UL Editorial: Norelli’s sales tax: Big blow to NH business

Published Sep 12, 2011

When Massachusetts tried to have tire stores in New Hampshire collect and remit sales taxes to Massachusetts every time Bay Staters bought tires in New Hampshire, Gov. John Lynch intervened. He got that turning New Hampshire businesses into tax collectors for other states would seriously damage the New Hampshire Advantage. House Democratic Leader Terie Norelli, on the other hand, has no problem with New Hampshire businesses collecting sales taxes for other states. In fact, she’s working hard to make that happen.

This summer, Norelli was elected president of the National Conference of State Legislatures. When sworn in, she will head an influential organization that works on behalf of all state legislatures to pass generally left-leaning legislation that favors states, often by raising revenue. As president-elect of the NCSL, her loyalties already have been divided.
When elected in early August, Norelli said, “I am honored to work on behalf of all state legislatures.” She is not supposed to simultaneously stop working on behalf of her New Hampshire constituents, but on at least one issue she has.

On Aug. 31, the NCSL sent a letter to Congress urging leaders to take steps to help states reduce their budget deficits. One of those steps was to pass the Main Street Fairness Act. That is a bill, proposed by liberal Democrats, that would allow states to collect sales taxes on online purchases in other states. Currently, federal law does not allow this.

Today, a buyer anywhere in the United States can order New Hampshire maple syrup online from a New Hampshire vendor, and the buyer pays no sales taxes on it because New Hampshire has no sales tax. If the Main Street Fairness Act becomes law, New Hampshire businesses will have to collect sales taxes every time a customer from a state that has one buys something online from a New Hampshire merchant. They will then have to remit those taxes to the states where their customers reside.

Anyone can see what a burden that would put on New Hampshire businesses, and how it could harm the New Hampshire Advantage. Anyone except Terie Norelli, who signed the NCSL letter urging passage of that law. Why she would want to turn New Hampshire businesses into tax collectors for 45 other states is something her constituents should ask her.

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