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JLeslie's avatar

If sales tax in your town was 9.75% and the next town over was 8% would you shop at the stores in the lower tax rate?

Asked by JLeslie (54569points) August 3rd, 2012

Let’s say it doesn’t take you out of your way, but previously you were shopping in the stores in your town, because it gave money to the tax base in your community and helped your property taxes be lower. So, there is a little bit of adjustment for where you do your shopping, but it is minor.

The situation is my town just voted to increase the sales tax from 9.25% to 9.75% to supposedly help schools, because they also voted to break away from the county school system. I was then thinking that if other towns nearby actually cut their tax rate, they might wind up with more revenue in the end than at the old rate of 9.25%, because people might significantly alter their shopping habits.

FYI: Groceries are taxed where I live.

How much of a difference would the tax rate need to be for you to change your shopping habits, or to even contemplate how much the tax is in general that it would even be considered.

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25 Answers

elbanditoroso's avatar

Depends on what I am buying, and the distance to drive.

If I am buying a $5.00 item, then the additional tax is about ¾ of a cent. I would spend $3.50 in gas to get to the next town. So it is a net loss.

On the other hand, if I am buying a $4000 furniture set, the difference would be about $70.00. So it would be worthwhile to make she drive to save $70.00

Pied_Pfeffer's avatar

Friend, I feel your pain. Like @elbanditoroso it depends upon what the item needed/wanted is, as well as the price. With clothing, I usually wait until I’m back in Virginia where the sales tax is 4% vs. the 9+% where we live.

GracieT's avatar

Another thing that I would consider is the stores in each area. If the stores in your area are local stores but the ones in the next area are big box (think Wal-fart) I would definitely NOT support them!

syz's avatar

Maybe for big ticket items.

JLeslie's avatar

@Pied_Pfeffer Will Bartlett stay at the lower rate? I assume the parts that are part of Memphis will, and that Cordova will?

What I was wondering is if Memphis actually lowered their rate now 1–1.5% if they would attract a lot of business.

I voted no in Lakeland for the tax increase, but when I lived in Palm Beach County, FL I voted yes to go from 6% to 6.5%. The neighboring county was 5%. But, I had to drive farther than what I would have to here to alter my shopping so I rarely thought about the tax difference. Plus, most groceries were not taxed, and I think groceries are a big deal, since it is something we buy all the time, and they add up.

JLeslie's avatar

To clarify the stores are all basically the same. Walgreens, Kroger, lowes, Home Depot, etc. Driving is usually about the same distance, but you will be putting tax money outside of your town, and you have to alter your shopping patterns, but again the distance is about the same. For instance, there are three Kroger’s (grocery stores) near me. All about 5–6 miles away. I think one of them will now be in a lower tax rate. I shop there now about half the time. Currently it will be just a .5 difference. But, if it went to a greater difference I think I definitely would redirect my shopping to go there most of the time.

SavoirFaire's avatar

No. I cannot bring myself to be that obsessive over something as worthless as money. I can understand why someone who really needs to count every penny just to get by would do this, but no one else has an excuse.

josie's avatar

Yes. They have the power to raise taxes, I have the power to attempt to avoid them.

ragingloli's avatar

No, I would not.

zenvelo's avatar

In my area, there was ¾% differential between some towns and others, but it wasn’t enough to cover the cost of driving. And for cars, the State of California makes sure you pay the sales tax differential to the county you live in anyway.

I bought a car in one county that at the time did not participate in the regional transit program so they were ½% lower. After I registered my car in another county I got a dandy bill for $80 for unpaid sales tax.

codette's avatar

Currently I live at a state line. The neighboring state has no sales tax so we do nearly all our shopping there. However, the neighboring state also has the closest shopping centers by far, so it is also a matter of convenience for me. For unique products, such as the produce market I love, I will shop in the state that taxes. But for less unique businesses/products I would probably oscillate between in-the-moment convenience and how many pennies I need to save that week. However, I have not considered how my sales taxes affect my community. Now, when I really settle down somewhere one day, I will know to ask myself such questions.

SpatzieLover's avatar

I would shop online as much as possible with either of those tax rates. When we go to Chicago, we buy almost zilch other than food due to their ridiculous sales tax.

A lot of people in my locale will drive out of a particular county to buy their big ticket items to save on the tax.

