Illinois’ tax could be N.H.’s gain

In New Hampshire’s quest to welcome business and job creation to our state, other states may be presenting us an opportunity on a silver platter.Last year Congress considered legislation to allow states to require “remote sellers” to collect another state’s sales tax. This was because a number of states had adopted the “streamlined sales tax,” which addresses court decisions about the constitutionality of such a requirement.Though last year’s effort gained more traction than in prior tries, Congress never took up the bill. Sen. Dick Durbin, D-Ill., will make another run at the effort this year, but proponents haven’t come up with a solution to the problem of non-sales tax states like New Hampshire, and the current political climate makes prospects for passage of new taxation virtually nil. So a number of states this year are pursuing what New York did recently: enact legislation referred to as the “Amazon bill,” which would establish that any remote seller’s relationship with an “affiliate” in the state fits the definition of nexus, and therefore the remote seller may be required to collect the tax.This year Illinois passed similar legislation. Illinois stands out as home to a number of websites designed to direct shoppers to an actual retailer’s site, including coupon aggregators. This new law says that any businesses conducting sales online with more than $10,000 in sales via such arrangements are deemed under the law as “retailers maintaining a place of business in Illinois” and are required to collect the Illinois sales tax.A mere advertisement on a website based in Illinois would meet the definition. The websites at issue aren’t just the sites with locally relevant information but include major websites that just happen to be based in that state.In a guest editorial for an Illinois newspaper, Tim Storm, owner of FatWallet.com, based in Illinois, says “out-of-state retailers will simply cut ties with locally owned companies like FatWallet.com and affiliate with another online advertiser. Illinois will collect no more tax from its residents, but will lose precious jobs.”FatWallet.com is by no means the only company of this nature based in Illinois. That state is also home to well-known sites such as groupon.com, couponcabin.com and discovercard.com/shop, along with lesser-known sites such as mychristmasgiftideas.com, gourmetfoodgarden.com and wemakeitinamerica.com.Storm went on to predict that many of the companies like his, with 50 employees, will move their jobs to other states, and take with them an estimated $18 million in state tax revenue.Illinois is not alone in passing this legislation. Five other states have enacted laws requiring out-of-state retailers to collect sales taxes if they have online affiliates in the state. Another eight states have legislation pending this year that would create the requirement.New Hampshire has no intention of enacting a sales tax, and therefore will have no reason to pass legislation regarding affiliates, making our state, with its vibrant high-tech community and attractive way of life, a haven for FatWallet.com and others. New Hampshire should embark on a campaign to bring them here.Curtis J. Barry, an associate with The Dupont Group, a Concord-based lobbying firm, can be reached at cbarry@dupontgroup.com.