Bloomberg is reporting that Connecticut just raised taxes by $2.6 billion. Why does this matter to New Hampshire? Part of the tax increase includes raising the sales tax . . .
It boosts the retail-sales levy to 6.35 percent from 6 percent while broadening it to cover previously exempt goods and services. The rate becomes 7 percent on “luxuries” such as $1,000-plus clothing and boats above $100,000.
Since New Hampshire is the closest state to Connecticut without a sales tax, this will surely mean that more folks from the Nutmeg state will be shopping here more often (or spend more when they do)–just as Maine residents do already.
It would also help if New Hampshire’s policymakers dropped the cigarette tax rate since Connecticut’s cigarette tax is at $3 per pack (the second highest in the country). Also, Connecticut’s sales tax is applied to the price of cigarettes which means their increase in the sales tax rate also increases the total tax burden on cigarettes.
Overall, this is bad news for Connecticut taxpayers but good news for New Hampshire retailers.