Online shopping sales tax legislation in response to South Dakota v. Wayfair
The Supreme Court of the United States ruled in South Dakota v. Wayfair, Inc. earlier this summer that a state could collect sales taxes from online businesses located outside of its borders selling to customers inside the state. Now that the case is behind us, how are state governments reacting?
Three states have responded in the last month by voting on related legislation.
New Jersey: Legislators fast-tracked a bill that would require online sellers that do at least 200 sales or collect $100,000 worth of sales in New Jersey to collect sales tax. The bill, which passed both chambers, would take effect on October 1, 2018. The state's independent, nonpartisan General Accounting Office estimated that the tax would bring in between $216 million and $351 million in annual revenue. The legislation is awaiting Gov. Phil Murphy’s (D) signature to become law. New Jersey is a Democratic trifecta.
More on this year's New Jersey legislative session→
Utah: Gov. Gary Herbert (R) signed SB 2001, which requires online companies that reach the 200 sales or $100,000 worth-of-sales threshold in Utah to collect sales tax beginning in 2019. It also ends an agreement between the state and online businesses that allowed the businesses to keep up to 18 percent of collected sales taxes. Officials predicted the state to generate an additional $60 million as a result of the law, much of which was earmarked as tax breaks for local manufacturers. Utah is a Republican trifecta.
More on this year's Utah legislative session→
New Hampshire: A bill to implement procedures for out-of-state tax jurisdictions collecting sales taxes from New Hampshire businesses failed to pass the New Hampshire General Court on July 25. The proposed legislation would have implemented procedures for out-of-state tax jurisdictions attempting to collect sales taxes from businesses located in sales-tax-free New Hampshire that sell products online. After the state Senate unanimously approved the bill, the House passed an amendment in a bipartisan 164-151 vote that removed all but one provision, which would have created a commission to study ways to protect the state's no-sales-tax advantage. The House vote surprised senators, who voted unanimously not to concur with the amendment. New Hampshire is a Republican trifecta.
More on this year's New Hampshire legislative session→
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