Today, Congresswoman Annie Kuster (NH-02) has brought together both Democrats and Republicans to call for a one-year moratorium on the implementation of an online sales tax for small businesses. The bipartisan call to Speaker Ryan and Leader Pelosi outlines the serious consequences the implementation of an online sales tax would have on small businesses in New Hampshire and across the country. The letter, signed by Representatives Carol Shea-Porter (NH-01), Don Young (AK-AL), Peter A. DeFazio (OR-04), Greg Gianforte (MT-AL) and Suzanne Bonamici (OR-01), also highlights the importance of a moratorium so that Congress can consider ways to permanently protect small businesses. An online sales tax would subject New Hampshire small businesses to more than 9000 separate tax jurisdictions across the country. 

“As the House of Representatives works towards the conclusion of the 115^th Congress, we request that any end-of-year legislation include a one-year moratorium for small businesses to collect and remit sales taxes as a result of the June 2018 South Dakota v. Wayfair, Inc. Supreme Court decision,” wrote the members. “This decision has put a tremendous strain on small businesses across the country and has given them, in some cases, only six months to collect taxes from over 9,000 tax jurisdictions in the United States. The inclusion of a one-year moratorium on collections would ensure that small business owners and workers will have time to fully comply with the law and remove uncertainty within the business community.”

Kuster is a cosponsor of H.R. 6824, the Online Sales Simplicity and Small Business Relief Act, bipartisan legislation that would include an exemption for small businesses that generate less than $10 million in annual U.S. online sales. Kuster has been a vocal opponent of efforts to impose an online sales tax and joined a brief urging the Supreme Court to reject South Dakota’s effort to impose sales tax across state lines.

The full text of the letter is available here and below.

December 7, 2018  

The Honorable Paul Ryan                                                                 The Honorable Nancy Pelosi

Speaker                                                                                               Minority Leader

House of Representatives                                                                   House of Representatives

H-232, U.S. Capitol                                                                            H-204, U.S. Capitol

Washington, D.C.  20510                                                                   Washington, D.C.  20510

Dear Speaker Ryan and Leader Pelosi,

As the House of Representatives works towards the conclusion of the 115^th Congress, we request that any end-of-year legislation include a one-year moratorium for small businesses to collect and remit sales taxes as a result of the June 2018 South Dakota v. Wayfair, Inc. Supreme Court decision. This decision has put a tremendous strain on small businesses across the country and has given them, in some cases, only six months to collect taxes from over 9,000 tax jurisdictions in the United States. The inclusion of a one-year moratorium on collections would ensure that small business owners and workers will have time to fully comply with the law and remove uncertainty within the business community.

As a result of the Supreme Court decision, states have established new laws and regulations that will provide guidelines for small businesses on how to collect sales tax from out-of-state businesses. With some states imposing implementation dates as soon as January 1, 2019, small businesses have been given only six months to comply with this new tax collection regime which is labor intensive and costly for many small businesses that operate on thin margins. Furthermore, this transition will take place during the middle of the holiday season where both brick and mortar and online retailers see an influx of business.

Prior to the South Dakota v. Wayfair, Inc. decision, several pieces of legislation were introduced in Congress that considered the enactment of an internet sales tax. Most notably, the Marketplace Fairness Act and Remove Transactions Parity Act both included a delayed phase-in period to ensure that small businesses had time to fully comply and understand the new tax environment they were operating in. We believe that the enactment of a one-year collection moratorium would reflect these policies and provide small businesses with a realistic time frame to be complaint.  A moratorium would also give Congress the time to assess the need to provide permanent relief for small businesses from the misguided Wayfair ruling.    

In addition to this short time frame, some states may attempt to seek retroactive tax collection which would create more red tape for small business owners and reduce their bottom line.  Small online retailers have unique challenges when it comes to expanding their businesses, and a retroactive tax would impair their ability to grow and create jobs. We believe that a statutory ban on retroactive state sales tax collection would provide much needed certainty for small businesses.      

Thank you for your consideration of this matter, and we look forward to working with you to provide small businesses across America with certainty as we enter the busy holiday season.   

Sincerely,

  Ann McLane Kuster

   Member of Congress  

Don Young                                                                                         Carol Shea-Porter

Member of Congress                                                                          Member of Congress

Peter A. DeFazio                                                                                Greg Gianforte

Member of Congress                                                                          Member of Congress

Suzanne Bonamici

Member of Congress

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