Wayfair has changed the sales tax landscape, but five states have no sales tax. New Hampshire responded to what it views as an unfair cost being imposed on its businesses through new legislation.
Wayfair has changed the sales tax landscape, but five states have no sales tax. The acronym NOMAD (New Hampshire, Oregon, Montana, Alaska and Delaware) is a handy way to remember them. NH responded to what it views as an unfair cost being imposed on its businesses through new legislation.
The law purports to protect NH remote sellers by (1) requiring any state taxing authority seeking to audit or collect tax from a NH business to notify the NH Department of Justice (DOJ) prior to doing so; (2) the DOJ is directed to conduct a review to determine if other state’s imposition of a sales tax collection obligation is permitted under both the U.S. and New Hampshire Constitutions and allows the DOJ to file suit to block any taxation; and (3) NH businesses determined to be required to collect out of state tax have the right to recover reasonable collection costs from the out of state taxing authority. Lastly, NH businesses can opt out and voluntarily comply with another state’s tax laws.
NH’s goal appears to be to ward off out of state collection efforts by requiring notification and threatening litigation while working to litigate another sales tax case before the U.S. Supreme Court. The hope is, the U.S. Supreme Court might provide relief for businesses, like those situated in NH that now have a sales tax compliance cost. By allowing for voluntary compliance, NH taxpayers can avoid notices and collection efforts as the above plays out.
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