Maine considers tax-free zone in Calais region

The government of Maine is considering a radical tax experiment that could have big implications in New Brunswick.

Sales tax would be dropped in Washington County in attempt to attract shoppers from N.B., elsewhere

The State of Maine is considering some radical tax changes that could have big implications for New Brunswick retailers. 2:12

The state of Maine is considering a radical tax experiment to lift its poorest county out of poverty and, if approved, it could have big implications for New Brunswick retailers.

The proposal would eliminate the five per cent sales tax in Washington County. State income and corporate taxes would also be eliminated.

Washington County is home to communities such as Eastport, Machias, and the city of Calais — already a major shopping destination for New Brunswickers.

We are a shopping district and a lot of locals come over for gas, for milk, for grocery shopping … We can be a shopping destination- Calais Mayor Marianne Moore

The tax elimination proposal would encourage more companies to set up business in the county, while bringing more shoppers from across the border, said Joyce Maker, the Republican state representative for the Calais, Me., area.

"I think it would increase that because they come now because of the cost differential," she said.

"I think more people, if they didn't think they had to pay a tax they would come, which would help local business. Any difference will make a difference right now in Washington County."

Sarah Buckley, a Quispamsis resident who drove more than an hour to shop in the U.S., said she's not sure she would make the trip more often if the sales tax is waived.

"It would depend if I was coming for big items," said Buckley.

"Then I would save a significant amount. So, you know, maybe? I think other people would."

Sandy MacLaren, from Pictou, N.S., said that while the prices in Calais are comparable, "when you're saving … just on the tax alone it's worth it."

Plan seen as 'potential priority' by governor

The idea originates with the Maine Heritage Policy Centre, a conservative think-tank that promotes tax cuts, small government, and what it calls "traditional American values."

It is now being considered as a potential legislative priority by Republican Gov. Paul LePage.

"On the surface it sounds great," said Calais Mayor Marianne Moore.

"It sounds awesome that we are not going to have to pay any sales taxes, and that would make us — we're already a shopping district anyway and it would make us more of a magnet I would imagine."

Moore said she does have concerns about a catch; namely that it could mean an end to state revenue sharing. She said her city is already reeling from cuts to state transfers.

"What I would hope is that instead of our Canadian friends driving to Bangor to go shopping, that they would shop local — they would stay in the Calais area," she said.

"We are a shopping district and a lot of locals come over for gas, for milk, for grocery shopping … We can be a shopping destination."

The tax elimination proposal is under consideration by the state's Department of Economic and Community Development. To become a reality, the proposal would have to win approval from the Democrat controlled state legislature.

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