A Taxing Plan

Legislative leaders said Thursday they hated the idea of a sales tax holiday, they doubted it would provide much economic activity, and it would likely be of little help to poor Vermonters.

Then they approved it.
    Rutland Herald

Perhaps these leaders should ankle it on down to Brattleboro and watch how Vermonters (poor and otherwise) respond to the tax incentives that are available to them by simply crossing the Connecticut River. Afterwards, they might feel better about their votes.  And possibly even find themselves open to the possibility of more tax relief and, inevitably, more "economic activity."

The Reformer which serves Brattleboro, and editorializes today on the closing of the local Home Depot, understands what is undeniable ... unless, that is, you are a "legislative leader."

... the real reason why Home Depot didn't make it in Brattleboro is simple -- they have a bigger store in Keene, N.H., and Vermonters are willing to drive to Keene to save on the 6 percent sales tax they would have pay here.

That's why most big retailers have abandoned Brattleboro. And that's why the smaller retailers have learned that to survive against Wal-Mart, Home Depot or other big box stores, you have to offer better quality and better service to offset the price advantage of the big retailers.

Regardless of where one stands on the big box issue, the lure of tax-free New Hampshire for Vermont shoppers has meant that all the big box stores that might have come to Brattleboro are in Keene and are drawing plenty of Vermont customers.

Until Vermont lowers or eliminates its sales tax, big box retailers will be hesitant to come to Brattleboro.

 

Comments

[Lazarus Long]

Just what do the Gov and legis-people think we are going to do with a very short duration tax holiday? Defer all our purchases and get all of our necessaries and fun things in one short period? They gotta be kidding.

[GreggB]

The solution is simple- make it so VTer's need a visa to visit NH. That'll enforce buying local and paying your honestly owed taxes. I'm sure central planning in Montpelier could work out a visa scheme in no time.

[James Wadlow]

We have a tax holiday 365 days a year in NH. As a matter of fact, tonight I'm making a tax-free purchase at Sullivan Tire in Keene, NH. Then to Walpole, NH to buy some Penofin stain for my deck on my CT house. Maybe VT legislature could build toll bridges at the border so they could get their 'fair share'.

James Wadlow III
Flatlander CT
Non-resident VT

[T. Shea]

What's amazing is that the Reformer editorial board actually made the connection between tax rate and amount of purchases people make.

The cognitive dissonance must be tremendous having figured out that the big bad big box business who they didn't want in the first place ended up providing jobs, but the high tax rate made them unprofitible. Must have been a long meeting to decide whether it was bad that people lost their jobs or good that the big box store was gone.

I'm surprised they didn't make the claim that the store closing had something to do with George Bush. I guess that will be in a future editorial.

[joshG]

I love this story. Brattleboro fights Walmart moving to Bratt, so not only did they move to Hinsdale, NH, a couple of miles from Downtown Bratt. But Vermont loses the sales tax, the Income tax from employees, and Bratt loses the Property Tax-school taxes, etc.

And the parking lot is a sea of green license plates. Didn't anyone in government take Economics 101?

Some Lawmakers continue to believe that people can be forced to spend their hard earned money the way the State (re. politically connected)wants them to.

[Green Mtn Punter]

White River Jct may be the best example of all NH border towns for it's lack of retail business. It's just too easy to skip over to West Leb- rather should I say it's the only place you can find any retail business on this stretch of the CT River.

One exceptional exception is found at Farmway up 91 in Bradford, a true "old" VT shopping destination with au courant merchandise and operated by some damn good, old fashioned merchants. And now they are competing against a Wal-Mart Super Center about 8 or 10 miles up the road in Woodsville NH but I would still bet on Farmway because of their dedication to customer service. But they are the exception to the rule- the VT sales tax is a killer, just as the VT income tax is a killer in getting NH businesses to jump the river and locate here.

Again the Burmont Corridor and Chittenden County don't have this competitive disadvantage since they are competing with higher tax NY and PQ. About time for the "NH Border Tax Relief Act of 2009" to bring some NH jobs over here by exempting NH residents from the VT income tax, and while you're at it create a sales tax-free buffer zone for NH Border towns.

That move could actually create some jobs over on this side of the river with a big net plus in tax revenue amnd payroll multiplier, the kind of things that get economic developers excited. Do you think our so -called "legislative leaders" would ever think of anything obvious like this? O r would it be dismissed as more "tax relief for the wealthy"?

[Woodstocker]

I'm renovating a kitchen this summer, which means a whole lot of appliance purchases... If I can wrangle them to made on the Tax Holiday offered by the Governor, I'll buy them in Vermont. If not, I'll buy them in NH and smuggle them in. Why on earth would I give $600 to the State of Vermont for nothing? I'd much rather reward NH for their pro-consumer outlook.

When VT Sales Tax hits 20% and ALL purchases are made in NH do you think they'll get it?

