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When I was a kid in the 1980s we used to go to Kittery Maine (from Massachusetts) for shopping expeditions and the explanation given was that there was no sales tax there.

On looking at the history of sales tax in Maine I see that Maine has always had a sales tax nearly as high as Massachusetts. What is the explanation for this? Did Maine have local sales tax free zones?

  • This is particularly weird since you have to drive through NH to get to Maine without going through Canada, and NH has no statewide sales tax - I am not sure about local municipalities. Possibly you went to NH to get goods and went over to Kittery for some other reason, like a particular restaurant, since it is just over the border? – clcto Jun 5 '17 at 17:04
  • @clcto Kittery is a shopping nexus. People go to Kittery to shop, not eat. The question is why? – Five Bagger Jun 5 '17 at 18:08
  • I remember going to ME for lobster when making trips to NH to make large purchases and alcohol so I thought you could be mixing memories is all. – clcto Jun 5 '17 at 18:54
  • Could it have been that Kittery was just the closest outlet mall at the time? Google Maps just shows 3 outlet malls in the area: Kittery, Wrentham MA (close to RI), and Merrimack NH (which looks pretty small in comparison). I don't know when any of them opened. – clcto Jun 5 '17 at 19:04
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I had the same experience as a kid in the 80's. I think there are three reasons, and none of them relate to taxes:

  1. Kittery Trading Post was (is?) an awesome store.
  2. LL Bean was close by so trips to Kittery often included a trip to LL Bean. Everyone loved LL Bean back then.
  3. I think even back then there were outlet stores in Kittery so people were getting discounted prices rather than tax savings.
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    This. Kittery was a concentration of outlet stores. – Beanluc Jun 5 '17 at 22:38
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Did Maine have local sales tax free zones?

Sales tax can be set by states, counties, and cities, where the total or combined sales tax rate is the sum of each individual tax rate. Currently, while Maine has a tax rate of 5.5%, York county and Kittery both have a tax rate of 0%.

What is the explanation for this?

It's hard to find historic tax rates for municipalities, but it is likely that the combined tax rate of Kittery was lower than the combined tax rate of surrounding areas.

  • Well, if it is combined then it is not tax free. – Five Bagger Jun 5 '17 at 15:33
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    @FiveBagger I guess the county and city taxes will be tax-free components [of the total sales tax]. – TripeHound Jun 5 '17 at 15:38
  • The question is why was it a shopping destination? If there is no significant tax advantage then it doesn't make sense. – Five Bagger Jun 5 '17 at 15:49
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    @FiveBagger sales tax discount is not the only reason for a shopping center, or a group of shops, to exist. – Nosrac Jun 5 '17 at 15:55
  • @FiveBagger The implication is that it's cheaper than a next-door county/city that did charge a non-zero component. – TripeHound Jun 5 '17 at 15:55

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