CLT UPDATE
Saturday, February 7, 2009
Another Border War Ahead?
Massachusetts has ordered a tire chain
to charge Bay State residents a 5 percent sales tax on their purchases
in New Hampshire in an unprecedented move that could have huge
implications for consumers and other merchants....
"This is a first-of-its-kind case," said Fred Nicely, general counsel of
the Council on State Taxation, a nonprofit trade association of
multistate corporations engaged in interstate and international
business. "There's huge ramifications to the entire retail community."
To others, it's a case of "Taxachusetts" striking back at the "Live Free
or Die" pride of New Hampshire. The Granite State has long lured
Massachusetts residents over the border to enjoy tax-free shopping....
Until now, consumers have been solely responsible for paying use taxes
for eligible purchases initiated and completed in New Hampshire when
filing their state tax returns. This isn't an issue in other border
states, like Connecticut and Rhode Island, because they charge sales tax
and there is less incentive for Bay State consumers to cross the border.
But many Massachusetts residents don't file use taxes, tax authorities
say, and individual violators are nearly impossible to detect. The
invoices and receipts kept by retailers, however, have made it possible
for the state to track down the customers' plans to use their
merchandise in the Commonwealth ...
The Boston Globe
Tuesday, February 3, 2009
State chases sales taxes in N.H.
The Commonwealth of Massachusetts is trying to turn New
Hampshire businesses into tax collection agents for the Massachusetts Department
of Revenue. To this, there is only one appropriate response from the state of
New Hampshire. It isn't "no." It's "Hell, no." ...
This case is about much more than Massachusetts tax law. It represents a direct
assault by the state of Massachusetts on the New Hampshire Advantage. It is
neither the first nor the last such attack, but it is the most aggressive and
the most legally dubious. If it is allowed to stand, no New Hampshire retailer
will be safe from the long arm of the Massachusetts tax collector. Gov. John
Lynch must not allow that to happen.
If the Massachusetts Supreme Judicial Court upholds this clearly
unconstitutional cross-border tax grab, Gov. Lynch should immediately dispatch
the National Guard to all six Town Fair Tire locations in New Hampshire and tell
Massachusetts Gov. Deval Patrick, "If you want that revenue, come and get it."
We are not joking. New Hampshire cannot let Massachusetts apply its taxes on our
sovereign soil. It can subjugate its own people all it wants, but it must not be
allowed to turn New Hampshire residents doing business entirely in the state of
New Hampshire into subjects of the state of Massachusetts.
The Manchester (NH) Union Leader
Wednesday, February 4, 2009
A Union Leader editorial
Thwart Taxachusetts: Forceful defiance is justified
How ironic it is that the state that once had the gumption to
start a war over unfair taxation imposed from afar is now trying to spread its
tax tentacles beyond its own borders.
That's right: Massachusetts, the state that boldly took on the tax-happy British
Empire, is now doing a little imperial number of its own. And instead of
depending on musket-toting militiamen, this time we're using hapless store
clerks as our frontline troops....
New Hampshire and Massachusetts have had their share of border brawls over the
years, and they never go well. At various times, Massachusetts State Police have
been dispatched to go "under cover" at such New Hampshire establishments as
state liquor stores and fireworks stores in search of Bay Staters. Granite
Staters fired back by arresting Massachusetts state troopers for "loitering" in
the liquor store parking lots. And now we're asking store clerks to do the same
kind of enforcement work?
A Newburyport Daily News Editorial
Friday, February 6, 2009
The cross-border tax grab
The fight against collection efforts north of the border by
the Massachusetts Department of Revenue now involves the New Hampshire
Legislature as well as the Bay State's top court.
Gov. John Lynch and Attorney General Kelly Ayotte announced yesterday that the
state will file a brief in a court dispute between Massachusetts officials and a
tire retailer with stores in both states. Today, Lynch said he favors a change
in state law to protect New Hampshire businesses from being required to collect
Massachusetts sales taxes.
"We need to send a clear message that Massachusetts and other states shall not
impose their sales taxes on New Hampshire businesses,” Lynch said....
Yesterday, Lynch and Attorney General Kelly Ayotte announced that New Hampshire
has filed a brief at the Massachusetts Supreme Judicial Court protesting efforts
to force Town Fair Tire Center to pay more than $100,000 in back taxes on sales
to Massachusetts residents at its New Hampshire stores....
"I think it is outrageous that Massachusetts erroneously believes it can impose
its sales tax here in New Hampshire," Lynch said. "We have chosen not to have a
sales tax here in New Hampshire and we are not about to let Massachusetts impose
its tax on our businesses."
The Manchester (NH) Union Leader
Friday, February 6, 2009
Lynch: NH merchants need legal protection
against Bay State taxation
Now given how cash-strapped state governments are, we can
understand why Massachusetts officials are looking to keep shoppers on their
side of the state line.
But, at the risk of sounding rude, that's their problem. And the solution
certainly isn't turning New Hampshire retailers into revenue agents....
