N.H. files brief against Internet sales tax in Supreme Court case

Gov. Chris Sununu ... such a tax amounts to 'taxation without representation' (Courtesy photo)

CONCORD - The governor today announced that the State of New Hampshire has submitted an amicus brief to the United States Supreme Court in the case of South Dakota v. Wayfair, Inc. In its brief, the State urges the court not to overrule existing precedent in a manner that would expose New Hampshire citizens and businesses to out-of-state sales taxes.

"It is unacceptable that New Hampshire businesses may be forced to act as tax collectors for other states. We will not sit idly by while Washington, D.C. and sales-tax reliant states try to raid the pockets of Granite Staters and increase the price of retail goods in New Hampshire," said Governor Chris Sununu. "That is the very definition of taxation without representation, and we will not stand for it. Overturning existing precedent in this case will put the nation on a fast-track towards unbridled taxation of the Internet and may force certain businesses and persons to cease doing business over the Internet altogether. That should not be permitted to occur."

For over 50 years, the U.S. Supreme Court has appropriately restricted state authority to impose sales and use taxes on businesses and persons that operate outside of their borders. In doing so, the United States Supreme Court has held that, in order for a State to impose a sales or use tax on a business or person selling retail goods, that business or person must have some "physical presence" in the taxing state.

In open defiance of this well-settled precedent, South Dakota enacted a law requiring a seller that "does not have a physical presence in the state" to collect and remit sales taxes to it. South Dakota passed the law knowing that it would spark a court challenge that would likely make its way to the United States Supreme Court.

Earlier this year, the Court agreed to hear the Wayfair case. It presents a single issue: should the "physical presence" requirement for sales and uses taxes set forth in a 1967 U.S. Supreme Court decision, National Bellas Hess v. Department of Revenue of Illinois, and reaffirmed in a 1992 U.S. Supreme Court decision, Quill Corp. v. North Dakota, be overturned.

In its brief today, New Hampshire argues that it should not.

"There are approximately 10,000 to 12,000 different sales and use tax jurisdictions in the United States today. Countless small businesses use the Internet for the retail sale of goods. The monetary amounts are often quite modest. It is manifestly unreasonable and unfair for these businesses to have to invest in expensive software and professional services in order to collect, account for, and remit sales taxes to other States and localities or otherwise subject themselves to potential civil and criminal penalties," said Attorney General Gordon MacDonald who made the joint announcement along with the governor. "New Hampshire's citizens have chosen through their elected representatives not to impose a sales tax on retail goods and should not be forced to shoulder the burden of other state sales taxes."