[James Ehlers]

Friends,
The basic issue is one cannot claim to be pro-worker on one hand and anti-business on the other. Until the very simple concept that in order to be pro-worker one must be pro-business is embraced by members of both parties, we are likely in for more of the same.

That said, I do think the sales tax holiday will have a small benefit on the western side of the state. Given what this legislature is willing to undertake as far as real reform in addressing the concerns of business people like myself, such as insurance costs, utility stability, property taxes, available workforce, real estate costs unnecessarily exacerbated by regulation, transportation infrastructure, among others, there appears to precious little the Governor can otherwise do.

However, I very much encourage him to seriously move the effort to repeal community rating forward even if the legislature refuses. At a minimum, it would give us some meaningful hope and get the discussion going as to what this government regulation and others are doing to slowly strangle the vitality of this state.

I imagine the enormous irony that Green Mountain Coffee Roasters cited their intention to expand elsewhere was based, in part, on their interest in reducing their "carbon footprint" was not lost on others. Seems we are poisoning our own well, at nearly every opportunity. The sales tax holiday will make the water taste better for a few days, but does little to purify it. Nonetheless, I thank the Governor for his persistence. It does result in lower tax revenues for the legislature to attempt to spend on the creation of new programs to further limit opportunities for its citizens' prosperity.

Sincerely,
James Ehlers

[SPS]

Ever pay property tax in NH? Everyone praises NH's tax-free status until they get a property tax bill. My parents live in a home of comparable value, but their tax bill is about $4k more per year than our house. That's a lot of trips to Wal-Mart.

Basically, NH has the same problem Vermont does - financing the schools.

The tax holiday thing is a gimmick. Probably car dealers will have a great couple of days, but that is about it.

Would be nice in Guv Do-Less actually had some sort of vision rather than gimmicks. conversely, it would be nice if Democrats actually showed some spine and called the governor out for political gimmicks.

Pox on both their houses, I say.

[G. Cross]

SPS is right on target, the propery tax in NH is out-of-sight. My house in Vermont is a bit nicer than the one I owned in NH and the property taxes are several thousand less here in VT. Also remember the annual excise tax on vehicles.

Note to Commissioner Pelham, better keep an eye on "Woodstocker."

[James Ehlers]

Friends,
Let's take the matter in its proper context. There is no general sales tax and no income tax in NH. A state will collect revenue from some source. NH leans on the property tax. Here in VT, the state leans on most every conceivable revenue stream possible. Plus, VT residents enjoy the benefits of income sensitivity and higher rates on commercial owners. Higher rates for commercial owners, of course, mean higher costs for the consumer. A version of musical chairs in which the music never really stops. People are just paranoid it will and are constantly bouncing from one position to the next. Meanwhile, businesses leave, close, and the new ones only generate enough to replace those that left. This has been going on since 2001.

As for us Vermonters shopping in NH, I believe we are legally required to report on our tax returns purchases made in other states in which a tax was not collected. Folks may want to look into it or, perhaps, at least not continue to boast on the internet of all the taxes they do not pay by shopping in NH.

As for school financing being our only real issue, I need to disagree. Transportaion, corrections and health insurance costs are not exactly hiding in the closet if folks are paying attention at all.

Sincerely,
James Ehlers

[Marilyn Miller]

Correction for SPS. Automobiles generate Purchase and Use Taxes, for transportation infrastructure and that fund has been raided for years for purposes other than transportation. The sales tax holiday will not benefit car dealers in Vermont. I have been thinking of replacing my 20+ refrigerator, however, and believe I'll take advantage of that tax holiday myself!

[Woodstocker]

What! Are you kidding me! Do you honestly believe everyone of those green-license plated shoppers in West Lebanon is keeping a record of their purchases and sending a check to Montpelier.

Mr Cross, have you duly paid sales tax on every internet purchase, every NH, NY and everywhere else purchase you've made?

Or are we to believe you take the 'Buy Local' philosophy to a degree that puts the rest of us to shame?

Nice touch on informing on your neighbors to the Tax Commissioner.... Thank God you weren't near Boston Harbor in 1773.

[James Ehlers]

Dear Mr. Woodstocker,
It is not about what I believe.

And, yes, good thing I was not around in 1773 ... As it is I feel old after only four decades, never mind two centuries. I do find it humorous, however, that you assign the same courage to bargain-hunting shoppers "risking their lives" to go to NH as those who endured the quartering of soldiers, among other abuses. Wealthy smugglers do get testy from time to time, especially when they are being undercut, and they were fortunate to be able to tap into the public's overall discontent of the time.

As for "buy local," I have no particular affinity for the philosophy. I believe consumers should be free to procure their goods and services from whomever they see fit. That said, a Vermont without local employers should be of concern to all of us.

Sincerely,
James Ehlers