The New Hampshire Senate unanimously approved S.B. 242 last week, a bipartisan bill that aims to protect state businesses from the effects of last year's Wayfair decision, which allows states to impose sales and use tax regulations on e-retailers and other out-of-state sellers that do not have a physical presence in the state but that do meet dollar or transaction thresholds that create an economic nexus.
In a 5-4 decision, the Supreme Court ruled today that states may now require online retailers to collect sales taxes from consumers, regardless of where the business is located or the product is delivered. In 1992, the same court ruled that a business had to have some kind of "physical presence" or "nexus" in order to be required to collect sales tax in a state. With the increased use of online shopping, however, it turns out not all taxpayers report non-taxed purchases to the states in which they reside. In fact, an estimated $33.9 billion goes uncollected in sales taxes each year, costing states a significant sum. Additionally, internet shopping tax-free has hurt the brick-and-mortar stores that already have higher operational costs due to a physical presence in a state, since they must collect sales tax on taxable transactions.