EagleTribune.com, North Andover, MA

July 30, 2013

Tax hikes drive Bay State shoppers north

By John Toole

---- — A new round of tax increases is encouraging more Massachusetts residents to shop in New Hampshire.

It’s also pleasing store owners along the border in the Granite State.

“I don’t understand it. They hit the tobacco and they hit the gasoline,” William MacCord of Methuen said while parked outside Stateline Paysaver yesterday on Route 28 in Salem.

The Massachusetts’ cigarette tax is going up $1 from $2.51 to $3.51 a pack Thursday. New Hampshire’s cigarette tax also is going up, but only a dime from $1.68 to $1.78.

Massachusetts also is boosting its gas tax from 21 to 24 cents a gallon. New Hampshire is holding the line at 18 cents.

“We’re in a border town, so you can just jump over and we do that every day,” MacCord said. “The reason I come to New Hampshire to shop is the taxes.”

Pat Smith of Methuen also was shopping yesterday at Stateline Paysaver.

“The only time I don’t come here is on Saturday and Sunday, when the traffic is horrible,” Smith said. “I think the taxes push people over the border more and more.”

Curt Gracie of Salem, a carpenter, said it costs him about $12 more to fill up his pickup in Massachusetts because of taxes, so he tries to avoid doing so.

“It makes a big difference,” Gracie said.

Marie Thibodeau of Methuen crosses the border to shop, too.

“It’s a lot cheaper,” Thibodeau said of her decision to shop at Paysaver in New Hampshire. “It makes me cringe whenever the taxes go up. It makes me want to move.”

Shoppers said it makes a difference.

“I definitely come to New Hampshire for cigarettes,” Jane Potvin of Everett said as she shopped at Paysaver.

Potvin said she dislikes the difference in taxes that she said forces her to come to New Hampshire.

“I don’t think it’s fair,” said said.

The owner of the First Store in New Hampshire, across busy Route 28 in Salem, said more customers are coming in because of the tax increases.

“People like cheaper,” Bob Patel said.

At Discount Stateline next door, owner Kamal Patel, who is no relation, said even though the tax on cigarettes also went up in New Hampshire, shoppers know there’s a savings for them in the Granite State.

“Massachusetts people are going to buy more cigarettes from New Hampshire,” he said.

Cheaper cigarettes bring Haverhill resident Delis Alexandra across the state line, too.

“What are we going to do?” Alexandra said as she shopped at Foods Plus Discount in Plaistow. “You want the key to my safebox? Let’s spare ourselves the middle people and the paperwork.”

Alexandra said she comes to New Hampshire for the tax savings.

She estimates she saves $240 a year on cigarette purchases in New Hampshire because of the tax difference.

“That’s a lot,” she said.

Katie Murphy of Hampstead, also shopping at Foods Plus, said her Massachusetts friends have shopping plans that don’t include their home state.

“They say they’re going to see me in New Hampshire,” Murphy said.

Jeff Garvey of Haverhill said he comes to New Hampshire to shop every day to save on taxes.

“I just don’t know what it’s going for,” Garvey said of his taxes back home in Massachusetts.

While Foods Plus owner Norm Dalphond feels their pain, it works to his advantage.

“It’s unfortunate they have to go up at all,” Dalphond said. “We’ve been hearing about this the last two weeks. Their reaction was they are coming here.”

For businesses in New Hampshire, this is a good thing.

“We think it’s great,” Dalphond said.

But he worries about the impact on consumers.

“They always seem to pick on the same people,” he said. “Truthfully, do you wonder where the end is? What if cigarettes go away? How is anybody going to balance their budget?”

Gov. Maggie Hassan understands the “New Hampshire Advantage” includes a low-tax environment, as well as a high quality of life and an educated workforce, spokesman Mark Goldberg said.

“We more than welcome any economic boost from the people of Massachusetts,” Goldberg said.

As neighboring states choose higher taxes, that sends business to New Hampshire, according to Greg Moore, state director for Americans for Prosperity-New Hampshire.

“It’s no surprise that Massachusetts residents are voting with their feet against higher taxes on gas and tobacco,” Moore said. “States operate in a competitive environment, so smart consumers will shop around for the best deal and that’s exactly what’s happening.”