House and Senate lawmakers will return to the State House on Wednesday for what party leaders hope will be a bipartisan vote for legislation aiming to protect New Hampshire businesses from internet sales taxes. But not everyone is on board.
In a news release Tuesday, New Hampshire’s House Freedom Caucus directed volleys of criticism at the bill, drafted last week by a task force of senators and representatives. The concern: It doesn’t go far enough.
“The proposal is sorely lacking meaningful teeth,” the group said in a statement, calling the final bill “ineffective.”
“While we support the idea of a special session to deal with this matter, we should slow this train down to ensure that the public and every legislator get a chance to try to make the bill better,” said Rep. Leonard Turcotte, R-Barrington.
Wednesday’s special session, formally called by Gov. Chris Sununu and the Executive Council earlier this month, comes in response to a landmark Supreme Court ruling last month, South Dakota v. Wayfair, in which the court ruled, 5-4, to overturn decades of precedent that had prevented out-of-state jurisdictions from crossing state lines to collect sales tax. Following the ruling, internet sellers in New Hampshire, which doesn’t have a sales tax, could be asked to collect sales tax from out-of-state purchasers for the state and local governments that serve that customer, setting off worries of disruptions to Granite State business models.
The proposed legislation, much of which was crafted by the governor’s office, seeks to dissuade frivolous sales tax claims on New Hampshire businesses by setting up a series of logistical hoops for states to jump through in order to file them. But members of the conservative Freedom Caucus took issue with the approach Tuesday. For them, the act of creating a process for sales tax collection at all, however laborious, is a letdown for the state’s businesses.
Instead, the legislation should include more absolute measures, lawmakers said Tuesday. The new law should prohibit state agencies from aiding any state or local government in the collection of the taxes, rather than set up a process, they said. And it should include a potential constitutional provision to block foreign jurisdictions from gaining standing in the state to sue the state’s businesses, they added.
“The proposed legislation coming before the Legislature Wednesday is not a roadblock to prevent out-of-state sales taxes, it’s a roadmap to tell the 10,000 taxing entities how to collect these taxes,” said Rep. Michael Sylvia, R-Belmont.
The rift could create hiccups for a bill that was hoped to sail through both chambers. But ahead of the vote, supporters of the legislation brushed off some of the concern.
“I appreciate the concern,” said Rep, Barbara Griffin, R-Goffstown, a member of last week’s drafting team and a candidate for House Speaker. “However, we have a federal Constitution, and in regards to that, the case has been decided.”
Refusing to carry out or assist with internet sales tax collection is not an option, Griffin added.
“I think to suggest that we can stop the implementation of a U.S. Supreme Court order is disingenuous at best,” she said.
And by preventing standing, she added, New Hampshire might only be forcing court actions to be taken in other states, requiring businesses to travel, she added. In contrast, the task force’s bill explicitly requires any disputes to be filed in New Hampshire’s court system.
“In my opinion, to do nothing leaves our retailers completely at the mercy of out-of-state authorities contacting them to do something that our state laws don’t require,” she said.
Lawmakers in the Senate will meet at 10 a.m. Wednesday to deliberate on the bill; the House will take up the bill at 10:30.
(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)
