Whiskey Rebellion: Heading Over the Border to Avoid Booze Tax

Live free or die. And please stop by to shop for tax-free alcohol. New Hampshire, which doesn't assess a tax on alcoholic beverages, is surrounded by states that do. And guess what? A disproportionate number of out-of-staters buy booze in the Granite State.

The WSJ discusses the situation, which really can't be categorized as a phenomena. It just makes sense: If folks can save money by heading over the border, well, then they're going to head over the border. A bottle of Ketel One Vodka that costs $21 in N.H. goes for $27.39 in Boston. Where would you buy it? You just have to feel bad for anyone who owns a liquor store in Maine or Massachusetts that's anywhere near the New Hampshire border.

Massachusetts added a liquor tax over the summer, setting up this booze-buying blunder for a Mass. pol:

The crossborder flow created an awkward moment last week for a supporter of the Massachusetts law. State representative Michael J. Rodrigues admitted to buying liquor at a store off the New Hampshire interstate, after being spotted by a tipster who provided photos of the lawmaker's car to the Boston Herald. Mr. Rodrigues, who voted for the recent tax boost, told another Massachusetts daily that he stopped at the store on the way home from vacation. Mr. Rodrigues didn't return calls seeking comment.

There's a similar situation in the Southeast regarding cigarettes rather than alcohol. Florida added a $1-per pack in July. Cigarette sales in July 2009 dropped 28 percent compared to the year before in Florida. Presumably, this means people were smoking a lot less, which is of course good in terms of health. But it's hard to tell how many people were lighting up less—and how many were just heading over the border and buying their cigs in Georgia, where there is no such tax.

Strictly from the money-saving perspective, the drive-to-bypass-tax equation becomes one not unlike the "Seinfeld" episode when Kramer and Newman drive to Michigan to turn in recycled cans for 10¢ a pop. Just how far is it worth driving to avoid taxes?