Or, in the words of one of our more astute online contributors: "Does that mean
that a person who comes from a state without a sales tax would not have to pay
it in a state where they purchase something that has a sales tax?"
A Nashua (NH) Telegraph editorial
Friday, February 6, 2009
Court should reject sales tax challenge
A day after saying he was getting involved in a sales tax
case between Massachusetts and a tire vendor in his state, New Hampshire Gov.
John Lynch is proposing a bill to protect businesses from having to collect
sales taxes on behalf of the Bay State....
Lynch said Friday his state needs to send a clear message that Massachusetts and
other states shall not impose their sales taxes on New Hampshire businesses.
Associated Press
Friday, February 6, 2009
NH gov proposes bill against collecting taxes for MA
Mary Reese, chairwoman of the Greater Salem [NH] Chamber of
Commerce, said forcing local businesses to enforce Massachusetts tax law during
tough economic times would harm local businesses.
"My suggestion would be rather than attempt to harm our New Hampshire
businesses, which border Massachusetts, the commonwealth should adopt a less
burdensome tax structure, which helps their own consumers and businesses," Reese
said.
The Eagle Tribune
Wednesday, February 4, 2009
Bay State wants NH to collect its sales tax
Welcome to Taxachusetts. Open under new - er, make that old,
very old - management.
Last fall the hacks spent millions in public-sector union dues warning us that
if we voted to abolish the state income tax, they would have to raise all the
other taxes. Well, at least 30 percent of us voted to abolish the income tax,
and guess what - the hacks were telling the truth for once.
All our taxes are going up, at least if tax-crazed Gov. Deval Patrick gets his
way.
Now they want New Hampshire to collect sales taxes on Massachusetts shoppers....
Hey, Deval, one last question: When is that property tax relief you promised us
kicking in?
The Boston Herald
Wednesday, February 4, 2009
Still not buyin’ sales tax boondoggle
By Howie Carr
First, [Gov. Patrick] says he'll cut spending. What does that
mean to us? State aid to local governments, state colleges and court systems
will be cut; heat will hit local budgets. There isn't much talk about
restructuring government, modernizing the tax system or tackling the unions.
Higher taxes, the rainy-day fund and a grant from the federal government are the
other aspects of the Patrick "fix." You'll be surrounded by nit-picking taxes
and fees....
We have been spending imprudently for decades. The pattern has been unbroken:
Tax receipts rise, spending goes up; tax receipts go down; the new governmental
services, departments, etc. added during the good times are said to be
irreversible.
"Can't be cut," we're told.
So now there's panic! Until someone says, "We need to raise taxes!" Music to the
bureaucrats' ears!
And on it goes. And we, like placid puppies, allow it to continue....
The real fix doesn't begin with an Obama, or a Patrick. We must abide the people
in power for another two to four years. Then the real fix must begin. And you
are the ones to do it.
The technique? Easy! Everyone in office is out.
Vote against them. They don't get it. They are blind. As soon as a worthy
opponent appears, give him/her your vote. Continue until the bums are all out
and the princes are in.
The Salem News
Wednesday, February 4, 2009
Taxpayers must revolt
By Robert Kelly
Chip Ford's CLT
Commentary
Will the border between the
"Live Free or Die" state of New Hampshire and "The Peoples Republic of
Taxachusetts" soon become the next militarized hot spot on the world
crisis map, like the Gaza Strip in the Middle East? Will the
Beacon Hill Hamas continue lobbing its tax missiles over the border into
an innocent civilian population trying to just live and let live
peacefully?
In New Hampshire they refer
to themselves as citizens; they describe us down here across their
border -- among less complimentary terms -- as "subjects." They're
not far off. My description from down here: A majority of us
are witless fools as a whole who keep re-electing the government they
deserve, which as usual makes us the laughingstock of the nation.
Bacon Hill can't grab
enough from us, is thwarted. It is frustrated with the tax-free
sovereign state of New Hampshire so nearby. Were it not for New
Hampshire, Taxachusetts would by now have a 10 percent sales tax or
higher. Sales tax-free New Hampshire proscribes this extension of
Bay State lawmakers' natural urges. Even the pols recognize that
Taxachusetts does not exist in a vacuum, that its subjects can too
easily vote with their wallets and feet, slip over the border.
During the last
Taxachusetts border war incursion in the late-70s, the first Dukakis
administration inserted its troopers undercover to capture and
subject to rendition any subjects of His Commonwealth who crossed to
smuggle back contraband -- cheaper liquor and cigarettes, and fireworks! It took
then-governor Meldrin Thomson's NH state troopers to launch a
counter-offensive. He ordered his troopers to arrest and detain
this state's armed forces to halt their forays into his sovereign state.
Michael Dukakis backed off, blinked first -- withdrew his troops.
A reader of the Nashua
Telegram wrote of Taxachusetts' most
recent incursion: "Does that mean that a person who comes
from a state without a sales tax would not have to pay it in a state
where they purchase something that has a sales tax?"
