Cross-Border Tax Grab Thwarted

At least one state is acting to head off a cross-border tax grab.

New Hampshire Gov. John Lynch has signed a bill intending to protect retailers from becoming tax collectors for other states.

New Hampshire doesn't have a general sales tax, a selling point it uses to attract out-of-state retail dollars.

The bill was filed in response to action Massachusetts took against a Connecticut-based tire store chain. Massachusetts attempted to collect $108,000 in "use" taxes from Town Fair Tire for sales it made to Massachusetts customers at its New Hampshire stores.

Many years in the past the Massachusetts Department of Revenue sent agents across the border into New Hampshire to watch and record the license plate numbers of cars from Massachusetts purchasing goods in New Hampshire and then having them stopped once they crossed back into Massachusetts in order to access the use tax. Then-governor Meldrim Thomson had the New Hampshire State Police arrest the revenue agents and escort them back over the border, telling them they had no jurisdiction in New Hampshire and warned them not to return.

The lack of a sales tax in New Hampshire has peeved the powers-that-be in Taxachusetts, the Pay State, for years. With the recent increase in the Massachusetts sales tax from 5% to 6.25%, even more Massachusetts resident are crossing the border to save money.

Can you blame them?

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