Wednesday, May 20, 2009

Calculate Your New Hampshire Retail Radius

What's the New Hampshire Retail Radius, you ask?

Your NHRR is the distance you'd need to drive to get to a retail store in NH to break even on the money you spend on gas, and save by not paying sales tax to Massachusetts.

No one would think of driving 50 miles, there and back, to pick up a CD or a six pack of Bud, but for bigger purchases, it can definitely be worth your while to make the trip.

New Hampshire Retail Radius

C = Cost of item(s) you are purchasing ($)
M = Your vehicle's gas mileage (mpg)
G = Price of gas(dollars/gallon)

Your current NHRR (based on 5% MA sales tax)

Your revised NHRR (based on a 6.25% sales tax)


For a new TV that costs $1,299 retail, in a vehicle that gets 20 mpg, and paying $2.20 for a gallon of gas, your NHRR with a 6.25% sales tax in MA would be 369 miles.

So, if you can get to a retail store in NH, driving fewer that 369 miles, you will come out ahead in the end. Feel free to revise that number slightly to account for the added wear and tear on your vehicle.

If you have to drive on a toll highway to get to NH, replace the top term in the formula with "(0.03125C + T) x M" where T = tolls (in dollars).

See you at Best Buy.

UPDATE: This version might be more useful to you.

Calculate your New Hampshire Cost Cut-Off (NHCCO). This is the amount of money you'd have to spend to make it worth your while to drive into New Hampshire to make your purchase. The formula for calculating this value based on a 6.25% MA sales tax is as follows:

G = Price of gas (dollars/gallon)
D = The distance from your house to the NH retail store (miles)
M = Your vehicle's gas mileage (mpg)

If you live 28 miles from a New Hampshire Best Buy store, drive an 18 mpg truck, and gas costs you 2.26 a gallon, your NHCCO value is $112.50.

For the current MA sales tax rate of 5.0%, use this one:

This has been a public service announcement. The material above should, in no way, be taken as an endorsement of tax evasion or other illegal activity. We trust that all of you who make any such purchases will declare the same on your Massachusetts tax return.

UPDATE II: Reader, notDilbert, posted a similarly revised formula in the comments, and adds that your D value should be the difference between the distance to your local retailer and the distance to the nearest NH retailer.

Good point. Here's a handy pictorial guide for you to share with your friends and family.

(click to make more biggish)

Unless, of course, you subscribe the Jay G. way of thinking.

Plus there's the "f*** you" factor of depriving these a******s from their lifeblood (tax $$$).

How can you put a price on that, really?

Simple answer? You can't.

UPDATE III: Save the planet!

Buy a fuel-efficient hybrid vehicle and watch your NHCCO plummet!

That's some pretty sweet irony right there. I wonder if Massachusetts will start requiring residents to purchase gas-guzzling vehicles to fight the inevitable shoppers' exodus, once the sales tax hike gets signed into law.