If our state Supreme
Judicial Court manages to again make a fool of itself across the nation,
somehow uncovers a heretofore hidden penumbra in somebody's constitution
somewhere that allows our state to charge sales tax in all other 49, then surely
it will need to admit that such a definition would of necessity be
reciprocal.
Remember that Taxachusetts
exacts income tax from citizens of New Hampshire who happen to work here
in our benighted commonwealth -- "taxation without representation" not
withstanding. New Hampshire has no state income tax. How can
a commonwealth which asserts some esoteric power to exact its sales tax
levied on its subjects even while in another sovereign state, then expect
to collect another tax from the citizens of that sovereign state for a
tax they are not subject to pay within their own jurisdiction?
Our state SJC should
carefully consider this natural reciprocity before passing judgment --
and the pols on Bacon Hill ought be careful not only what they wish --
but reach -- for.
 |
|
Chip Ford |
|
The Boston Globe
Tuesday, February 3, 2009
State chases sales taxes in N.H.
Targets Mass. tire purchasers
By Jenn Abelson
Massachusetts has ordered a tire chain to charge Bay State residents a 5
percent sales tax on their purchases in New Hampshire in an
unprecedented move that could have huge implications for consumers and
other merchants.
Town Fair Tire Centers, which is based in Connecticut but has six shops
in New Hampshire and 25 in Massachusetts, is fighting back with a
lawsuit now before the Massachusetts Supreme Judicial Court that accuses
the state of violating the US commerce clause. If Massachusetts prevails
in the case, which is likely to be heard next month, it could drive up
costs for consumers and retailers such as Best Buy and Sears that sell
expensive home appliances and other goods in New Hampshire, which
doesn't have a state sales tax. It also could mean millions of dollars
in new tax revenue for the Commonwealth as it faces a $1.1 billion
budget deficit, according to tax analysts.
"This is a first-of-its-kind case," said Fred Nicely, general counsel of
the Council on State Taxation, a nonprofit trade association of
multistate corporations engaged in interstate and international
business. "There's huge ramifications to the entire retail community."
To others, it's a case of "Taxachusetts" striking back at the "Live Free
or Die" pride of New Hampshire. The Granite State has long lured
Massachusetts residents over the border to enjoy tax-free shopping. New
Hampshire Governor John Lynch has even gotten involved, kicking off a
campaign one year to persuade Bay Staters to head north so they don't
have to cram all of their shopping in when the Commonwealth decides to
hold a three-day "sales tax holiday."
The idea that Massachusetts consumers can't enjoy a tax break isn't
sitting well with the locals in this troubled economy. Just last week
Governor Deval Patrick proposed taxing alcohol, candy, and soda, and
raising taxes on hotels and meals.
"People are free to buy their tires wherever they want at the best
price," said Erin Willet of Lunenburg, who routinely drives 20 miles to
Nashua, N.H., to avoid tax on household items and big ticket purchases
like appliances. "If Massachusetts doesn't like it, then they should
have predictable tax-free holidays so that people can plan their
shopping to take advantage of it."
The Town Fair Tire legal battle dates back to 2003, when the
Massachusetts Department of Revenue audited the three New Hampshire
stores Town Fair Tire operated at the time, after receiving evidence
that Bay State residents were driving up to buy tires and having them
installed at the chain's shops. The auditors identified 313 sales made
to Massachusetts consumers, based on invoices that included Commonwealth
addresses and in some cases telephone numbers. The state's tax
authorities say the records demonstrate that Town Fair Tire knew the
customer intended to use the goods in the Commonwealth, and therefore
should have charged a 5 percent "use tax" - essentially a sales tax for
items purchased for use or storage in the Bay State. Those taxes then
would be given to Massachusetts. Following the audit, Massachusetts
authorities assessed the company about $108,947 in tax, penalties, and
interest related to the sales.
Kevin W. Brown, general counsel of the Massachusetts Department of
Revenue, said the case attempts to address a difficult and protracted
problem. Currently, New Hampshire merchants who also have shops in
Massachusetts are required to collect taxes on items that are bought by
Bay State residents over the Internet and via catalogs and mailed to
their homes.
In the 1990s, a similar lawsuit involving Circuit City determined that
the Commonwealth could require the electronics chain to charge taxes on
merchandise ordered in Massachusetts but picked up in the Granite State.
But there have been no court cases in Massachusetts involving purchases
made entirely out of state.
Until now, consumers have been solely responsible for paying use taxes
for eligible purchases initiated and completed in New Hampshire when
filing their state tax returns. This isn't an issue in other border
states, like Connecticut and Rhode Island, because they charge sales tax
and there is less incentive for Bay State consumers to cross the border.
But many Massachusetts residents don't file use taxes, tax authorities
say, and individual violators are nearly impossible to detect. The
invoices and receipts kept by retailers, however, have made it possible
for the state to track down the customers' plans to use their
merchandise in the Commonwealth, according to Brown.
