Massachusetts gives big boost to NH advantage
And it's not only cigarette prices that could help bolster the New Hampshire advantage. Gasoline taxes will be going up three cents a gallon in Massachusetts, but held steady in New Hampshire. Business taxes are going up in Massachusetts, and down in New Hampshire.
"A new budget takes effect in New Hampshire that includes no new taxes, and which keeps business tax reductions in place," Moore said. "Not so in Massachusetts. If you look at the policies these two states are pursuing, the issues line up almost identically — gas, tobacco and business taxes."
"I think in both states we tried to explain as clearly as we could to the legislatures the importance of a tax structure that didn't negatively impact businesses," said Steve Ryan, executive director of the New England Convenience Store Association, who testified in both Concord and Boston. "Obviously in New Hampshire, decisions were made that result in a tax structure that's going to be significantly lower for some products. It's logical to assume that when tax disparities exist, particularly as it relates to tobacco, that there are going to be changes in consumer buying patterns."
John Dumais, president and CEO of the New Hampshire grocers association, thinks he is not likely to be disappointed. "With Massachusetts raising their tax, we will generate additional revenue coming into New Hampshire because of that," he said. "Tobacco is a very price-sensitive item."
Given the price of gasoline, consumers need significant price differences to make the travel worthwhile, Dumais said. "We have testified for years now that 40 percent of our consumer sales in New Hampshire come from out-of-state residents," he said. "We sell 40 percent more than our own citizens would consume in New Hampshire because we don't have a sales tax, we have low liquor prices, low tobacco prices."
"We can say that the New Hampshire Legislature this year was very good about understanding the economics of our business," he said. "They tried to work with us on a balance between state revenue and generating more cross-border sales. Now all we need is the weather."
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