New Hampshire pushing to stop online sales tax collection

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 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 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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