"The use tax is designed to take away an incentive for the buyer to go
out of state and not pay the taxes," Brown said. "That's why we need to
be enforcing the use tax because it protects local vendors." Brown said
he did not have figures for how much Massachusetts loses in sales taxes
because of purchases made in New Hampshire. But several economists
estimate losses to be anywhere from $130 million to $410 million
annually.
Town Fair Tire, however, says it has no certain knowledge of where the
tires will be used - Concord, N.H., or Concord, Mass. - and is under no
obligation to ask customers where they plan to bring the merchandise
after they leave the store.
Consumers buying tires aren't always the owners and operators of the
car, nor is the address given necessarily linked to the vehicle,
according to David Nagle, tax partner at Sullivan & Worcester LLP in
Boston, which is representing Town Fair Tire. The company also says it
could be held liable for incorrectly guessing where customers plan to
use the tires and charging tax when it isn't warranted.
Town Fair Tire appealed the assessment to the Massachusetts Appellate
Tax Board and lost last June. The merchant then brought its case to the
appeals court, accusing the Commonwealth, among other allegations, of
violating the commerce clause that gives Congress the right to regulate
interstate trade. In December, the Supreme Judicial Court, on its own
motion, took the case.
While Massachusetts tax authorities say the Town Fair Tire case has
narrow application, Brown said it could conceivably be applied to other
merchandise installed on vehicles, such as ski racks or stereo systems.
If the state succeeds with the tire case, tax specialists say, the
ruling could have implications for many New Hampshire merchants who
collect customer information or offer financing. Furniture stores and
electronics chains, for example, could conceivably be required to
determine consumers' intended use for a leather chair, a big screen
television, or the contents of their entire shopping cart.
"We're just outraged at this case," said Nancy Kyle, president of the
Retail Merchants Association of New Hampshire. "New Hampshire prides
itself on being sales-tax free. It's not a New Hampshire retailer's job
to track where someone goes with their merchandise and then pay sales
taxes to other states. What's to stop Maine or Vermont and Canada from
doing the same?"
The Manchester (NH) Union Leader
Wednesday, February 4, 2009
A Union Leader editorial
Thwart Taxachusetts: Forceful defiance is justified
The Commonwealth of Massachusetts is trying to turn New Hampshire
businesses into tax collection agents for the Massachusetts Department
of Revenue. To this, there is only one appropriate response from the
state of New Hampshire. It isn't "no." It's "Hell, no."
Massachusetts has a 5 percent "use tax," which people must pay for the
privilege of using any "tangible personal property" purchased out of
state. Its purpose is to discourage residents from shopping in New
Hampshire. Subjects of the state of Massachusetts are required to file
and pay their own use taxes.
But state tax collectors found that few actually do. So in 2003, they
picked a target they thought they could bully into helping them collect
the tax. They went after a Connecticut company, Town Fair Tire.
Massachusetts ordered its New Hampshire stores to assess the use tax on
purchases made by Bay Staters, even though by law the tax is supposed to
be paid by the user, not the retailer. Town Fair Tire is fighting this
state aggression. The case is now before the Massachusetts Supreme
Judicial Court.
This case is about much more than Massachusetts tax law. It represents a
direct assault by the state of Massachusetts on the New Hampshire
Advantage. It is neither the first nor the last such attack, but it is
the most aggressive and the most legally dubious. If it is allowed to
stand, no New Hampshire retailer will be safe from the long arm of the
Massachusetts tax collector. Gov. John Lynch must not allow that to
happen.
If the Massachusetts Supreme Judicial Court upholds this clearly
unconstitutional cross-border tax grab, Gov. Lynch should immediately
dispatch the National Guard to all six Town Fair Tire locations in New
Hampshire and tell Massachusetts Gov. Deval Patrick, "If you want that
revenue, come and get it."
We are not joking. New Hampshire cannot let Massachusetts apply its
taxes on our sovereign soil. It can subjugate its own people all it
wants, but it must not be allowed to turn New Hampshire residents doing
business entirely in the state of New Hampshire into subjects of the
state of Massachusetts.
The Newburyport Daily News
Friday, February 6, 2009
A Newburyport Daily News Editorial
The cross-border tax grab
How ironic it is that the state that once had the gumption to start a
war over unfair taxation imposed from afar is now trying to spread its
tax tentacles beyond its own borders.
That's right: Massachusetts, the state that boldly took on the tax-happy
British Empire, is now doing a little imperial number of its own. And
instead of depending on musket-toting militiamen, this time we're using
hapless store clerks as our frontline troops.
The Massachusetts Supreme Court will hear a case brought by Town Fair
Tire, a company that sells tires in both New Hampshire and
Massachusetts. Our dirty little secret is out — the Bay State's tax
collectors have discovered that many Massachusetts residents are going
to New Hampshire to buy their tires, and other things too, in order to
avoid the 5 percent sales tax. They forced Town Fair Tire to start
collecting sales tax from Massachusetts residents because the business
operates in both New Hampshire and Massachusetts. And since there's
Massachusetts license plates on these border-crossers' cars, the
evidence of their tax evasion is, well, just about irrefutable.
