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States With No Sales Tax Should Charge Out of State Shoppers

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    Living in a state with no sales tax is great for many reasons, but one thing I understand is that my state government will still find a way to keep the lights on and pay the services the people of New Hampshire expect. That is why I get frustrated when I see license plates from neighboring states that cross the border to take advantage of system while being able to avoid contributing to our state in the same way everyone who lives here does.

    This is why I think that states with no sales tax should only have that option for people who live in that state. I find a system that allows people to cross an invisible line in order to avoid paying their fair share inherently unfair to the people who reside in the state that pay their taxes in other ways.

    An easy way to make this a reality is to require shoppers to show proof of residence before paying. We currently charge $10 for a non-driver ID card, but I think that should be reduced to zero.

    I'm interested to hear what people who live in "border" states think about this. Do you understand why people like me are frustrated that you take advantage of our tax laws or do you have no problem with the status quo?

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    I have little issue with this loophole. Though I am of the mind that taxing people over every little thing has gotten out of hand, so take my opinion with that in mind.

    But still, we are talking about a small, small percentage of people taking advantage of this ability. And for them to do so, they still have to spend at least slightly more money on gas (which is taxed) to get to the Wal-Mart across state lines, or whatever to buy whatever goods.

    Also I doubt many are doing this exclusively. I wonder what figures taxing out of state buyers in states with no sales tax would even amount to anyways? Can't be much. Maybe I'm naive on this.. For general and smallish retail purchases (maybe purchases under X amount, say $1000?), I think the extra bureaucracy involved would be more of an annoyance and a deterrent for people to travel freely from state to state than it would be a boon for your state to be proud of.

    But maybe for buying large tickets items like cars and boats and whatnot, I can see the logic there. I don't think I should have to show state ID for buying a pair of pants at the mall, for this situation. But maybe if I'm buying a brand new car, perhaps I should.. but then maybe even not.

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    Also, I would imagine there would be extra annoyance involved for a lot of retailers in those states. They would have to collect that money and earmark it separately for the state somehow. Perhaps easy enough, but maybe not. New software would have to be created and implemented for every single establishment state wide. Also new training across the board. Seems like a lot of trouble to me.

    Would the state somehow cover these expenses for every single retail establishment, by some kind of tax break for them?

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    It would make more sense for the states that don't charge a sales tax to send the money they collect from out of state shoppers back to that shopper's state of residence, as the 5 states that don't currently charge sales tax are already collecting taxes through other means.

    Meaning the state that's really losing out is not the state without sales tax in this scenario, but the state with a sales tax, relying on that sales tax income, is missing out.

    I don't think this should happen, but if the loophole were to be closed off, I think it should go like that.

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    bryce28 Wrote: It would make more sense for the states that don't charge a sales tax to send the money they collect from out of state shoppers back to that shopper's state of residence, as the 5 states that don't currently charge sales tax are already collecting taxes through other means.


    Meaning the state that's really losing out is not the state without sales tax in this scenario, but the state with a sales tax, relying on that sales tax income, is missing out.

    I don't think this should happen, but if the loophole were to be closed off, I think it should go like that.

    I can't say I agree here. I live in Portland, OR and there's a bustling metropolis just across the river in Vancouver, WA whose residents take advantage of our tax free status on sales tax while at the same time living in a state with no state income tax.

    The people from Washington use our roads and other services that Oregonians pay for via income and property taxes for free while at the same time taking advantage of our sales tax laws which benefit them.

    I understand that it's not the biggest issue for people who don't live in states with no sales tax, but I totally understand where Richard is coming from.

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    J.K.Logic Wrote: Also I doubt many are doing this exclusively. I wonder what figures taxing out of state buyers in states with no sales tax would even amount to anyways? Can't be much. Maybe I'm naive on this..

    I can guarantee you that tens of thousands of people from Washington cross the border every single day to take advantage of our tax free status. Heck - there's a town of 160,000 just across the river from us that work in Oregon, but live in Washington to avoid paying income tax.

    J.K.Logic Wrote: For general and smallish retail purchases (maybe purchases under X amount, say $1000?), I think the extra bureaucracy involved would be more of an annoyance and a deterrent for people to travel freely from state to state than it would be a boon for your state to be proud of.

    But maybe for buying large tickets items like cars and boats and whatnot, I can see the logic there. I don't think I should have to show state ID for buying a pair of pants at the mall, for this situation. But maybe if I'm buying a brand new car, perhaps I should.. but then maybe even not.

    I see your point of view and can't say I necessarily disagree in theory, but my issue is just with fairness. The reason some states have no sales tax is because their income or other taxes are higher. And knowing that people are taking advantage of that just rubs me the wrong way.

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    JaredS Wrote:

    I see your point of view and can't say I necessarily disagree in theory, but my issue is just with fairness. The reason some states have no sales tax is because their income or other taxes are higher. And knowing that people are taking advantage of that just rubs me the wrong way.

    To my point though, wouldn't it be most fair if Washington collected those taxes and sent them back to the state in which they actually reside?

    It's an interesting topic. I think the party that is actually getting slighted the most in this scenario would be the companies that sell retail goods on the border, in the state that has the sales tax. Since the consumer is breaking zero laws driving to another state to buy whatever, kinda sucks for whatever establishment to have this state imposed, added competition barrier to deal with.