A major U.S. Supreme Court ruling last week could force New Hampshire businesses to collect a sales tax on behalf of other states.
The ruling in the case of South Dakota v. Wafair overturned more than 50 years of legal precedent. The decision is seen as a blow to New Hampshire businesses, which say collecting a sales tax on behalf of other states is burdensome.
Morning Edition Host Rick Ganley spoke with Taylor Caswell, a commissioner at the New Hampshire Department of Business and Economic Affairs, about how the state plans to respond.
Editor’s note: this transcript has been edited lightly for clarity.
Governor Sununu and numerous state officials, you included, have come out against this ruling saying that it would be bad for the state’s economy. Can you explain how this would affect the average New Hampshire small business owner for instance?
Sure, for years we have operated like every other state. There’s a physical presence rule that goes with the charging of sales tax. poker domino And for years that’s worked very well. This decision overturns that physical presence rule and says effectively that even if you sell as a retailer outside of New Hampshire to another state, you have to charge a sales tax for that taxing authority, that state or that locality into which you’re selling, hold on to it, process it and then send it into that state at the end of the year, or at the end of the quarter. When you consider that there are 12,000 separate taxing entities across the United States, and you consider that New Hampshire is not one of them, it is a burdensome issue. And it’s really one that, for me, emphasizes the fact that New Hampshire has had a very definitive affirmation that says we do not charge state sales tax. And we’ve done that to give our residents and our retailers a competitive advantage, quite frankly, and now that’s in a lot of ways being taken away from us.
Okay, so what about consumers living in New Hampshire? You mentioned that New Hampshire advantage that we’ve always pushed.
Well, I mean one would imagine that the new administrative burden that is now going to be placed on our retailers is going to somehow find its way into the cost of products that inherently have never had sort of that tax addition to the cost. I think we’re seeing a lot of employers, especially in downtown retailers that are looking for a way to supplement what they are selling right there on Main Street by being able to access the Internet in the same tax free way — traditionally that we’ve been able to do it in New Hampshire. It takes away that option. And I haven’t had an opportunity to talk to a lot of retailers just yet, but I have to imagine that the impact of collecting, and monitoring and applying to these 12,000 districts is going to be a burden on them. That’s going to be a cost.