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Desperate Times, Desperate Measures

As the economy continues to decline, more and more states are finding themselves facing falling revenues and budget shortfalls. State governments are scrambling to re-stock their coffers, and trying pretty much anything they can to keep things going. And they are making some some bad moves.

One example is Massachusetts. The Bay State has a sales tax (like most states), and depends heavily on that revenue stream. For decades, they’ve suffered because they are next door to New Hampshire, which has no sales tax (or income tax, for that matter — the only state with neither, and we like it that way). Massachusetts residents are willing to travel 20, 30, or more miles to beat that tax — and New Hampshire has been more than willing to help them.

Massachusetts has a law that was intended to check that. On their state income tax form, there is a place for residents  to declare their out of state purchases and pay those taxes.

Oddly enough, not very many Bay Staters fully comply with that law.

So the Commonwealth will begin “helping” them with their paperwork. Massachusetts is demanding that New Hampshire businesses report sales to people who give Massachusetts addresses or have Massachusetts phone numbers or license plates — and are leaning most heavily on businesses that have a presence in both states. In other words, if the Best Buy in Salem, New Hampshire won’t fork over its customer information, the Best Buy in Danvers, Massachusetts can expect to be leaned on.

This isn’t the first time this sort of thing happened. Back in the 1970s, Massachusetts got fed up with its people going into New Hampshire to buy liquor, where it’s substantially cheaper (and sold through a state monopoly, but that’s another matter). They started stationing state troopers in liquor store parking lots who would observe people loading booze into Massachusetts-registered cars and radio ahead a description to fellow troopers on the state line. When New Hampshire’s governor got wind of this, he threatened to have New Hampshire troopers arrest their Bay State brethren for trespassing. That ended that particular tactic.

Massachusetts obviously has a problem. Its people don’t like paying their taxes, and have found a way they can readily avoid it. It’s understandable that the state would try to collect that lost revenue.

But that’s not New Hampshire’s problem. We are under no obligation to assist Massachusetts with their troubles. Their laws stop at the state line, and they have no right to compel New Hampshire businesses (even those that have a presence in both states) to aid them.

Perhaps Massachusetts ought to look at their laws, and see if there is something they can do within their own borders to get their citizens to be more honest.


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