July 9, 2009 Lynch signs border sales tax protection bill Play video

(NECN: Lauren Collins, Manchester, NH) - New Hampshire Governor John Lynch has signed a bill intending to protect retailers from becoming tax collectors for other states.

A full bathroom remodel at Splash by Masi can carry a hefty price tag. A Massachusetts home owner can save hundreds of dollars at Bob Boisvert's Nashua-based store.

Earlier this year, the Massachusetts Dept. of Revenue went to court to force Town Fair Tire to pay more than $100,000 in use taxes for services performed for Bay State residents.

Today, New Hampshire Governor John Lynch stopped by the Boisvert's showroom to sign a new law that protects Splash, Town Fair Tire and all other businesses in tax-free New Hampshire.

The new law doesn't necessarily stop the tax man at the border, but it puts significant hurdles on Massachusetts. Everything from filing with the Dept. of Revenue in NH, to getting permission and an OK from the attorney general.

It also forces revenue officials to prove the store in question is subject to the tax, and that the items purchased are intended for use in the shopper's home state.

The law further requires Massachusetts, or any other state, to show audits sales the same way in all states, audits 10% of its use for tax payers annually and requires its residents to file annual statements on out-of-state purchases.

The law is critically important for border towns, like Nashua, Salem and North Conway, which have huge retail districts.