NH's US senators oppose Internet sales tax bill

CONCORD, N.H. (AP) -- U.S. Sen. Kelly Ayotte says New Hampshire's traditional rejection of a sales tax is being trampled by a bill speeding through her chamber.

The U.S. Senate voted 74-20 Monday to take up the bill, which would empower states to require online retailers to collect state and local sales tax for purchases made over the Internet. The taxes would be sent to the states where a shopper lives.

Ayotte, a Republican who has been one of the bill's most vocal critics, calls it a massive power grab that will turn online businesses owners into tax collectors for other states. She argues federal legislation shouldn't impose burdensome tax collecting requirements on businesses, especially in New Hampshire, which has no general sales tax and thus no structure for collecting it for other states.

"It is going to make online businesses the tax collectors for the nation," she said Monday. "It really tramples on the decision New Hampshire has made not to have a sales tax."

Sen. Jeanne Shaheen, a Democrat, also opposes the bill. She missed Monday's vote because of a delayed flight but plans to file amendments to the bill that would protect businesses in New Hampshire and other states that don't have sales taxes, her office said Tuesday.

That didn't satisfy Republicans, who were quick to criticize Shaheen for missing the vote.

"Considering Senator Ayotte was present for the vote, Senator Shaheen's excuse leads one to question just how important protecting the New Hampshire advantage truly is to her," said Derek Dufresne, spokesman for Citizens for a Strong New Hampshire.

Under current law, many online sales are essentially tax-free because states can only require stores to collect sales taxes if the business has a physical presence in the state. Supporters of the bill, which could pass the Senate as early as this week, would lessen the advantage Internet retailers have over brick-and-mortar stores. Businesses with less than $1 million a year in online sales would be exempt, but opponents say the bill still doesn't have enough protections for small businesses.

Both Ayotte and Shaheen joined with senators from several other states Monday in sending a letter to Senate Majority Leader Harry Reid about their concerns with the bill and asking him to reconsider allowing the bill to come up for a vote without the usual committee process.

"This bill will result in crippling compliance costs on small Internet businesses," they wrote. "At a time of tepid economic growth, Congress should enact measures that are designed to promote innovation and entrepreneurial risk-taking; its priority should not be to look for creative ways to plug state budget holes."