New Hampshire Pushes Back Against Supreme Court Ruling On Online Sales Tax Last month, the Supreme Court ruled that states can require online retailers to collect sales tax. New Hampshire has called a special legislative session to try to thwart the tax collection.
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New Hampshire Pushes Back Against Supreme Court Ruling On Online Sales Tax

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New Hampshire Pushes Back Against Supreme Court Ruling On Online Sales Tax

New Hampshire Pushes Back Against Supreme Court Ruling On Online Sales Tax

New Hampshire Pushes Back Against Supreme Court Ruling On Online Sales Tax

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  • <iframe src="https://www.npr.org/player/embed/632019299/632019300" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Last month, the Supreme Court ruled that states can require online retailers to collect sales tax. New Hampshire has called a special legislative session to try to thwart the tax collection.

ARI SHAPIRO, HOST:

There is no sales tax in New Hampshire, but businesses there might have to start collecting sales taxes for other states because of online sales. That's after a Supreme Court ruling last month. It's unpopular with politicians and businesses in the state. New Hampshire Public Radio's Todd Bookman begins his report at the headquarters of one of those businesses.

(SOUNDBITE OF PULLEY SPINNING)

TODD BOOKMAN, BYLINE: NEMO Equipment is an outdoor retailer based in Dover, N.H. It makes sleeping bags and tents and pretty strong camp furniture.

(SOUNDBITE OF PULLEY SPINNING)

BOOKMAN: A 75-pound weight attached to a pulley drops onto a chair every few seconds to test its durability.

And so you feel a little bit like that chair - just battered.

LORCAN LAFLEUR: Yeah, just battered. Yeah, but holding up.

BOOKMAN: This is Lorcan LaFleur, chief financial officer for NEMO. It's been a rough month for the company's three-person accounting department. New Hampshire is one of five states that doesn't have a sales tax of its own. But the Supreme Court's late June ruling in the case of South Dakota v. Wayfair, Incorporated could now require the company to collect and remit a sales tax when it sells a camp chair online to a customer in another state.

LAFLEUR: You know, New Hampshire businesses are trying to focus on running their businesses - not, now essentially, playing tax collector for other states.

BOOKMAN: The Wayfair decision upends when sales taxes need to be paid and remitted. Here's Lindsey Stepp, revenue commissioner for New Hampshire, explaining the rules pre-Wayfair.

(SOUNDBITE OF ARCHIVED RECORDING)

LINDSEY STEPP: If the remote seller had a physical presence in that state - whether it be a warehouse, a storefront - then they were obligated to collect and remit the sales tax for sales that went into that state.

BOOKMAN: This was known as the physical presence rule. No physical presence in the state, and you didn't have to collect.

(SOUNDBITE OF ARCHIVED RECORDING)

STEPP: Post-Wayfair...

BOOKMAN: Following the court's ruling, physical presence is no longer the standard. What matters now is overall business. Do a hundred grand in sales in South Dakota, and South Dakota can now make you collect and remit its tax. Each state will get to set its own rules.

(SOUNDBITE OF ARCHIVED RECORDING)

CHRIS SUNUNU: They were absolutely wrong.

BOOKMAN: This is New Hampshire's Republican Governor Chris Sununu on the Wayfair decision.

(SOUNDBITE OF ARCHIVED RECORDING)

SUNUNU: A clear consensus has emerged. New Hampshire can and must take immediate action to protect our businesses from the potentially disastrous consequences of this Washington decision.

BOOKMAN: In sales-tax free New Hampshire, the Wayfair decision has become a bipartisan rallying cry. Democratic Senator Maggie Hassan is co-sponsoring a bill to overturn the court's ruling.

MAGGIE HASSAN: If they are losing revenue to Internet sales, then they can adjust their tax policy accordingly. They shouldn't come looking to New Hampshire's businesses to do it for them.

BOOKMAN: At the Statehouse, lawmakers are scheduled to vote Wednesday on a bill that would essentially create a series of hurdles. The proposed legislation calls for outside tax authorities to first register with the New Hampshire attorney general, pay a fee and then prove its sales tax is constitutional. Max Behlke is with the National Conference of State Legislatures, which - along with the 45 sales-tax states - supports the Supreme Court's ruling. He says it levels the playing field.

MAX BEHLKE: Regardless of where you're located in the country, regardless of where you're selling to, everybody should have to play by the same rules whether that's regulations or taxes or whatever they need to be.

(SOUNDBITE OF PULLEY SPINNING)

BOOKMAN: Back in Dover, where that camp chair took a pounding, NEMO's Lorcan LaFleur is planning for the worst. He says the firm has already hired a tax consultant, may need new accounting software and will likely add more bookkeepers.

LAFLEUR: There is no doubt that we are going to incur significant costs just from this ruling without the state or us gaining any benefit from it.

BOOKMAN: As CFO, LaFleur says he would rather focus on growing sales than collecting someone else's sales tax. For NPR News, I'm Todd Bookman.

(SOUNDBITE OF LITTLE STEVIE WONDER SONG, "FINGERTIPS")

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