in New Hampshire. Let folks in NY buy the item, and have it shipped to the reshipper in NH, who charges a fee plus whatever postage to send the item on to NY. The reshipper isn’t selling anything, so owes no tax, and the end user pays no sales tax. Of course, it only works for items where the tax is greater than the postage and fee, but there are enough big ticket items that this business should be feasible.

Wino on December 5, 2013 at 9:42 AM

Slaves to the state. That’s what we business people are become.

We are forced to collect sales taxes on sales inside NYS and every other state in which we do business in our company, and NYS is one of the worst we deal with. They don’t pay us for this labor. They aren’t even clear about what taxes must be collected. They audit us periodically. At least they aren’t Illinois, who once upon a time made us pay a disputed amount in order to appeal their illegal interpretation of their own law, and then, once we won, sadly informed us they didn’t have the money to pay us back and we could credit the overpayment against future sales.

This “sales tax collection” rule is an outrageous act of the state against innocent citizens.

MTF on December 5, 2013 at 10:15 AM

For those of us who live near the NH border, sales taxes on internet sales will force us into the NH brick and mortar stores where sales tax is not required.

rhombus on December 5, 2013 at 10:16 AM

GWB on December 5, 2013 at 9:05 AM

That cat slipped out of the bag back when stores were allowed to sell to out of state shoppers without collecting the tax. The states allowed that so they didn’t put their own in-state merchants out of business. It would have to be up to Congress to require states to not exempt supposedly out of state purchases, because the states will never do that themselves.

pedestrian on December 5, 2013 at 10:18 AM

So what happens when someone else disagrees with you? :P

gryphon202 on December 5, 2013 at 8:52 AM

The Tsar is a most benevolent One. Mostly.

Tsar of Earth on December 5, 2013 at 10:20 AM

For those of us who live near the NH border, sales taxes on internet sales will force us into the NH brick and mortar stores where sales tax is not required.

rhombus on December 5, 2013 at 10:16 AM

And we in NH love it. Our State run liquor stores do a bang-up business from our brothers and sisters in Maine and Massachusetts. Especially around the holidays, stop into any one of the State run liquor store on Memorial Day weekend, Thanksgiving/Christmas/New Years and a large percentage of the car’s license plates are ME or MA. I won’t even mention the Canadian’s who shop till they drop when visiting their cousins to the south. :-)

(Sale)Tax Free and loving it since 1776.

D-fusit on December 5, 2013 at 10:51 AM

Did you see the Daily Caller today? Parallels between Orwellian title “Marketplace Fairness Act” and Obamacare are freaking scary.

http://dailycaller.com/2013/12/04/the-marketplace-fairness-act-will-be-as-hard-to-implement-as-obamacare/

SBABG on December 5, 2013 at 12:58 PM

(Sale)Tax Free and loving it since 1776.

D-fusit on December 5, 2013 at 10:51 AM

Feels better when you hide it in an obscene corporate income tax rate, huh.

Ronnie on December 5, 2013 at 12:58 PM

It seems this has an easy fix in Congress since the Feds regulate interstate commerce. Just pass a bill that defines Interstate sales as being considered as happening at the SELLER’S physical location. That point being set defined as the source of shipping or some other arbitrary rule like state with most company employees.

Then watch businesses bale on high tax states like IL, CA and NY in favor of NH and such.

OBQuiet on December 5, 2013 at 3:06 PM