U.S. cashing in on Canadian shoppers
Canadian shoppers looking to cash in on the high Canadian dollar are being credited for helping boost tax revenues in popular cross-border destinations across the United States.
Canadian shoppers helped send sales tax revenues over the $400 million US mark for the first time, county officials in New York's Erie County say.
Erie County, which includes the city of Buffalo, is the primary destination for the majority of cross-border shoppers from southern Ontario, including the Greater Toronto Area and Hamilton. Financial officials with the county tell the Buffalo News that sales tax receipts for 2011 increased by 4.5 per cent to just under $401 million.
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New York State has a sales tax of four per cent, and Erie County levies an additional tax of 4.75 per cent on all retail purchases, which Canadian shoppers are also required to pay.
A recent report by the county comptroller's office projects the county would end 2011 with a $26-million budgetary surplus once the year's finances are tallied.
Sales tax revenue in the Buffalo area has fluctuated in recent years as the economy sputtered.
Cross-country benefit
Jurisdictions across the United States have benefited from Canadian shoppers heading south of the border.
Same-day car trips are a commonly used metric to gauge cross-border shopping. In December, Canadians took 2.5 million same-day car trips to the U.S., according to Statistics Canada, a 4.2 per cent increase from November and the highest monthly total since May 1998.
By comparison, 599,000 Americans made same-day trips into Canada in December, according to the statistics agency.
According to a survey conducted by the Bank of Montreal, 18 per cent of Canadians planned to do some of their holiday shopping in November and December in the U.S.
Two other large cross-border shopping destinations are Bellingham, Wash., which is a popular area for cross-border shoppers coming from Vancouver, and Grand Forks, N.D., which draws shoppers from Winnipeg.
According a survey conducted by Deloitte, consumers in Vancouver, Winnipeg and Toronto are the most likely to shop in the U.S.
Bellingham's sales tax is 8.7 per cent, while Grand Forks has a sales tax of 6.75 per cent. However, North Dakota offers Canadian shoppers a tax rebate on purchases of more than $25 US.
Neither Washington or New York offer sales tax rebates to Canadians. Canada used to offer tax rebates to U.S. shoppers, but discontinued the program in 2007.
The Canadian dollar is trading about a half-cent above parity with the U.S. dollar — a rise of two cents in the last month and more than five cents since early October.
With files from The Associated Press