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The Massachusetts Tax Advantage?

While conventional thinking puts Massachusetts taxes as universally higher than those found in New Hampshire, there's one area where taxes south of the border are actually lower, although opinions vary as to what impact that fact has.

When people from other parts of the country think of the Commonwealth, one idea that pops to mind is, "Taxachusetts," a state where taxes are significantly higher than other places, especially when it comes to the Bay State's relationship with New Hampshire

But despite that conception, there is one area where the Granite State has higher taxes than Massachusetts, and that's the Meals Tax.

South of the border it ranges from 6.25 to 7 percent while north of the border it's 9 percent, and also applies to hotel rooms as well.

But despite that fact, people on both sides of the border have varying opinions over what impact Massachusetts' tax rate has when it comes to local restaurant economies.

In Westford, just 10 miles away from the border, owner Paul Doty might have hoped that last month's sales tax holiday could have indirectly helped his business, bringing out hungry consumers who wouldn't have noticed the holiday didn't extend to food.

But that wasn't the case, and he says it's usually not the case, a viewpoint shared with multiple restaurant owners in town.

"I think the key thing is where you are, if you're down here, you'll probably just eat down here and the same goes for up there," said Doty. "I don't see alot of customers come here from New Hampshire because of the tax situation."

In Seabrook, New Hampshire, a border town just north of Salisbury, town budget committee member Max Abramson differs strongly in that opinion.

Abramson says he frequently sees Massachusetts residents coming to the town for items that fall under a sales tax, which Massachusetts has and New Hampshire does not have, but also notes New Hampshire residents often do the same when it comes to eating out.

"Most inhabitants of New Hampshire are pretty savvy about this issue," said Abramson. "Folks along the border tend to buy their food in North Shore and their retail goods in Seabrook, minimizing their tax payouts."

The dichotomy between the two states has remained despite both raising their Meals and Rooms tax rates over the past decade, with New Hampshire going to the current 9 percent from 7 percent in 2006 and Massachusetts' change to the Local Option Meals Excise route where communities can choose between a 6.25 percent and 7 percent rate, changing from the old flat 5 percent in 2009.

Westford state representative Jim Arciero feels that despite varying sentiments on both sides of the border, Massachusetts shouldn't raise its rate any further than it already has.

"As a border community, we have to be mindful that increased taxes have the potential to send economic activity over the border to New Hampshire," said Arciero. "We must be concerned that the cumulative effect of raising the local option meals excise in conjunction with the increase of the state sales tax, the imposition of an alcohol sales tax (later repealed by the voters) and other taxes can be the catalyst for business flight."

Westford is one of 147 Massachusetts communities that has the Local Option Meals Excise, an additional .75 percent chosen at the local level that goes directly into local budgets.

The excise went into effect on July 1 after Town Meeting earlier this year.

Len September 30, 2011 at 04:38 PM
Other differences are: When selling or buying real estate - Stamp tax in Mass is $4.56 per $1000 to the seller. Stamp tax in NH is $7.50 per $1000 to BOTH the buyer and seller each.
Anon December 29, 2011 at 06:13 AM
Gasoline tax?

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