Even a limited sales tax would kill the NH Advantage

To the editor:

In a recent opinion by Citizens Count regarding how the current pandemic might affect our state’s tax policy (“Can coronavirus crisis prompt NH tax changes?” May 22-June 4 NH Business Review), the author asserts “Granite Staters might consider a limited proposal, such as a sales tax on luxury goods.”

What your readers should be aware of is that the New Hampshire House just a few months ago considered, and expeditiously killed, House Bill 1492, establishing a tax on the retail sale of certain electronic devices to fund education. This was the epitome of a “limited proposal.” It was also the epitome of the metaphor “camel’s nose under the tent.” Any “limited” sales tax is certain to be followed by requests to expand the list of taxable items. Once it’s passed it becomes “easy money.” Definitions are also problematic, as the Ways and Means Committee report to the House described.

And as I told the House Ways & Means Committee in my testimony on HB 1492 on behalf of the New Hampshire Retail Association, once we can no longer say “tax-free shopping” the New Hampshire Advantage is over.

We’ve seen in the last two months a shift to remote sales and delivery in amounts that previous projections had taking place over several years. That consumer behavior is unlikely to change back, so retailers, particularly of high-end goods, face a bumpy road ahead, competing with retailers who don’t have the costs of physical stores and customer-facing employees along with the cost of protections against virus-spread, at least in the short-term.

By the way, the House voted 320-11 to kill HB 1492.

Curtis J. Barry

Categories: Opinion