Sales Tax in NH – A Constitutional & NH House take on S. Dakota vs Wayfair SCOTUS decision

Recently, the Supreme Court of the United States (SCOTUS) handed down an opinion in the South Dakota versus Wayfair (SD v Wayfair). The South Dakota Legislature had passed a law that enabled South Dakota to go after taxes on purchases citizens had made from Wayfair. The S. D. Supreme Court held that the law was unconstitutional, and it was appealed to SCOTUS. Previously, SCOTUS had held the opinion that no taxes could be collected if the retailer had no substantial physical presence in the State seeking the tax revenue.

Parallel to this an organization has grown up.

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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.

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