New Hampshire, along with Alaska, Delaware, Montana, and Oregon, is one of five states with no state sales tax. Therefore, if you are selling goods or products over the Internet to customers located in New Hampshire, sales tax for those customers should be a non-issue.
However, the federal government is now considering legislation that would affect large Internet retailers and how online sales taxes are collected in all states. The proposed federal law, called the Marketplace Fairness Act of 2013, would allow states to require sellers not physically located in their state to collect taxes on online and catalog sales made to people in their state. Sellers that make $1 million or less in annual sales and have no physical presence in the state would be exempt from this requirement. States would have to meet certain criteria to simplify their sales tax laws and make sales tax collection easier before they could require sellers to collect the tax. Internet sellers in New Hampshire with sales of over $1 million would have to start collecting sales tax on sales made to customers in other states under the new law.
Below is an article on the current rules on Internet sales tax in New Hampshire. The new federal law scheduled to be voted on in May 2013 would affect all state Internet sales tax laws so be sure to check for updates in this area. (We will continue to keep you updated as well.)
Sales Tax Statement from New Hampshire’s Taxing Authority
The New Hampshire Department of Revenue Administration has a webpage containing the very simple statement that “New Hampshire does not have a general sales tax . . . .” (The same statement goes on to mention there is also no state income tax on employee wages.)
The same webpage also lists the taxes that New Hampshire does have; however, it is extremely unlikely that any of those taxes would be relevant to an out-of-state Internet retailer.
For States That Do Have Sales Tax
The current default rule throughout the United States is that you must collect sales tax on Internet sales to customers in those states where your business has a “physical presence”—assuming, of course, that the state involved has a sales tax. The physical-presence rule is based on a 1992 United States Supreme Court decision, Quill Corp. v. North Dakota, that addressed the obligations of mail-order businesses to collect sales tax on out-of-state sales; the decision has been extended to include online retailers. Generally speaking, a physical presence means such things as:
- having a warehouse in the state
- having a store in the state
- having an office in the state, or
- having a sales representative in the state
As you might expect, the corollary to the physical-presence rule is that, if you do not have a physical presence in the state, you generally are not required to collect sales tax for an Internet-based sale to someone in that state.
However, because New Hampshire has no sales tax, these rules are not relevant to sales you make to New Hampshire customers.
An Issue for New Hampshire-based Internet Businesses
If you are based in New Hampshire, and are doing a lot of business, you may already be aware of pending federal legislation that would require large New Hampshire Internet retailers to collect sales tax in other states. As reported both in a leading New Hampshire newspaper and Businessweek, the proposed law is contentious, and New Hampshire representatives in the House and Senate strongly oppose it.
If you find yourself wondering if anything has changed regarding New Hampshire sales tax, you can always check the New Hampshire Department of Revenue Administration’s website. For more general information on taxes on Internet sales, see Nolo's article Sales Tax on the Internet. And, for information on the rules about collecting sales tax for Internet sales in any other state, see Nolo’s article, 50-State Guide to Internet Sales Tax Laws.