The justification is that Massachusetts has an obscure law known as the
"use tax." All of us who buy stuff in New Hampshire are supposed to
declare our purchases on our tax forms, and dutifully pay our fair share
of the use tax.
Almost no one does that. That more or less defeats the purpose of
shopping in "tax free" New Hampshire, doesn't it?
Asking people to declare their "use tax" is one thing. Demanding that a
business that operates beyond the state border collect state taxes is
quite another.
Town Fair Tire is fighting back. The Supreme Court case will no doubt be
watched with great interest by every major retailer. The decision will
set a precedent for many other businesses in New Hampshire.
It seems ridiculous to force clerks in another state to determine
whether their customers are from Massachusetts. What if they catch a
Mainer by accident? One can only imagine the lengths that people will go
to get around this law.
Massachusetts ought to be careful of the whirlwind it might reap. The
Bay State has the second lowest sales tax in New England. One has to
wonder whether neighboring states with higher rates, like Rhode Island
and Connecticut, might get the same hunger for the cross-border
enforcement of a "use tax."
New Hampshire and Massachusetts have had their share of border brawls
over the years, and they never go well. At various times, Massachusetts
State Police have been dispatched to go "under cover" at such New
Hampshire establishments as state liquor stores and fireworks stores in
search of Bay Staters. Granite Staters fired back by arresting
Massachusetts state troopers for "loitering" in the liquor store parking
lots. And now we're asking store clerks to do the same kind of
enforcement work?
There's a symbiotic relationship between Massachusetts and New Hampshire
that's lasted for generations. The two states may not love each other,
but they also can't live without each other. It's a unique and quirky
relationship that ought to be allowed to shuffle along as it has for
generations.
The Manchester (NH) Union Leader
Friday, February 6, 2009
Lynch: NH merchants need legal protection
against Bay State taxation
By Tom Fahey, State House Bureau Chief
CONCORD – The fight against collection efforts north of the border by
the Massachusetts Department of Revenue now involves the New Hampshire
Legislature as well as the Bay State's top court.
Gov. John Lynch and Attorney General Kelly Ayotte announced yesterday
that the state will file a brief in a court dispute between
Massachusetts officials and a tire retailer with stores in both states.
Today, Lynch said he favors a change in state law to protect New
Hampshire businesses from being required to collect Massachusetts sales
taxes.
"We need to send a clear message that Massachusetts and other states
shall not impose their sales taxes on New Hampshire businesses,” Lynch
said.
Sen. Maggie Hassan, D-Exeter, will be the bill’s prime sponsor.
Yesterday, Lynch and Attorney General Kelly Ayotte announced that New
Hampshire has filed a brief at the Massachusetts Supreme Judicial
Council Court protesting efforts to force Town Fair Tire Center to pay
more than $100,000 in back taxes on sales to Massachusetts residents at
its New Hampshire stores.
Massachusetts residents are subject to a use tax, a form of sales tax,
when they import certain items into the state for use there.
"I think it is outrageous that Massachusetts erroneously believes it can
impose its sales tax here in New Hampshire," Lynch said. "We have chosen
not to have a sales tax here in New Hampshire and we are not about to
let Massachusetts impose its tax on our businesses."
The Massachusetts Department of Revenue wants Town Fair Tire Centers to
collect a 5 percent use tax on sales to customers who live in
Massachusetts but buy tires in New Hampshire.
It issued an order telling Town Fair to pay $108,947 in use taxes it
said the chain should have collected, based on sales records at three
stores. The chain lost its case at a Massachusetts appellate tax board,
and the case is now at the state's Supreme Judicial Court. The company
has seven New Hampshire stores, including four at border locations in
Nashua, Portsmouth, Salem and Seabrook.
Retailers here said they fear the Town Fair case is just the start of
what could become a fight with every store that operates in both New
Hampshire and Massachusetts.
Nancy Kyle, Retail Merchants Association president, said this week,
"They're testing the waters to see how it goes, and if they win their
case, the big-box retailers are next."
Ayotte said yesterday she's planning to file, "on behalf of the state to
ensure that New Hampshire businesses will not become agents of
Massachusetts tax authorities."
She said tax law in Massachusetts should not be enforced in a way that
interferes with interstate commerce. The court has set a March 23
deadline for all interested parties to file in the case.
Town Fair Tire Centers is a Connecticut corporation doing business
throughout five New England states.
Massachusetts and New Hampshire tax collections have had run-ins over
several decades on tax collections, liquor sales and car registrations.
The Nashua (NH) Telegraph
Friday, February 6, 2009
A Telegraph editorial
Court should reject sales tax challenge
If you want to get someone riled up in this state, it's pretty simple.
