Sen. Jon Tester and a handful of lawmakers from non-stales-tax states are looking to overturn last month’s U.S. Supreme Court decision that reversed a 26-year precedent protecting businesses from collecting sales taxes for other states.
The court ruled last month in South Dakota vs. Wayfair that states have the authority to impose a sales tax on purchases made over the internet. As a result of the ruling, Tester said, local businesses will be required to collect the sales tax and send the funds to the state where the customer resides.
That doesn’t sit well in Montana, one of only a few states in the nation that doesn’t have a sales tax.
“Montanans oppose a sales tax and our businesses shouldn’t be forced to collect a sales tax to shore up the finances of other states,” Tester said. “This bill reflects the overwhelming sentiment of Montanans and defends our state’s businesses from getting into the sales tax business.”
In a push to overturn the court’s decision, Tester introduced the Stop Taxing Our Potential Act last week. Sens. Jeanne Shaheen and Maggie Hassan, both New Hampshire Democrats, and Sen. Jeff Merkley, D-Oregon, have signed on as cosponsors.
“Oregonians have rejected a sales tax time and time again,” said Merkley. “This bill stands up for the views of Oregon voters while protecting our small business owners from an unwanted burden.”
Montanans rejected a statewide sales tax at the ballot box by a 2-1 margin in 1971 and 1993. As a result of the Supreme Court’s decision, however, local businesses could be required to remit sales taxes to nearly 9,800 state and local tax jurisdictions across the United States.
The court’s decision was also unpopular in New Hampshire. That state, like Montana, doesn’t have a sales tax.
“New Hampshire’s small businesses, which are the backbone of our economy, have made clear that a mandatory internet sales tax collection requirement would negatively impact them by creating a complex web of red tape and hindering growth,” said Hassan. “This bill is critical to ensuring that businesses and consumers in no-sales-tax states like New Hampshire are not burdened by the Supreme Court’s decision to allow states to mandate internet sales tax collection.”