US Supreme Court opens door to out-of-state sales taxes

On Thursday, June 21 the U.S. Supreme Court overturned a previous ruling that stopped states from charging sales tax for online purchases.

That means retailers in New Hampshire might have to add sales tax anytime someone from a state with a sales tax buys something online.

Opening the door to online sales tax

In earlier rulings the Supreme Court held that unless a store has a physical presence in a state, the state cannot force the store to collect its sales tax.

In the new ruling, South Dakota v. Wayfair, Inc., the court held that online sales have transformed the economy, and it’s unfair to states and brick-and-mortar stores to let online retailers operate tax-free.

What does this mean for NH retailers?

While the ruling opens the door to new sales tax requirements, each state will need to review its laws and rules before requiring retailers to collect sales tax online. For example, the South Dakota law in the U.S. Supreme Court case only requires retailers with a large amount of sales to South Dakota residents to collect sales tax. New Hampshire businesses might need to purchase software to track all the various sales tax requirements in different states.

Congress could also pass a law regulating the collection of sales tax across state lines.

New Hampshire elected officials have pledged to fight burdensome requirements for New Hampshire businesses.

“The thousands of small businesses that drive our economy must not be forced to become tax collectors for other states. I am working with state leaders to determine a path forward aimed at defending New Hampshire’s business community from this modern-day taxation without representation scheme.”

- Taylor Caswell, Commissioner, NH Department of Business and Economic Affairs

Do you have an opinion on the U.S. Supreme Court ruling? Share your thoughts in the comments below.