All you have to do is mention the T-word – as in T-a-x-e-s.
Anytime the state Legislature has had the audacity to consider a sales
or income tax in New Hampshire, the hue and cry can be heard from Berlin
to Brookline.
This time, the outrage isn't directed at our esteemed lawmakers in
Concord, but rather across the border toward our good friends to the
south.
As reported by The Associated Press in Wednesday's Telegraph, a case is
currently before the Massachusetts Supreme Judicial Court that could put
a dent in New Hampshire's status as a no-sales-tax state.
In fact, if a retail tire chain loses its appeal to that court, it could
give traction to Massachusetts' claim that it is entitled to collect a
tax when Bay State residents purchase certain goods in tax-free New
Hampshire.
As you might suspect, this isn't sitting too well in New Hampshire
business circles.
"We're just outraged at this case," Nancy Kyle, president of the Retail
Merchants Association of New Hampshire, told The Boston Globe. "New
Hampshire prides itself on being sales-tax free. It's not a New
Hampshire retailer's job to track where someone goes with their
merchandise and then pay sales taxes to other states."
Here's how we got to this point:
Six years ago, the Massachusetts Department of Revenue audited Town Fair
Tire Centers in Manchester, Nashua and Salem after receiving information
that Bay State residents were purchasing tires and having them installed
there in order to avoid paying sales tax.
When the auditors were finished, they had identified more than 300 such
instances and proceeded to assess the Connecticut-based company nearly
$110,000 in taxes, interest and penalties. The tire company filed an
appeal with the Massachusetts Appellate Tax Board, but it was rejected
last summer. The case ultimately ended up with the state's supreme
court, which could hear the appeal as early as next month.
Now this isn't the first time the two states have squabbled over
uncollected taxes. At different points during the past 30 years, both
Maine and Massachusetts tax agents staked out New Hampshire liquor
stores in search of residents crossing into New Hampshire to purchase
tax-free alcohol.
New Hampshire also has been a magnet for out-of-state residents
registering cars, purchasing cigarettes at discount prices or who just
want to take advantage of some no-sales-tax shopping.
Now given how cash-strapped state governments are, we can understand why
Massachusetts officials are looking to keep shoppers on their side of
the state line.
But, at the risk of sounding rude, that's their problem. And the
solution certainly isn't turning New Hampshire retailers into revenue
agents.
Besides, if you take this philosophy to its extreme, would that mean:
• National retailers would have to determine the home address of all of
their customers?
• New England states with higher sales taxes like Rhode Island (7
percent) and Connecticut (6 percent) could demand that Massachusetts
retailers charge the higher rates and redistribute the difference?
• Or, in the words of one of our more astute online contributors: "Does
that mean that a person who comes from a state without a sales tax would
not have to pay it in a state where they purchase something that has a
sales tax?"
So let's keep our fingers crossed that the Massachusetts justices find
in favor of Town Fair Tire. If they don't, the "New Hampshire advantage"
could come to a screeching halt.
Associated Press
Friday, February 6, 2009
NH gov proposes bill against collecting taxes for MA
CONCORD, N.H. — A day after saying he was getting involved in a sales
tax case between Massachusetts and a tire vendor in his state, New
Hampshire Gov. John Lynch is proposing a bill to protect businesses from
having to collect sales taxes on behalf of the Bay State.
Massachusetts officials say the case before its Supreme Judicial Court
applies only to Connecticut-based Town Fair Tire Centers Inc., and one
set of circumstances. The company sold tires in New Hampshire to
customers who appeared to be from Massachusetts, yet didn’t collect the
5 percent sales tax that would have been levied on similar sales at one
of Town Fair’s Massachusetts stores.
Lynch said Friday his state needs to send a clear message that
Massachusetts and other states shall not impose their sales taxes on New
Hampshire businesses. New Hampshire does not have a sales tax.
The Eagle Tribune
Wednesday, February 4, 2009
Bay State wants NH to collect its sales tax
By Eric Parry
Battle lines have been drawn between tax-free New Hampshire and "Taxachusetts"
— and the line is at the states' border.
Bay State officials said New Hampshire businesses should be collecting
Massachusetts' 5 percent sales tax from residents who cross the border
to shop — and save money.
Massachusetts is suing Connecticut-based Town Fair Tire for allowing its
residents to purchase tires at New Hampshire stores and not charging
them the 5 percent Massachusetts sales tax. The lawsuit is based on the
state's use tax, which is applied to items bought outside Massachusetts
that are intended to be used in the state.
The case now before the Supreme Judicial Court applies only to Town Fair
Tire, but some experts think the results could be much more
far-reaching.
The case doesn't mean Massachusetts has new collection initiatives or
will have any impact on New Hampshire's retailers, according to a
statement from Richard Bliss, spokesman for the Massachusetts Department
of Revenue.
But two law professors who studied the case disagree.
