Tuesday, February 10, 2009

Cross Border Tax Grab

I know the economic situation for the state government in the Commonwealth of Massachusetts isn't all that great, but it seems that in their zeal to maximize tax revenues to fill depleted state coffers they probably shouldn't be looking to force retailers in a bordering state (New Hampshire) to collect Massachusetts sales tax from Massachusetts customers.

Needless to say, New Hampshire Governor John Lynch is taking exception to that, moving to block any attempts by Massachusetts to collect Massachusetts sales tax in New Hampshire.

Gov. John Lynch said yesterday he will offer a new law to protect New Hampshire businesses from being forced to collect Massachusetts sales taxes.

"We need to send a clear message that Massachusetts and other states shall not impose their sales taxes on New Hampshire businesses," Lynch said.
How is it that one state thinks it can force a neighboring state to collect sales tax, particularly when the targeted state has none of its own? Times may be tough for Massachusetts, but do they really think they're going to get away with their move to impose Massachusetts taxes on New Hampshire? Such a move is ironic, considering Massachusetts' past in regards to taxes.
How ironic it is that the state that once had the gumption to start a war over unfair taxation imposed from afar is now trying to spread its tax tentacles beyond its own borders.

That's right: Massachusetts, the state that boldly took on the tax-happy British Empire, is now doing a little imperial number of its own. And instead of depending on musket-toting militiamen, this time we're using hapless store clerks as our frontline troops.
This isn't the first time the two states have clashed in regards to sales taxes. Back in the 1970's when Meldrim Thomson, Jr. was governor of New Hampshire, he had the State Police arrest and escort Massachusetts revenue agents sitting in the parking lots of liquor stores just over the New Hampshire border, tracking Massachusetts residents buying alcohol in New Hampshire. He knew they had no jurisdiction in New Hampshire and they were told to get out. (Maine tried to do the same thing in the 1990's, stopping cars with Maine registration and confiscating the liquor bought by Maine residents in New Hampshire once they crossed back into Maine.)

How far will they push this idiocy? As far as they possibly can.

The Commonwealth of Massachusetts desperately needs the revenue and they seem to care very little where they get it, as long as they get it. If they win this legal challenge they stand to collect millions from New Hampshire retailers. (I have no doubt that should the Massachusetts Supreme Judicial Court decide in the Commonwealth's favor that an appeal would be filed in the Federal Appellate Court.) Such an outcome would open up a host of other possible revenue grabs by Massachusetts. What would the folks running the People's Republic of Massachusetts plan next? Maybe demand a cut of New Hampshire's Rooms and Meals tax paid by Massachusetts residents vacationing in New Hampshire if they stay at a hotel chain that also has hotels in Massachusetts? What about a portion of the gas tax when Massachusetts residents buy their gasoline in New Hampshire from a gas station chain that also has franchises in Massachusetts? I certainly wouldn't put it past them. Never mind a little thing called the United States Constitution, and particularly the commerce clause.

It's no wonder that at one time New Hampshire's governor, the late Meldrim Thomson, wanted the New Hampshire National Guard to have its own nuclear weapons in order to protect us against the socialist predation of the People's Republic to our south.

It may have not been such a bad idea.

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