The special session on Internet sales tax: "Why should NH grow its government without clear reason?" - Granite Grok

The special session on Internet sales tax: “Why should NH grow its government without clear reason?”

By Marc Abear, State Representative Belknap County District 2 (Meredith)

You deserve an explanation of what happened in the legislature this week. What has been in the papers is a lot of political posturing. Let me help you filter the noise from the message.

The Governor requested and the Executive Council authorized a special session of the NH legislature in order respond to the Supreme Court decision in the South Dakota vs. Wayfair case. At issue was the Supreme Court’s change of the physical presence test it had imposed in the Quill decision with respect to the commerce clause. The court in Wayfair removed the physical presence requirement of a business established in Quill in order for a state to require collection of “remote tax”.  In its place, it left an “economic nexus” standard. Nobody yet understands what exactly that means. The test was changed and the case was remanded to South Dakota where it has not yet been taken up.

The governor made the special session request of the executive council June 28th and the council by a 4-1 split vote authorized a special session. In the interim, a joint House-Senate task force made up of 7 Senators and 10 House members convened to put together language which has been improperly represented as a bill. The joint task force work could not be enrolled as a bill because the legislature was not in session and no rules were in place for dealing with the measure.

What happened in the House during the special session was that rules were adopted after floor amendments were brought forward and considered. The House then recessed until the Senate sent the house Special Session Senate Bill 1 which rewrote RSA 78 inserting a new section Chapter 78-E. The first amendment to SSSB1 changed the measure from what the joint committee had crafted and the Senate sent to the House for consideration to a study committee. It was introduced and it passed. A motion for reconsideration of the amendment was then made and it was defeated. What all that means is that the House may not by rule again consider action on this topic matter in this session of the legislature. Despite what the Senate or the Governor may think should happen the issue is dead for this session.

The reasoning that carried the day in the House where the measure received a majority of both democratic and republican Representatives present included a dash of political partisanship, a lack of demonstrated impact, a lack of demonstrated immediacy of need and questions of constitutionality at both the state and federal levels.

So while it is true that other states might target a NH business it begs the questions: What will it cost them to do so? What can they recover? Will the collection effort cover the cost of collections? How will they find their targets? Why should NH grow its government to ameliorate a fear that is not demonstrated to have significant basis?

The case for the size of the exposure is not made. The case for the immediacy of need to act is missing. The danger from unintended consequences appears to be high. Lack of deliberation increases the probability of unintended consequences. Clearly we should not be complicit in taxation without representation.

Everyone understands and agrees that the legislature is here to support the business community and the citizens of NH. The disagreement is about rushing to judgement and creation of unintended consequences in an area clearly within the province of Congress constitutionally.

(H/T: Laconia Daily Sun)

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