"Taken to its logical extreme, that rule would require a nationwide
retailer to determine the residence of all its customers," professors
John Swain and Walter Hellerstein wrote in the trade publication "State
Tax Notes."
The professors also warned that if Massachusetts forces out-of-state
retailers to collect its 5 percent tax, neighbors with higher tax rates
like Rhode Island (7 percent) and Connecticut (6 percent) could demand
Massachusetts stores collect and give them the extra tax their own
residents would have paid if they shopped at home.
Customers, business owners vocal about objections
New Hampshire business owners and customers said they won't be happy if
Massachusetts chases them across the border in pursuit of tax dollars.
Nancy Kyle, president of the New Hampshire Retail Merchants Association,
said she's outraged by the case because New Hampshire has worked hard to
fend off a sales tax. New Hampshire is the only New England state that
doesn't have a sales tax.
"It's not the job of New Hampshire retailers to enforce Massachusetts
tax law," Kyle said.
She said Massachusetts is "testing the waters" by going after a
medium-sized regional retailer like Town Fair Tire and, if it's
successful, it could go after big-box stores and small retailers next.
"Are we going to screen every shopper to see where they're from?" Kyle
said.
Rep. Norman Major, R-Plaistow, a member of the state House Ways and
Means Committee, said Massachusetts would be overstepping its bounds if
the state ever tried to cross the border to collect tax revenue or
pressure New Hampshire retailers into charging Bay State taxes.
"The person in New Hampshire selling things in his store and not
delivering to Massachusetts has no idea where it's going to end up,"
Major said.
Attempts to force New Hampshire store owners to charge the tax would be
intimidating to customers from both sides of the border, he said.
"I don't think we should stand for that," Major said.
Retailers don't want to be tax collectors
Jeff LaPointe, store manager at John Deere dealer James R. Rosencrantz &
Sons in Derry and Kingston, said a good percentage of their customers do
come from south of the border. But the store isn't responsible for
charging Massachusetts sales tax if the customer picks up the tractor at
either store, he said.
"It's not my responsibility to make sure that you pay the tax," LaPointe
said.
If that responsibility did become the store's job, then it could mean
fewer Massachusetts customers shopping in their stores, LaPointe said.
The only time a customer is charged the 5 percent Massachusetts tax is
when a tractor is delivered to a Massachusetts home or business,
LaPointe said.
The same is true for Best Buy in Salem, according to store manager Don
Smith.
If Massachusetts suddenly demanded Massachusetts residents pay sales tax
in another state, Best Buy would have to comply with the rule, Smith
said.
"It would be another step," he said. "But if that's what the law was,
we'd take that step."
A manager at Fay's Salem Tire in Salem said any changes in tax law might
not have much of an effect on that business.
Manager Rich Stacy said the store has a lot of loyal customers from
Massachusetts who would likely still continue to shop with them,
regardless of whether they had to pay Massachusetts taxes.
Stacy said he was aware of the Town Fair Tire lawsuit, but also was
concerned that customers looking for a bargain might go elsewhere.
"People are going to try to save as much as possible," Stacy said.
Shoppers cross the border to save
The problem with the use tax is that it's up to individual customers to
file — and few people ever do.
Massachusetts tax officials said they have no idea how much money the
state is missing out on from residents who shop across the border.
James Lefave, a Wilmington, Mass., homeowner, said he had never heard of
a use tax while loading windows into the back of his pickup truck at The
Home Depot in Salem yesterday.
Like many Massachusetts residents, Lefave traveled north to pick up 20
windows and a garage door to avoid paying the 5 percent sales tax that
would have been tacked on to his purchase if they were delivered to his
home.
"I didn't know you had to claim it," Lefave said.
Mary Reese, chairwoman of the Greater Salem Chamber of Commerce, said
forcing local businesses to enforce Massachusetts tax law during tough
economic times would harm local businesses.
"My suggestion would be rather than attempt to harm our New Hampshire
businesses, which border Massachusetts, the commonwealth should adopt a
less burdensome tax structure, which helps their own consumers and
businesses," Reese said.
Staff writer Bill Kirk and The Associated Press contributed to this
report.
The Boston Herald
Wednesday, February 4, 2009
Still not buyin’ sales tax boondoggle
By Howie Carr
Welcome to Taxachusetts. Open under new - er, make that old, very old -
management.
Last fall the hacks spent millions in public-sector union dues warning
us that if we voted to abolish the state income tax, they would have to
raise all the other taxes. Well, at least 30 percent of us voted to
abolish the income tax, and guess what - the hacks were telling the
truth for once.
All our taxes are going up, at least if tax-crazed Gov. Deval Patrick
gets his way.
Now they want New Hampshire to collect sales taxes on Massachusetts
shoppers. I know, this court case started under Mitt Romney, but nobody
ever said he was perfect on the tax/fee/toll issue. Just ask gun owners.
