I live in Minnesota so I’m used to the concept of driving to neighboring less tax happy states to acquire cheaper goods, especially goods that are eligible for sin taxes. Many tax happy states find themselves competition, especially near their borders, with their less greedy neighbors and this causes a great deal of friction that ultimately leads to tax happy states protecting themselves by brining legal might against its denizens who shop in neighboring states:
Keeping the old punch bowl filled can get spendy at this time of year, so you can’t blame Juncheng Chen for making an epic party run to try to keep costs down. Unfortunately, officials in his home state of New York don’t like it when their captive subjects drive across the border to stock up in jurisdictions where the booze prices are cheaper. They arrested him earlier this month and issued a press release about law enforcement’s great blow against frugal scofflawry.
“Juncheng Chen, 45, of 136-18 64th Road, Flushing, Queens, was arrested by investigators with the Tax Department’s Criminal Investigations Division after his vehicle was stopped by New York State Police in Rye, NY. The vehicle was packed with 757 liters of liquor, which Chen allegedly purchased at five different liquor outlets in New Hampshire.”
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New York, as it turns out, taxes booze at $6.44 per gallon. Hefty as that sounds, that’s only somewhere around the middle of the pack, as U.S. states go. But people are natural comparison shoppers, and bargains abound. “Spirits are taxed the least in Wyoming and New Hampshire, where government-run stores have set prices low enough that they are comparable to having no taxes on spirits,” notes the Tax Foundation. With such a price differential at hand, why not make a long-distance party run and split the savings with some lucky customers?
Well, except that state officials get pissy if they catch you.
Statists are often baffled by the fact that libertarians oppose taxes. In their world taxes are this magical thing that leads to the creating of great products and services. What they don’t see is the dark side of taxation, the force used to collect it. The United States of America is supposed to be one country where denizens of one state can freely travel to and perform business in other states. However, tax laws in one state can lead to legal trouble for people who buy goods or services in a neighboring state. Here in Minnesota the state government actually expects denizens to pay it the difference in taxes if a good or service is acquired in a state with lower taxes. If you don’t, and the state catches you, it can and will bring its law enforcers into the equation to extract the money out of you by force.