Ken Bowen went shopping at the Tanger Outlets in Rehoboth Beach, Del., last month even though it’s two-hour drive from his Maryland home.
It wasn’t just the Nike, Under Armour, Hollister and Hot Topic stores that attracted Bowen. Rather, it was the lack of a sales tax in Delaware, compared with the 6% he pays in Maryland.
"I've saved thousands of dollars, for real," Bowen said. "Even gas is cheaper there."
He's one of many who will travel across state lines this holiday season to do their shopping in states like Delaware, Alaska, Montana, New Hampshire and Oregon to avoid paying sales tax. Other states like Minnesota, New Jersey, Pennsylvania and Vermont have exemptions on some clothing items.
Many of the cars at the Tanger Outlets don't have Delaware plates. Many other visitors to the outlets arrive by chartered bus. Some people even travel to the Rehoboth Beach outlets via the ferry from Cape May, New Jersey.
The revenue stream is critical to the Delaware economy, which is aided by an influx of tourism dollars. In 2015, tourist shopping spending totaled $889 million
Steve Chambliss, the general manager at the Christiana Mall in Newark, Del, said out-of-state buses will come and go from the center throughout the season.
Of course, even malls with an advantage of taxes have plenty to worry about this year. An NRF poll found that 59% of Americans will shop online this holiday season. Tracking firm Adobe expects that online sales will be $107.4 billion this critical year-end period, an increase of 13.8%.
But that doesn't deter people like Bowen and Ximena Ortelli from traveling from Maryland to Delaware to save money.
Ortelli, who works for a police department in Maryland, was doing some Christmas shopping last month after driving two and a half hours from Silver Spring. She said she was also getting some winter sweaters for herself.
Ortelli, who said she's been doing "pretty much all" of her shopping in Delaware for the last 20-plus years, likes the sales at the Tanger Outlets. But, of course, the biggest benefit is the absence of sales tax.
Bowen, a 70-year-old Army veteran who lives in the town of Glen Burnie, also enjoys extra benefits besides the tax-free shopping thanks to some veteran discounts available.
"It’s nice getting that little extra kickback from the stores," Bowen said. "It helps in the long run, too."
And, he says, it sure beats shopping in Maryland, where taxes are aplenty.
"If you poop in Maryland, you pay a tax," Bowen said.
Well, he's not wrong. The state does have a tax – adopted in 2004 – commonly known as a "flush tax."
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