But this new attempt to collect state taxes out of state could have some
unintended consequences. For example, New York state has a sales tax of
between 7 and 9.5 percent. Surely at least a few New Yorkers must be
hoofing it into Berkshire County to take advantage of our 5 percent
sales tax. How long until Gov. Paterson unleashes the New York tax cops
on his runaway taxpayers?
Here’s another hypothetical. Suppose I have a rental property in, say,
Lincoln, N.H., and I decide to restock it for my next batch of ski
tenants with paper towels, paper plates, etc. When I go into the
supermarket in Boston and buy five rolls of paper towels, can I separate
out the three rolls that are going to Loon Mountain so that I don’t have
to pay Massachusetts sales tax on them?
And if I go to Florida on vacation, will I still have to pay the
Massachusetts meal tax? What if I buy dinner in Juno Beach for some
friends from New Hampshire - will their part of the bill go untaxed, by
Massachusetts, in Florida?
I know, Massachusetts needs the money, for basic human services. Like
Deval’s neighbor in Milton with the newly created $120,000-a-year state
job.
At this point in the tax debate, the moonbats always quote Oliver
Wendell Holmes Jr.: “Taxes are the price we pay for civilization.”
Yes, but we don’t live in civilization, we live in Taxachusetts.
Then there’s Deval’s proposed new deposit on bottled water and sports
drinks. For decades, the hacks have lectured everyone that soft drinks -
sugar or diet - are hazardous to your health. Over the years people
slowly cut back, and suddenly the state realized its cut of the
unclaimed soft-drink bottle deposits was dropping.
Simple solution: extend the deposit to the bottled water (and sports
drinks) that everyone was switching to, at the behest of the state’s
health Nazis. They barely even talk about cleaning up “litter.” The
payroll patriots only care how much they’ll grab out of their new tax:
$20 million.
Hey, Deval, one last question: When is that property tax relief you
promised us kicking in?
The Salem News
Wednesday, February 4, 2009
Taxpayers must revolt
By Robert Kelly
"I like a little rebellion now and then."
— Thomas Jefferson
President Obama faces a significant recession.
So what's he going to do about it? Tax us? Not yet, he says. Who's he
kidding? He'll borrow a ton of money to support an $800-billion-plus
"stimulus" package, which amounts to a tax on future incomes — yours and
your kids', just waiting to be levied.
It might hit you in higher interest rates on your loans, or in
inflationary prices — or in increased tax rates; but you and the kids
will pay ... and pay, and pay.
Gov. Deval Patrick faces the local side of the national problem. Unlike
the president, however, he can't borrow his way out of it. States must
balance budgets.
So what's Patrick going to do?
First, he says he'll cut spending. What does that mean to us? State aid
to local governments, state colleges and court systems will be cut; heat
will hit local budgets. There isn't much talk about restructuring
government, modernizing the tax system or tackling the unions.
Higher taxes, the rainy-day fund and a grant from the federal government
are the other aspects of the Patrick "fix." You'll be surrounded by
nit-picking taxes and fees.
Had enough? Are you beginning to realize that government, state and
local, is the basic cause of our problem?
It's time we had a serious chat.
Forget Democrat vs. Republican; forget liberal vs. conservative.
Instead, think prudence (the ability to discipline oneself). Agree on
one thing and a solution is possible. What is it? Well, if a proposed
expenditure is affordable within a rational tax structure, it is
right/wrong/debatable. If it isn't, it's too early to even discuss it.
We have been spending imprudently for decades. The pattern has been
unbroken: Tax receipts rise, spending goes up; tax receipts go down; the
new governmental services, departments, etc. added during the good times
are said to be irreversible.
"Can't be cut," we're told.
So now there's panic! Until someone says, "We need to raise taxes!"
Music to the bureaucrats' ears!
And on it goes. And we, like placid puppies, allow it to continue.
We send the same people to the Legislature year after year because they
say hello to us, or add some local pork to the state budget, or because
we're too damn lazy to think.
Another quote from Jefferson: "The services (are needed) of (a) great
leader whose talents and whose weight of character (are) peculiarly
necessary to get the government so under way as that it may afterwards
be carried on by subordinate characters."
Jefferson had it right. We've been mostly governed by small men for more
than a half-century, men who cease to consider the well-being of the
state/nation as a cause more important than their own ambitions.
Character does count. We need no more tax cheats, crooks or playboys in
government. We need serious, capable, moral and patriotic men and women
to lead us through serious government/tax reform. Get to the root causes
of problems, and "get the government so under way as that it may
afterwards be carried on by subordinate characters."
The real fix doesn't begin with an Obama, or a Patrick. We must abide
the people in power for another two to four years. Then the real fix
must begin. And you are the ones to do it.
The technique? Easy! Everyone in office is out.
Vote against them. They don't get it. They are blind. As soon as a
worthy opponent appears, give him/her your vote. Continue until the bums
are all out and the princes are in.
Robert Kelly of Peabody writes a weekly column for the Opinion page.
NOTE: In accordance with Title 17 U.S.C. section 107, this
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