YARNLADY's avatar

No, I think it would be far more effective to become politically active and make sure the taxes collected actually went to support my community, and not just wasted.

athenasgriffin's avatar

Wow, I didn’t know local sales taxes were a thing that could be done. I wouldn’t, personally, just seems like too much work. Here only property taxes vary based on location, and it would certainly be something I would consider before moving. It strikes me as very wrong to have differing sales taxes in different regions of one state. Lets say you are very poor living in a high-tax community, you might not have a car to avoid the taxes even if you wanted to.

WestRiverrat's avatar

I would not go out of my way to to to the next town, but if I had to make a trip over there, I would do my regular shopping at the town with the lower tax rates. That is assuming the list prices are the same in each town.

zenvelo's avatar

@athenasgriffin It’s not at all unusual near state borders and national borders. I have a friend who grew up in Bellingham, Washington. When she was young it was not at all unusual to drive to Canada to go shopping for food or Christmas presents. The Canadians would drive into the US for booze and tobacco that was taxed much lower.

Californians that go up to Lake Tahoe for the weekend have been known to pick up cases of beer and cartons of cigarettes in Nevada.

JLeslie's avatar

@zenvelo I think the law is if you visit Canada for less than 4 days you have to pay tax on the items as you come through customs into the states. Or, that used to be the law, it may have changed.

jerv's avatar

Many people in the area go out of their way make shopping trips to NH for that reason. Trust me, you really cannot beat 0.00% sales tax.

Now, this is a hard question for me to answer simply because distance is an issue and has been everywhere I have lived. Where I am now, I have a Kroger store about 100 yards away, and my car costs about 15 cents per mile in gas. Despite Kroger’s higher prices on many things, it’s far more cost-effective to endure the price-gouging.

@athenasgriffin I hear that! WA sales tax is only 6.5%, but King and Snohomish counties both pay 9.5%. (Liquor incurs a 20.5% sales tax plus a Spirits tax!) Some places just gotta have their taxes.

elbanditoroso's avatar

@jerv – it’s all relative. Where i live (suburban Atlanta) the major groceries are Kroger and Publix. Publix is appreciably more expensive.

And of course, they generally build their stores across the street from each other – or within a half mile max.

JLeslie's avatar

I would pay more to shop at Publix.

ETpro's avatar

It depends I do factor in travel cost and loss of time in the trip.

NoBusyBody's avatar

Have you considered moving? We moved for the schools, but a bonus was lower sales tax in our new county/town.

Pied_Pfeffer's avatar

@JLeslie You may think that this is shameful, but I don’t pay attention to the local government, especially when it comes to taxes. I’m planning to move.

It all comes down to the bottom line on a personal level. I’ve lived in the Memphis area for 20 years, and I’m still paying much less in utilities for a house than I did while living in the Chicago area in an apt. In Virginia, while the sales tax is lower, the property taxes are much higher and include other items, such as vehicles. It’s just a matter of doing the research on the front end based upon what is important.

jerv's avatar

@NoBusyBody Moving isn’t free. Transportation, first and last months rent plus deposit, application fees…. it can get expensive. I think our cross-country move cost us a couple of grand by the time all was said and done, and that was traveling light and moving in with somebody who already lived here, thus negating the need for another $2400 to set up our own apartment; we only needed $90 to get put on the existing lease.

Also note that NH may not have had sales tax, but heat was $1500/yr even before propane/oil prices went through the roof. Save on taxes, pay somewhere else; my heat plus electricity here is cheaper than heat alone back East.

JLeslie's avatar

@Pied_Pfeffer Not shameful at all. The only reason the whole issue truly bothers me is because of other problems I have with this area. The overall feeling here that public school is a waste, that Memphis children are a waste, and that how divided the races are drives me crazy. I was talking to a couple women at a get together last night and one of them, she was from California, brought up something about housing prices, cost of living, salaries, etc. Anyway, I pointed out that executive salaries are pretty competitive here to most of America, not Cali or NYC, but most American cities, but the lower levels the pay here is terrible. So, the other woman pointed out that it is because at the executive level the companies pay what os competitive in the nation, because of course they do national searches to fill positions, but at the lower levels they just have to pay what Memphis would pay. Of course she is right. I don’t know, I just can’t stand anything anymore that sounds like, “we can get away with paying them nothing, because they don’t know any better and we can.”

So, my annoyance at the tax is my annoyance really about many things, and the tax symbolizes in a way how dissappointed I am about some of the situation in this area.

My taxes overall are very similar to when I lived in FL, because my property tax is a little less, but my sales tax is higher. My utility bill is much higher here. My house insurance about the same, my car insurance less.

The wealthy make out like bandits here compared to the poor. The tax on food bothers me the most. In FL the wealthy do well also with no state income tax, but we let the poor eat.

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