Avalara : New Hampshire wants to be a DTC alcohol shipper – Wacky Tax Wednesday

Although alcohol purchased at a New Hampshire State Liquor Store or other in-state retailer is tax free, direct-to-consumer (DTC) alcohol shipments into New Hampshire are subject to an 8% fee.

I discovered this after sending some wine to my brother, who lives there. The California retailer had listed a 'sales tax' on the receipt, and knowing New Hampshire to have no sales tax on alcohol, I asked about it. The friendly sales associate didn't quite know what to call it, but knew they had to collect it from me.

This surprised me because New Hampshire has been so vocal in its opposition to the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc. (June 2018), and subsequent remote sales tax laws in other states.

Prior to the Wayfair decision, states couldn't require a business to register then collect and remit sales tax unless it had a physical presence in the state. Wayfair overruled the physical presence rule, effectively authorizing states to base a sales tax collection obligation on economic activity alone, or economic nexus. (Physical presence still establishes nexus, but it's no longer the sole requisite.)

Plenty of people are unhappy about the Wayfair decision and the flood of economic nexus laws it unleashed. In fact, business owners and lawmakers in some states are pushing for Congress to limit state taxing authority. New Hampshire has fought against remote sales tax laws harder and longer than other states.

The New Hampshire Department of Revenue Administration advises New Hampshire businesses to alert the state Department of Justice (DOJ) if they're 'contacted by another state or locality regarding the collection of sales or use tax,' so the DOJ can determine the legitimacy of the request. And state and local tax authorities must provide written notice to the DOJ before taking any action to require a New Hampshire business to collect and remit their sales tax.

So, you can understand my surprise upon learning that New Hampshire requires direct shippers from other states to pay an 8% fee on the retail price of alcohol shipped to New Hampshire consumers, like my brother.