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Veto Stands in Hawaii

The House of Representatives did not override the Governor’s veto of SB1678; SB1678 included amendments to bring Hawaii into conformity with the streamlined sales tax agreement. This means the Governors veto stands. It can also be confirmed that there was no override of the Governor’s veto of HB1405. Thank you to the Honorable Carol Fukunaga for confirming this information.

While Internet marketers in Hawaii may breathe a temporary sigh of relief as they look forward to being reinstated by Amazon and other merchants, our long term problems are not solved. We still face these same challenges in other states and, next year will probably see an escalation in actions in all states with a sales and use (or excise) tax. The simple reason is that technology has changed the way we shop. As such, whether we like it or not, sales tax laws will change.

The Streamlines Sales Tax Project is a step in the right direction but it is not ideal. It still presents challenges for both merchants and states. In addition because it has not been adopted by all states, it is not a complete solution.  The adaptation of the SSTA is complicated and it takes years for a state to make all the necessary changes. Large states such as New York have additional challenges and they do not see it as practical. It has also not been accepted on a Federal level.

What is needed is Federal action; either tax or don’t tax Internet sales. The mixed standards do not level the playing field. New York and Rhode Island Internet marketers are at a distinct disadvantage as our states have instituted ‘modern’ nexus laws. Whether the playing field between online  stores and brick and mortar stores has been leveled remains to be seen. When advertisers/affiliates are removed from programs in NY and RI in order for a merchant to remove a nexus it seems to me the field is not leveled.

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