Sales tax proposed in tax-free New Hampshire

Few people like a new tax or a tax increase, but some dislike them more than others. That’s the case with New Hampshire. One of just five states with no statewide sales tax, many in the Live Free or Die State are vehemently anti-sales tax.

After the Supreme Court of the United States decided physical presence is not the sole requisite for sales tax collection (South Dakota v. Wayfair, Inc., June 21, 2018), New Hampshire Governor Chris Sununu said any state that tried to force New Hampshire businesses to collect their sales taxes would be in for “the fight of their life. ” He wasn’t kidding. The state remains intent on making life difficult for states that try to impose a tax collection obligation on New Hampshire businesses.

Yet not everyone in New Hampshire agrees that all sales taxes should be avoided. In fact, Representatives Skip Cleaver and Mark King have introduced a bill that would establish a 4.3% tax on the retail sale of electronic devices.

House Bill 1492 would require every vendor of the following electronics products to collect tax from purchasers:

• Cell phones and smartphones and related equipment
• Computers and related equipment (e.g., hardware and software)
• Smart watches and similar products and related equipment
• Television sets and related equipment
• Video games and all related play systems and equipment

Why electronic devices? Cleaver reportedly believes that “‘what makes us stupid as a society’ should help pay for education.” If approved, revenue generated by the tax would fund education.

But that’s a big if. The New Hampshire Retail Association is “ready to fight” the bill and has already asked the House Ways & Means Committee to kill it. The state’s main newspaper, The Union Leader, has also criticized it.

Still, it could happen. In Oregon, another sales tax-free state, there’s now a tax on sales of bicycles and many motor vehicles.

In the event New Hampshire does end up with a retail sales tax on certain electronic devices, would it require remote sellers to collect it? If it does, you’ll be able to read about it in the Avalara blog.