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N.H. lawmakers want to invalidate online tax ruling

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Members of New Hampshire’s congressional delegation have proposed legislation that would absolve online retailers from having to collect taxes for jurisdictions outside the state following a U.S. Supreme Court ruling requiring such collections.

U.S. Reps. Annie Kuster and Chris Pappas, both Democrats, this week introduced the Stop Taxing Our Potential Act to essentially negate the 2018 South Dakota v. Wayfair ruling. That ruling said states can require online retailers to collect sales tax on purchases in states where they don’t have a physical presence. It was a victory for states losing billions of dollars in revenue every year but a blow to New Hampshire, which prides itself on having neither a sales nor income tax.

“Requiring small businesses to collect an online sales tax from thousands of different tax jurisdictions will hurt growth in New Hampshire and increase red tape,” Kuster said in a statement Friday.

Small businesses in New Hampshire have complained about the expense of complying with the ruling, and lawmakers enacted legislation this session to add some roadblocks for other states and local governments seeking to collect the tax. That law requires jurisdictions looking to collect the tax in New Hampshire to notify the attorney general’s office 45 days in advance. The office will then review the legality of the tax and can file suit if it believes the request is unconstitutional.

Kuster and Pappas also have sponsored legislation to exempt businesses that generate less than $10 million in sales from collecting online sales tax.