Senate Votes to Block Mass. Sales Tax Collection in NH

CONCORD – The Senate voted unanimously today in support of a bill to protect New Hampshire retailers from having to collect sales tax on behalf of another state.

Senate Bill 5 was a direct response to a Massachusetts proposal to collect taxes on purchases made in New Hampshire by Massachusetts residents.

“This bill clarifies New Hampshire’s sovereign right to its tax policy. The prohibition of a sales tax on New Hampshire businesses is an integral part of the state’s overall economy and pro-business environment,” said Senator Maggie Hassan (D-Exeter), the bill’s lead sponsor.

Republican Leader Peter Bragdon (R-Milford) agreed. “Not having a sales tax is an important facet of our state’s overall economy and our pro-business environment. Now other states are trying to force New Hampshire businesses to collect what amounts to a sales tax, thus eroding the New Hampshire advantage. This bill sends a strong message to our retail businesses that the New Hampshire Senate will fight for them,” he said.

Because of federal law, the state can’t ban sales tax collection but it can prohibit New Hampshire retailers from disclosing private customer information to other states seeking to collect a sales or use tax.

The legislation has the strong support of Governor John Lynch and the state’s retailers. Both the Greater Nashua Chamber of Commerce and the Retail Merchants Association of New Hampshire testified in support of the bill earlier this week.

Senate Bill 5 now heads to the House. If passed, it would go into effect immediately after being signed into law by the governor.