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New Hampshire has an advantage over its neighbors because we have no general sales tax, and many people shop here because of that. However, there is a bill in Congress that would create a new sales tax for interstate sales, including sales over the internet.
The Senate version of the bill, known as "The Marketplace Fairness Act" would require New Hampshire sellers to collect the tax from out-of-state customers and pay the tax to other states.
Here is how our Congressional representatives and candidates stand on the new tax:
Kelly Ayotte - Opposes
Charlie Bass - Opposes
Frank Guinta - Opposes
Annie Kuster - Supports
Jeanne Shaheen - Opposes
Carol Shea-Porter - Declines to state her position
Senators Ayotte and Shaheen have cosponsored a resolution in opposition to any interstate/internet sales tax; Rep. Bass wrote an op-ed stongly opposing any such bill. Rep. Guinta is opposed to any new tax, including an internet sales tax.
Annie Kuster has come out in support of the bill as long as sellers don't have to keep track of other states' tax rates saying, "That's a bill that's important to our economy..."
Carol Shea-Porter has refused to respond to repeated inquires as to her position on the bill.
I've posted this information here because I thought that Granite-Staters and those considering a move here would be interested in this information and because this information is difficult to find from other sources.
While that is interesting information, it is not a new tax. What it is is a new way of collecting it.
Buyers have always been liable for taxes owed in the state that an item is used in. If someone makes a tax-free purchase in NH and transports that item to MA, they are supposed to pay taxes on that item as if they had bought it in NH.
Asking merchants to collect it and pay it to whatever state their customer may be in would be a bookeeping nightmare.
Come, come, now. Don't get all worked up on this one.
"This bill has a 2% chance of being enacted. The following factors were considered:
The sponsor is a member of the minority party.
3-5 cosponsors serve on a committee to which the bill has been referred.
There is at least one cosponsor from the majority party and one cosponsor outside of the majority party.
Just 3% of all Senate bills in 2009–2010 were enacted."
While that is interesting information, it is not a new tax. What it is is a new way of collecting it.
Buyers have always been liable for taxes owed in the state that an item is used in. If someone makes a tax-free purchase in NH and transports that item to MA, they are supposed to pay taxes on that item as if they had bought it in NH.
Asking merchants to collect it and pay it to whatever state their customer may be in would be a bookeeping nightmare.
Actually, it is a new tax. States are forbidden from forcing a seller to pay sales tax unless the seller has a physical presence in their state. Only Congress has the power to tax interstate sales. What many states do is to create a "use tax", which is a tax on residents who "use" an item in that state. The states usually set the rate of the use tax at the same rate as their sales tax. The use tax is paid by the customer, sales tax is paid by the seller (however, most states let the sellers itemize the sales tax separately). The use tax only applies on items that were never taxed with a sales tax.
What this proposed bill does is to create a new sales tax, paid by (NH) sellers, that is set to the same rate as the sales tax that the customer would pay in their state. And it requires (NH) sellers to pay the tax to the customer's state.
So, if you are a reseller in NH and a customer from MA shops at your store and you know they are from MA (if they pay with a check or you see they have a MA license plate or they are buying online) then under this bill, you would need to figure out what the tax rate is for the items and collect it from the customer and pay the tax to MA.
There is a good article on Wikipedia that has all the details:
They have been trying to pass this kind of tax for about 10 years now, so if this one doesn't pass they will try again and again. The best defense is to identify politicians who support this kind of thing and end their political careers.
Since NH has few significant mail-order firms based here, and many retail stores near our borders with other states, such a federal law could actually be beneficial to New Hampshire.
All the MA people who previously evaded MA use tax by purchasing from Amazon (which is starting to collect MA sales tax anyway) and other online outlets will need to drive up to NH and pay cash if they want to evade the MA use tax.
Since NH has few significant mail-order firms based here, and many retail stores near our borders with other states, such a federal law could actually be beneficial to New Hampshire.
All the MA people who previously evaded MA use tax by purchasing from Amazon (which is starting to collect MA sales tax anyway) and other online outlets will need to drive up to NH and pay cash if they want to evade the MA use tax.
That's basically what I was thinking. If anything this law will be good for states with no sales tax as it adds additional incentive to come shop in that state. It will also be good for local businesses in states with a sales tax as they will be on a more level playing field with external retailers. Local retailers also tend to employ more individuals than bulk online warehouse-based stores (which are typically highly automated).
Not for additional taxes...but I do like to see taxes applied evenly; in the ideal world they would compute what the extra tax base would be then drop their sales tax rate accordingly...
Come to NH and spend TAX FREE. it's the NH way.... No new taxes and NO we won't collect any from other states unless they PAY a Fee.. A really big FEE.
A lot of locals in NH are done with these taxes.... The left better find another qway like the bake sales they are so fond of.
The primary shopping done by people to avoid their own state taxes is for alcohol containing products. For instance a fifth of JD cost about $25 in NH and near $30-35 in MA, CT, RI and VT. Those states would like to have their citizens pay that tax and would be very happy to have NH collect it for them. In fact flatlanders that do not pay their state excise tax are legally smugglers and can be prosecuted in their home state. Most New England States ignore individual smuggling of small amounts of booze but do investigate large amounts that bypass both the local taxes and monopoly distributer arrangements.
As a Frugal Yankee I do not see any reason we should help either other state’s revenuers or monopoly distributers. If people are willing to drive to New Hampshire and take the risk of smuggling booze and fireworks back to the rest of New England that is their decision. All we should do is thank them for their money and encourage them to return for more.
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Could be good for New Hampshire?
