Massachusetts’s long tax arm

by Walter Olson on June 17, 2009

The state is suing the Town Fair Tire chain, saying its outlets in New Hampshire (a state with no sales tax) should have collected tax on Massachusetts residents’ purchases and sent it off to Boston on their behalf. It was supposed to know which customers these were by checking their cars’ license plates. [Daniel J. Flynn, City Journal] More: TaxProf covered the suit in February.

{ 6 comments }

1 John Burgess 06.17.09 at 6:22 pm

Back when booze was cheap in DC, the Commonwealth of Virginia used to use both paid informants and police cars at the border to nab Virginians saving money by buying in the District. The informants would sit outside packages stores to note large volume purchases going into cars with Virginia tags, then call a magic number and get a cash reward.

The story above suggests that MA is trying to get NH to pay for Massachusetts policing.

2 ras 06.17.09 at 6:55 pm

Can the push for interstate borders be far behind?

3 VMS 06.17.09 at 8:24 pm

Back in the late 70′s NH had official State liquor stores a hundred yards over the boarder with MA. MA State troopers would routinely sit at the border of NH and pull over all the MA plated vehicles who drove across the state line after purchasing low cost booze (compared to MA) in NH. NH became outraged at that practice and moved all their State liquor stores about a mile into NH. The MA State troopers then started entering NH to spy on purchasers for the purpose of arresting them as they entered MA. NH then arrested some MA troopers, MA relented and the practice stopped. I’m glad to see that the process is repeating. I remember another incident where I bought an alternator for my car in MA. The auto parts store charged a “core charge” of $25.00 in addition to the purchase price of the rebuilt alternator (to which 6.75% sales tax was added) to ensure that you would bring back the old alternator so that it could be rebuilt. When I returned my old alternator, I was expecting all of my money back. They gave me the $25.00 but not the sales tax. When I complained to the taxing authorities, they explained that when I “bought” the core from the parts store, that was a taxable sale. When I sold the core back, that was a non-taxable sale. I never bought another auto part with a core charge in MA. Rather, I waited to buy them in NY when I came back for holidays.
Maybe if MA eliminated its taxes, their merchants would be on a level playing field with NH and everyone would gain by a more vibrant economy.

4 Bill Poser 06.17.09 at 10:28 pm

There was a similar deal at the border between Quebec and Vermont. It used to be that fireworks were legal in Quebec but illegal in Vermont. There was a fireworks store about a mile before the US border. Someone (reportedly the store itself) would call in the license numbers to US Customs. (The claim was that the store got a kickback on this, though I can’t confirm this.)

5 james B. 06.18.09 at 9:09 am

I seem to recall in the mid-80s that PA police or liquor enforcement were doing this to MD and Maryland objected strongly, but at the same time MD authorities were hassling residents who were buying their booze in DC.

6 mojo 06.18.09 at 4:17 pm

“Not our job. You want to send somebody up here to read license plate for you, go right ahead.”

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