40 percent of all N.J. cigarettes smuggled into state illegally

[southbound_295]

Originally Posted by tahiti

would this "defection" cease if we lowered the tax on cigs? should we just abolish the sales tax too? i'm not trying to be snarky, i truly don't know what the answer is. higher taxes have accounted for less people smoking, especially teens. i'm ok with that.

delaware makes a fortune on their miniscule stretch of 95 to where they can probably afford no sales tax. would we in NJ be willing to toll the hell out of 295 for instance to accomplish the same thing?

Actually, I've heard, repeatedly, that somehow, some way, Dupont is connected to the lack of salestax in DE. You'd have to ask on the DE board how they manage that. On the other hand, I remember when NJ had no sales tax or income tax. That was before the state supreme court started legislating.

I really don't know if the defection would cease if taxes on cigarettes were lowered. Probably, to a degree. . .but people in South Jersey have discovered the wonders of tax-free shopping. Delaware is like a 24/7 duty-free shop. There are small, rural towns in South Jersey that are nearer to the shopping areas in Delaware than to similar areas in South Jersey (Deptford & Cherry Hill).

Keep in mind that the Philadelphia MSA is technically called Philadelphia, Camden, Wilmington. New Castle County is in the Philadelphia metro. Say someone has a sewing machine on sale that you want & you need your hair done & it's about time for new tires. The same sale prices will be valid in Philadelphia, West Chester, Cherry Hill & northern DE. Even if you don't smoke, if you are after certain things, it is more than worth your time & gas to make a trip to Delaware. Pay cash & there's no record. Most people in South Jersey did not even think of going to Delaware prior to McGreevey's 2nd cigarete tax increase. Delaware was not on their radar, with the exception of people in a few small towns near the Del Mem Bridge & the Commodore Barry Bridge.

[NJGOAT]

On the topic of Delaware taxes...

DE does sort of have a sales tax, but it is not paid by the consumer, it is paid by the business as a "gross receipts tax", generally it is 1%-2% of the gross receipts of a business in DE. Small enough that they tend to not pass it through as DE is able to attract a lot of consumers from surrounding states.

Also, DE is the incorporation capital of the US, they have more businesses than people. DE does not charge a business income tax, but they levy an annual and incorporation fee on all businesses incorporated in the state even if they aren't located there. This revenue accounts for over 40% of the states budget.

DE also tolls the crap out of their small slice of I95. This money is used to directly fund ALL state highway construction and maintenance. This toll is also generally paid by people from out of state, not residents so no one with any power complains about it.

Basically DE is uniquely situated to create an economy based on business incorporation and out of state visitors.

On going to DE to shop...

This is something I never did outside of knowing friends who went to DE to buy cartons of cigarettes. It wasn't too long ago when a carton in DE cost $20-$25 while the same thing in NJ cost $55+. It was a big savings and well worth the trip.

Since I moved to the Swedesboro area I have also become enamored with tax free shopping in DE. The major shopping areas in DE are just as close to my house as are the main areas in NJ (Cherry Hill and Deptford). I pay a $4 toll to cross the bridge, but that is easily made up as long as I am buying a sufficient quantity of goods. My wife and I have started planning monthly shopping trips to DE to do the bulk of our shopping. We go to BJ's and Target primarily and save on average about $45 per trip. We also now do all of our major appliance, furniture and electronics shopping in DE. Not only do they match all the prices of stores in NJ (they are generally exactly the same), but you don't pay sales tax either. As long as I am not having something delivered to my house, they don't need to charge me. I bought 3 TV's from Sears last year at Christmas for the bedrooms, no sales tax. Bought a new plasma for the living room at HH Gregg, no sales tax. Went to CompUSA in DE, bought $1,500 worth of parts for a new computer, no sales tax.

Given I COULD buy some of that stuff online, get free shipping and it would ultimately be cheaper, but I tend to like to see things before I buy them and want them in my hand when I do. I can also return/exchange the items at stores in NJ if I do have a problem and not need to take a trip back.

Like I said above, DE's entire economy is built on this.