With a new session of Congress underway, U.S. Senator Kelly Ayotte (R-NH) is continuing the fight against any federal legislation that would force online retailers to collect sales taxes for other jurisdictions in which they do not have a physical presence. She is currently working across party lines with Senator Ron Wyden (D-OR) to reintroduce a resolution expressing the sense of the Senate that no federal legislation should give states the authority to impose any new burdensome or unfair tax collecting requirements on Internet businesses and entrepreneurs.
"Online businesses should be a source of jobs, not a source of new tax revenue. New Hampshire prides itself on having no sales tax, and our Internet retailers shouldn't be forced to become tax collectors for other states," said Senator Ayotte, a member of the Senate Commerce Committee. "We need to be vigilant to preserve our tax-free status, and I will continue to fight any federal effort that would require New Hampshire Internet businesses to collect sales taxes."
Senator Ayotte has worked diligently to protect New Hampshire Internet businesses from sales taxes. In addition to the resolution she introduced last year, she also posed tough questions to proponents of online sales tax legislation during a Senate hearing last year - declaring that such a change would trample on New Hampshire's right to not have a sales tax.
Under current Supreme Court precedent, absent a sufficient nexus, a state cannot compel out-of-state Internet vendors to collect and remit to it the sales tax its residents are required to pay on purchases from traditional brick and mortar vendors. For example, when a customer in Illinois (which has a sales tax) buys a product from an online vendor in non-sales tax New Hampshire that has no physical presence in Illinois, Illinois cannot currently force the New Hampshire vendor to collect and remit the Illinois tax on that sale. However, cash-strapped states looking to plug budget holes continue to push for a new law that would force online retailers to collect sales taxes for jurisdictions nationwide.
Joe Cortese, an online coin and stamp dealer from Pittsfield, said: "If small online retailers are required to collect sales taxes for jurisdictions across the country, these businesses will shrink rather than grow. The compliance costs in terms of time and money would simply be too much to bear. The consequences would be significant not just for businesses like mine, but for the entire economy."
Ken Smith, owner of Portsmouth's Mainely-New Hampshire store, said: "As a small business owner with an online presence, one of the reasons I've been successful is because New Hampshire doesn't have an income or sales tax. I applaud Senator Ayotte's efforts to help protect the New Hampshire Advantage and prevent Granite State businesses from becoming tax collectors for other states."