Rising Massachusetts Sales Tax May Be Good for New Hampshire

The Mall at Rockingham Park in Salem isn’t all that busy mid-day on a Monday in July.

But judging by license plates, the mall gets a good number of shoppers from Massachusetts.

Eva Kennedy drove up from Haverhill and said she doesn’t like sales tax hike about to hit the Bay state.

I have a big problem with it going up so much. I’m not going to do any business down there if I don’t have to.

Other Massachusetts customers say they’re already coming to New Hampshire to do some of their shopping.

Clair Abisalih of Merrimack, Massachusetts says she buys a variety of things when she comes here.

Mostly clothes and technology especially bigger items that I know are going to be expensive like my laptop I’ll definitely try and avoid the exorbitant taxes on it by driving up here.

A spokesman for retailers in Massachusetts says stores in his state are already at a disadvantage competing against those in New Hampshire.

John Hurst heads the Retailers Association of Massachusetts and says even without a tax hike, things don’t look so good.

You know its literally billions with a b that currently are leaving Massachusetts and going to either new Hampshire or the internet. And a twenty five percent increase in the sales tax is only going to make that situation worse.

Several retailers in southern New Hampshire say they already see a significant share of customers from Massachusetts.

David Garofalo is a co-owner of Two Guys Smoke Shop in Salem, a specialty cigar store.

He says 90 percent of his customers are from south of the border.

If you look outside in the parking lot you’ll notice there’s a lot of Massachusetts plates. If you come by on a weekend especially we’re loaded with Massachusetts customers….

Garofalo says his customer mix is heavily weighted with Massachusetts customers because aside from a sales tax, customers there pay a 30 percent cigar tax as well.

A car dealer down the street is also having a good season.

Salem Ford Hyundai is less than a mile from the Massachusetts border.

General Manager Tanya Pulakowski says many customers come from out of state, and she’s heard the rising sales tax is convincing some to come north.

I think some people are. I’ve heard it quite a bit this weekend that we had that people are trying to get in before that increase in the sales tax.

New Hampshire officials say they really can’t estimate how much money might flow to the treasury when the Massachusetts sales tax goes up.

But it could mean more revenues, because successful businesses pay more in taxes to the state as they grow and make more money.

What happens in New Hampshire certainly isn’t lost on lawmakers on Beacon Hill.

When the Massachusetts state senate debated raising the sales tax, Senator Richard Moore , a democrat from Uxbridge, predicted more customers would leave the Bay state.

Here’s what Senator Moore said to his colleagues, on the Senate Floor.

We’re going to see more erosion, unless we can figure out a way to perhaps build a wall that’s supposed to be in Texas along the Mexican border to build along the New Hampshire border, maybe that’s something our Congressional delegation should be asked to do because we’re going to have a problem with the flow north of the traffic.

Massachusetts lawmakers raised the tax because of a budget shortfall caused by the slumping economy.

The weak economy has also affected New Hampshire’s tax receipts and many businesses.

Still, the Bay State’s tax hike may help put a little more into New Hampshire’s treasury.