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Ayotte Leads Fight Against Renewed Efforts to Pass Online Sales Tax

Majority Leader Circumvents Committee Process, Rushes Bill to Floor for Monday Vote

Apr 19, 2013

WASHINGTON, DC - U.S. Senator Kelly Ayotte (R-NH) today said she would fight renewed efforts to rush legislation through the Senate that would impose new, onerous sales tax collection requirements on Internet retailers. The Senate Majority Leader this week used a procedural maneuver to circumvent the committee process and speed up consideration of online sales tax legislation, and he indicated today that the Senate will vote on Monday whether to begin debate on the measure.

"Supporters of this online sales tax bill are trying to muscle it through before senators find out how disastrous it would be for businesses in their states," said Senator Ayotte. "I will fight this power grab every step of the way to protect small online businesses in New Hampshire and across the nation."

Last month, Senator Ayotte voted against an amendment to the Fiscal Year 2014 budget resolution that aimed to force online retailers to collect sales taxes for states in which they do not have a physical presence. The amendment passed, 75 to 24, but the underlying bill was non-binding and does not carry the force of law.

Senator Ayotte recently met with online retailers in Manchester and Portsmouth to discuss her strong opposition to the proposal, which she said is unfair to businesses in New Hampshire - a state that doesn't have a sales tax.

Senator Ayotte has worked diligently to protect New Hampshire Internet businesses from sales taxes. In addition to introducing a bipartisan resolution last year expressing the sense of the Senate that no federal legislation should give states the authority to impose any new burdensome or unfair tax collecting requirements on Internet businesses and entrepreneurs, she also posed tough questions to proponents of online sales tax legislation during a Senate Commerce Committee hearing last year.

Under current Supreme Court precedent, absent a sufficient connection, a state cannot force out-of-state Internet businesses to collect and remit sales taxes. For example, when a customer in Illinois buys a product from an online vendor based in another state that has no physical presence in Illinois, authorities in Illinois cannot currently compel the out-of-state vendor to send it the Illinois tax on that sale. However, cash-strapped states looking to plug budget holes continue to push for a new law that would force online retailers to collect sales taxes for jurisdictions nationwide.

In addition to Ayotte's efforts to protect New Hampshire's online retailers from having to collect sales taxes for other states, earlier this year she introduced the "Permanent Internet Tax Freedom Act" (S. 31), legislation that would prevent state and local governments from imposing new taxes on Internet access, and prohibit any multiple or discriminatory taxes on e-commerce.

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