Posted by Mitch Townsend on April 1st, 2007 (All posts by Mitch Townsend)
CONCORD NH (Reuters) – Governor John Lynch today announced that he will begin the process to change the official name of the state to Tax-Free New Hampshire. This will require an amendment to the state constitution, which must receive a three-fifths majority in both houses of the state legislature and approval by a majority of the voters in the next regular election. “It’s clear that we will not have the change in place for the 2008 elections. In fact, that will be our earliest opportunity to get it on the ballot. We’re looking ahead to 2012.” The heavily-covered New Hampshire presidential primary is expected to give the new name wide exposure.
A spokesman for the governor confirmed that, aside from state pride in responsible government, commercial advantages played a part in the decision. “Look at the states surrounding us: Vermont, Maine, and Massachusetts. To the north, we have Quebec. All of them have pretty high income tax, sales tax, and then there’s the VAT in Canada with provincial taxes on top of that. We do a pretty good business selling liquor [note – New Hampshire sells distilled beverages exclusively through state-owned stores] and smokes at every border town, and to the south, the mall parking lots are full of cars with Massachusetts plates on them. We’re not alone in this either: look how well Nevada does with California customers.”
Radio and television advertising, much of it targeted at residents of surrounding states, frequently stresses that purchases of tangible goods are exempt from state sales tax. The change in the state name will extend this marketing theme to news reports, geography textbooks, and road maps. New Hampshire relies heavily on real property taxes, and also imposes taxes on meals and hotels. With much of the state’s most valuable residential property used as vacation homes, this means that a substantial portion of the state’s revenues come from non-residents visiting the state.
Some of these neighboring states impose a use tax on goods bought there by their residents, but this is difficult to assess and collect. Massachusetts has a line on its state income tax form where taxpayers are supposed to list their out-of-state purchases, but compliance is believed to be minimal. Efforts by Massachusetts state police to take down license plate numbers in the parking lots of New Hampshire state liquor stores, retail stores, and fireworks stores have been controversial with Massachusetts residents and resisted by New Hampshire officials. Store employees, including those of state stores, generally ask them to leave when they are found. “If they want to stop a car entering Massachusetts with a wide-screen plasma TV sticking out of the trunk, that’s their business. If they want to hang around Best Buy taking down customers’ plate numbers, that’s ours,” said the governor’s spokesman, who declined to be identified.
A spokesman for Massachusetts Gov. Deval Patrick refused to comment on New Hampshire’s plans, saying only that all options remain open. When asked if a military response was being considered, he would only reiterate that “Nothing is off the table. All options are open.”