If you are one of those 45 states that are not New Hampshire that may ask a business based here (with no presence there) to collect your sales taxes for you prepare to pay the price. Literally.
For starters, any taxing jurisdiction, before they can approach a New Hampshire business and say, “I think you have sold something to one our residents, pay up,” that taxing jurisdiction will first have to register with the New Hampshire Attorney General and pay a fee.
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The NHPR reporting also notes that,
Then, it will have to prove to the Attorney General’s office that its sales tax is constitutional, that is complies with all laws, and that it isn’t unfairly targeting a small business.
And then finally, if the tax collection is deemed lawful, the business will be allowed to recoup whatever costs it incurred in collecting that tax. So, it the business had to buy special software to compute all these taxes, that sort of expense will be removed from the tax bill.
States that come knocking must present themselves to the state AG, prove they have the legal circumstances to ask for the collection, and then reimburse the business for the cost of collecting their tax.
Brilliant.
Court challenges are imminent, but there are no blanket prohibitions nor does the bill ban or prohibit another state from “collecting” taxes. You just have to pay the “processing and handling fees” which might not make it worth your time unless we’re talking about a lot of taxes.
Repercussions? I can’t think of anything off the top of my head that taxing states could do as retribution but if the legislature passes it (which it looks like it will) and Gov. Sununu signs it (immediately, I suspect) we will see what we will see.
And no. I’m still not a fan of regulatory steeplechases. They beget similar strategies and retaliation from the offended parties. But I am a fan of seeing how the marketplace reacts and what the courts have to say, and as noted here, I understand all the motivations.
Let the ‘fun’ begin.
