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Town Meeting Members to consider 1 percent option tax on March 22

BRATTLEBORO—Town Meeting members will once again vote on whether to enact a 1-percent local option sales tax at Annual Representative Town Meeting on March 22.

Meeting members last year did not approve the tax, which, in general, applies to items that are already taxed under the statewide sales tax.

The Department of Taxes has a two-page list of taxed and exempted items.

Opponents of the tax fear it will hurt local businesses feeling the strain of a down economy.

“We are urging Town Meeting members to vote against the 1-percent tax,” said Kate O’Connor, speaking in her capacity as executive director of the Brattleboro Area Chamber of Commerce. (O’Connor also serves as vice-chair of the town Selectboard.)

O’Connor said the chamber has received a steady stream of calls from local businesses opposed to the new tax.

The merchants worry about the perception of a tax-heavy town that would drive away consumers, said O’Connor. The business owners are also trying to compete with sales-tax-free New Hampshire and the Internet.

In February, the New Hampshire Retail Association released logos to retailers in that state to promote “Tax Free Shopping in New Hampshire 365 Days a Year.”

When asked if the local-option tax would help glean money from tourists and commuters, O’Connor answered, “It’s not just a tax on tourists. It’s a tax on everyday items” like shampoo, toothpaste, and soap.

Christian Glines, owner of Maple Leaf Music on Elliot Street, questioned the legality of the tax on his business.

About 75 percent of Maple Leaf’s business comes through the Internet, while only 25 percent of the bottom line comes from foot traffic.

If Glines ships a musical instrument from an Internet order to a customer living in a state without a state sales tax, like New Hampshire, he cannot collect sales tax from the buyer. If the town insists on 1 percent of sales, that money will come from Glines’ pocket because he cannot collect it from shoppers living outside Brattleboro.

But however that legal question plays out, Glines is also concerned the added tax will give the town a negative reputation that will drive shoppers away.

“It really is a shame to put anymore obstacles up” for downtown businesses, he said.

John Sciacca, general manager at Brattleboro Subaru, described the projected tax revenues for the town as “a bucket of sand at Hampton Beach” compared to the long-term devastation for the local economy.

When a Vermonter buys an automobile, the state charges sales tax regardless of which state the car was purchased in, said Sciacca.

Yet, consumers already try to avoid the inevitable state sales tax by shopping for cars in New Hampshire, he said. Adding a 1-percent tax in Brattleboro will only make matters worse for local businesses.

“The last thing we want to do is give them more ammunition to kick our butts,” said Sciacca.

A thriving business community is one reason people move to an area, he said, adding that with the upcoming closure of the Vermont Yankee nuclear plant, the area can’t afford to pressure its businesses.

Supporters of the tax believe it would relieve pressure on residential property-tax payers.

According to information from Town Finance Director John O’Connor, adding the sales tax could bring $650,000 in revenue to the town based on fiscal year 2013 tax sales.

In fiscal year 2013, taxable sales totaled $96.3 million. The money would flow from the town, to the state, and back to the town. The state takes a one-third cut of the tax.

The proposed property tax increase is 0.085 cents per $100 of assessed value, according to numbers from O’Connor. Enacting the sales tax could bring in enough revenue to require a property tax increase of only 2.9 cents per $100 of valuation.

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Originally published in The Commons issue #246 (Wednesday, March 19, 2014). This story appeared on page A4.

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