State vs. State: Hot Summer for States Stealing Businesses, Workers, Tax Revenues

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So much for the United States. In skirmishes around the country, states are battling it out with their neighbors—and sometimes, states in other time zones—over sales tax revenues, marijuana taxes, weapons manufacturing businesses, and the pool of local labor.

Here are a few of the ongoing state-vs.-state showdowns:

The Dakotas vs. Minnesota: The Battle for Businesses and Workers
Both North and South Dakota are “making brazen overtures” to entice workers and business owners to leave Minnesota and head west over the border, according to the Minneapolis Star Tribune. As the Dakotas like to point out, they both have low unemployment rates—3.3% in North Dakota and 4.1% in South Dakota, compared to 5.3% in Minnesota and 7.6% nationally—as well generally lower taxes for individuals and businesses alike.

North Dakota, which has enjoyed an oil boom, has already had some success attracting Minnesotans. In 2011, 4,740 of them moved to North Dakota, which was experienced job growth of 30% over the past decade, compared to just 3.2% in the Land of 10,000 Lakes. And North Dakota wants more: The state’s chamber of commerce paid for a new billboard on the interstate between Minneapolis and Fargo that reads “North Dakota: Open for Business.” A second billboard may go up in the heart of the Twin Cities.

Washington vs. Colorado: The Battle for Pot Tax Revenues
Everyone assumes that legalized recreational marijuana will be big business in Colorado and Washington, the first two states where voters have approved the non-medical use of cannabis. It’s been estimated that consumers will buy 187,000 pounds of pot annually in Washington state alone. Now, Businessweek reports that the two states are racing each other to see who can begin reaping billions in tax revenues from legalized pot first.

(MORE: A Starbucks for Pot? National Chain of Marijuana Stores in the Works)

Since state residents are expected to represent the vast majority of marijuana customers, Colorado and Washington aren’t exactly competing head to head. But each will try to establish itself as the “pot tourism” destination of choice. And both are in a logistical competition to figure out how to tax marijuana sales without running into trouble with the federal government, which still labels cannabis as illegal for consumption. One of the ways Washington convinced voters to approve the legalization of recreational marijuana was by projecting that as much as $2 billion in new taxes could be collected by the state over the course of five years. The actual amount collected, however, “could be as low as zero” if federal authorities step in, the state’s management office told Businessweek.

Washington vs. Oregon & Montana: The Battle for Sales Tax Revenues
In Washington state, sales tax generally adds 8% or more onto most retail purchases. Two of Washington’s neighbors, Montana and Oregon, have no sales tax, however. Such a situation could mean that Montana and Oregon residents avoid shopping in Washington. In order to stop that from happening, for years Washington has offered a nonresident exemption for retail sales tax: Just flash a driver’s license proving you’re from Montana or Oregon—or Delaware, Colorado, Alaska, or New Hampshire, which also have no state sales tax—and you wouldn’t have to pay sales tax in Washington.

(MORE: The Other Complication for Airbnb and the Sharing Economy: Taxes)

A bill working its way through the Washington state legislature would close this loophole and force all shoppers to pay sales tax. “Many Washingtonians apparently don’t like seeing Oregonians get special treatment at the cash register,” explains the Oregonian. Rumors swirl that many shoppers use old or faked Oregon driver’s licenses just to avoid paying the sales tax, and Washingtonians feel burned. Oregon residents may still be able to get their Washington sales tax purchases refunded legitimately by filling out a form once a year, but critics say such a requirement would cause many non-residents to limit how much they shop within Washington’s borders.

Connecticut vs. Gun-Friendly States: The Battle for Weapons Manufacturers
In the aftermath of tragic shootings like those in Newtown, several states have passed tougher gun laws in recent months. The new regulations, meant to save lives, have come to be seen as local job killers, however, as weapons manufacturers in the states have felt forced to consider shifting operations to more gun-friendly environs. Leaders in gun-friendly states such as Texas, Alaska, Nevada, and Mississippi have targeted gun businesses for potential poaching in Colorado, Maryland, New York, and Connecticut.

The latter, where the Newtown massacre took place, and which has hosted a robust weapons manufacturing industry for decades, has seen more than its fair share of out-of-state suitors. In mid-June, the governors of Texas and South Dakota were in Connecticut touring the facilities and making business pitches to Colt, O.F. Mossberg & Sons, and other weapons manufacturers, reports the Hartford Courant. One firearms maker, PTR Industries of Bristol, Conn., announced last week that it is moving to South Carolina. New laws in Connecticut have made all of the rifles produced by PTR illegal in the state. The company held a press conference on Monday in its new home, Aynor, S.C., where PTR executives were greeted by state leaders including Governor Nikki Haley, according to the Associated Press.

(MORE: Under the Gun: Businesses Pressured, Punished in States Passing Tough Gun Regulations)

The Baltimore Sun, which published a piece concerning the strong possibility of Maryland gun businesses leaving the state, reported that Stag Arms, another Connecticut weapons manufacturer, will soon be jumping to either South Carolina or Texas.

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