Study: Tax difference sways shoppers toward NH

It has been a few years since Vermont border towns had the opportunity to take part in a tax-free retail shopping day. With a recent study linking tax rates to cross-border economy, a sampling of local business owners and Chambers of Commerce appears to indicate support for bringing back the event.

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Video: Shopping local, 'Gangnam Style'
"I'm not saying everyone should come from around the country and shop in Rockingham," Mike Smith explained. "I'm saying people from Springfield should shop in Springfield. People from Burlington should shop in Burlington." (FACT TV, 2012)

2017-01-31 / Front Page Study: Tax difference sways shoppers toward NH By TORY JONES toryb@eagletimes.com Jim Clapperton, left, John Spencer and manager Jay Young work on Monday, Jan. 30 at Young’s Furniture and Appliances in Springfield. — TORY JONES Jim Clapperton, left, John Spencer and manager Jay Young work on Monday, Jan. 30 at Young’s Furniture and Appliances in Springfield. — TORY JONES SPRINGFIELD — It has been a few years since Vermont border towns had the opportunity to take part in a tax-free retail shopping day. With a recent study linking tax rates to cross-border economy, a sampling of local business owners and Chambers of Commerce appears to indicate support for bringing back the event. “It did make a difference a few years ago,” said Jay Young, who runs Young’s Furniture and Appliances in Springfield. Young said on Monday, Jan. 30 that he has seen other states such as Massachusetts offering that option. In Vermont, retailers are not allowed to independently offer a tax-free day, but must depend on the state to do so, he said. “It gave people the feeling they could buy something and get a break,” he said. Tina Vittum, owner of Tina’s Hallmark Shop in Springfield, said re-implementing the tax free incentive for a day or a few weekends could be beneficial to businesses on the Vermont side of the Connecticut River. “I think it is a wise thing to do,” she said. The last time a tax-free day took place four or five years ago, she bought a piece of furniture from another Springfield business, she said. A cross-border study shared last week in a Senate committee spotlights tax rate differentials between Vermont and neighboring states. Tom Kavet, an economist with Kavet, Rockler and Associates, presented “The Cross-Border Issue: An Ongoing Analysis Affecting Multiple Taxes” on Friday, Jan. 20 to the Vermont Senate Committee on Economic Development; Housing and General Affairs. The 18-page report included statistics and findings on decades of taxation differences between Vermont and border states, including New Hampshire, along with relations between taxes, population, working commuters, big-box and brick-and-mortar stores, and demographics. The tax most affected by rate differences between Vermont and New Hampshire is the Sales and Use Tax, which was introduced at 3 percent in 1969 and has risen to 6 percent, in effect since 2003. Vermont’s 255-mile border with New Hampshire is “porous,” with 29 vehicular bridges across the Connecticut River, according to the report. “It is clear that the steadily increasing state sales tax differential over the past 47 years, ranging from 3 to 6 percent, has contributed to shopping and development patterns that have shifted significant retailing activity from Vermont to New Hampshire,” the study states. For instance, all six Wal-Mart stores along the Connecticut River border are on the New Hampshire side. However, it also states that the sales tax alone is not the single most, or even the most significant causal factor, all according to the report. Vermont Act 157, sponsored by the House Committee on Commerce and Economic Development and signed by the governor in June 2016, mandated an analysis of “cross-border tax policies and competitiveness with neighboring states,” including impacts on retail patterns, impacts of retail sales and excise tax, and impact by business size. While tax rate differences can result in behavioral economic effects in border towns, other state, local and industry conditions can also affect economics, according to the report. Caitlin Christiana, executive director of the Springfield Regional Chamber of Commerce, said in an email on Friday, Jan. 27 that it has long been known that tax differences between Vermont and New Hampshire border towns have “posed a challenge for the Vermont side.” “It’s common for folks to hop across the river to shop, which makes it more difficult to attract and retain retail businesses in the Vermont border communities,” Christiana said. The topic has been raised in recent Springfield meetings, as discussions of community revitalization and economic development are underway, she said. Christiana said Town Manager Tom Yennerell, the Springfield Selectboard, Springfield Regional Development Corp. (SRDC), the Chamber, Springfield on the Move (SOM) and others have been talking about ways to attract young families and entrepreneurs to our region, due to many jobs to fill, and also due to an aging population in Springfield. “Everything is connected, and so when we start to ask the question ‘How can we entice younger folks to move here?’ … Inevitably, we recognize that having a vibrant and pedestrian-friendly downtown - with restaurants, coffee shops, outdoor recreation space and places to shop - is critical to that endeavor,” Christiana said. That is easier said than done, Christiana said. “But we are all committed to the mission and looking for ways to make it happen,” she said. Christiana said she has heard that it would make sense to consider incentives for new businesses — either tax-free introductory periods for the businesses, or tax free shopping days — to help encourage people to shop locally. She was not sure if any specific plans for tax-free shopping days are in progress yet, but said the Chamber would be interested in being more involved if the conversation gathers momentum. In Springfield, the answer may also be focused marketing, according to SOM Executive Director Stephen Plunkard. Plunkard said he thinks shopping is “very much a routine,” one that might be difficult to change, even if a tax-free day or weekend was allowed. Having several tax-free shopping events throughout the year, rather than one day, would also be helpful, he said. “If we’re going to do something like that, let’s have enough money in the budget to promote it,” he said. In the Bellows Falls and Rockingham area, the Great Falls Regional Chamber of Commerce would also “be happy to support” another tax-free day in Vermont border towns, according to Kathleen Govotski, co-owner of Halladay’s and president of the GFCOC board. Govotski also works on the promotions committee for the Bellows Falls Downtown Development Alliance. GFCOC is based in Bellows Falls, but also serves communities in New Hampshire. “It is very challenging having a business on this side of the river,” said Govotski, who has a retail store in Bellows Falls. Occasionally, shoppers ringing up their purchases will be taken by surprise at the total, realizing that it includes tax, she said. For more information on the cross-border impact study, the report is available at http://legislature.vermont.gov/committee/document/2018/32/Date/1-20-2017. Vt. 'Gangnam Style' parody promotes shopping local November 21, 2012, 7:38 pm NECN (NECN: Jack Thurston, Rockingham, Vt.) - Andrew Adams could become the next big viral video star. "I was very happy to do it," he said of his participation in a colorful music video project in Rockingham, Vt. "Rockingham Style" is the title of the video that costumes Adams in garish blazers as he dances through Rockingham's downtown district, Bellows Falls. The community and business owners are Adams' co-stars. The video is a send-up of South Korean rapper Psy's "Gangnam Style," one of this year's seemingly unavoidable songs that's ripe for parodies. In the video made with equipment from Falls Area Community TV, Adams repeatedly sings, "Shop in Rockingham," set to the karaoke soundtrack of "Gangnam Style." The message encourages folks to buy books, jewelry and other items from local merchants this holiday season. Hardware and sporting goods store owner Jeremy Haskins told New England Cable News he is already hearing from customers who have come in to tell him they saw his business featured in the video. It has been uploaded to YouTube, appears on the local cable access channel and its website, and town residents have spread "Rockingham Style" via Facebook and Twitter. "I think it was fantastic," Haskins said of the idea. "[Customers are] just really relating to it in a positive way. They understand the money that comes into this till and this business is going to be pushed back into their community." Haskins pointed to a donation of paint to a building project at the community’s recreation center as one example of how local businesses and their customers have a symbiotic relationship. Adams' father in law, Mike Smith, thought up the project. He told NECN he is not an economic development official or businessman, just a "normal guy" who works at the area health center and likes making videos. Smith said he realized one day he could use his hobby to support shop owners. "The global economy starts right here," Smith said. "It's across the street. It's with your neighbor." Smith noted that while this project was specific to Rockingham and Bellows Falls, the concept could apply to any shopping district in the country that features predominantly locally-owned stores, restaurants, and service providers. "I'm not saying everyone should come from around the country and shop in Rockingham," Smith explained. "I'm saying people from Springfield should shop in Springfield. People from Burlington should shop in Burlington. People in Boston should support those things in Boston." Leanne Tingay is the coordinator of Vermont's designated downtown program. It falls under the Vt. Agency of Commerce's Dept. of Economic, Housing, and Community Development. Tingay told NECN studies show when you spend a dollar in Bellows Falls or in one of the state's other 22 official downtowns, $.87 stays in the local economy. That’s more than twice what stays local when you spend at big box stores, Tingay said. “It is employing people," Tingay said of box store popularity, "And that's a very good thing, it's just that those dollars don't circulate and recirculate within the community the same way supporting a local business does." Andrew Adams has found his dance is pretty contagious. "People at work have been asking me to dance all day at work," he chuckled. Adams hopes the message behind his wacky dancing, to buy local through the holidays and beyond, is as memorable as the spoof itself. "Being able to put your dollars into your local economy is a very important message," Adams said, smiling. Tags: Falls Area Community Television