February 3, 2009
WMUR-TV
CONCORD, N.H. — Massachusetts is trying to force its residents who shop at New Hampshire tire stores to pay a 5 percent tax, but the idea isn’t sitting well with New Hampshire officials and consumers.
The Connecticut-based Town Fair Tire Centers has 25 locations in Massachusetts and six in New Hampshire. Massachusetts has ordered the retailer to charge Bay State residents a 5 percent tax on purchases.
“It would be horrific,” said Nancy Kyle of the New Hampshire Retail Merchants Association.
Kyle said the order would place a huge burden on the stores, which would be responsible for figuring out who’s buying the tires and where they would be primarily used.
The issue is expected to be heard next month by the Massachusetts Supreme Judicial Court. The tire company is arguing that the tax would violate the U.S. commerce clause. Kyle said the outcome could have serious consequences for retailers big and small.
“If they win this case, what would stop Vermont, Maine and Canada from doing the same thing, and I think all retailers are threatened by this,” Kyle said.
New Hampshire officials are keeping a close eye on the case.
“We’re aware of it, and we’re watching it, and we’ll wait to see what the outcome is of the process down there,” said Kevin Clougherty, commissioner of the Department of Revenue Administration.
Not having a sales tax has always been considered a major draw for cross-border businesses and the idea of a 5 percent tax didn’t sit well with a lot of people on Tuesday.
“I think that Massachusetts should do a little house cleaning,” said Donald St. Laurent, of Methuen, Mass. “That’s what’s wrong here. They should leave people alone who go to New Hampshire.”
“It’s a place where we come to shop where we can get less,” said Linda Morton, of Lawrence, Mass. “We have to pay taxes in Massachusetts, so it’s easier to come over here.”
A statement from the Massachusetts Department of Revenue stated that, with the exception of the tire retailer, the case does not signal the start of a new sales tax collection initiative on the New Hampshire border.