Crossing the line: Out-of-state holiday shoppers flock to tax-free Delaware
Jeff Neiburg
Ken Bowen has been doing his shopping in Delaware for years. The 70-year-old, who lives near Glen Burnie, Maryland, was doing some early holiday shopping last weekend at the Tanger Outlets in Rehoboth Beach, a two-hour drive from home.
He said he likes the outlets because of the variety of stores it offers. He was getting some holiday shopping for some of his family members at Nike, Under Armour, Hollister and Hot Topic.
"I've saved thousands of dollars, for real," Bowen said. "Even gas is cheaper there."
The sales tax in Bowen's home state of Maryland is 6 percent. It's zero in Delaware.
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.
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The National Retail Federation estimates 164 million consumers plan to shop Thanksgiving weekend, a whopping 69 percent of Americans. The numbers include Thanksgiving Day through Cyber Monday.
Down at the Tanger Outlets, general manager Amy Schnerr said they don't count people but do count cars. An expected 83,000 vehicles will enter the parking lots on Coastal Highway between Thanksgiving and Sunday, meaning traffic will resemble a summer holiday weekend at the beaches.
Many of the cars won't have Delaware plates. Especially not the big vehicles.
Schnerr said that out-of-state groups are registered to go to the Tanger Outlets in Rehoboth Beach include a bus from Philadelphia on Thanksgiving Day. Other bus groups include trips from Landover Hills, Maryland and New York on Black Friday. And bus groups from Brooklyn, Camden, N.J., Waldorf, Maryland, Trenton, N.J., Philadelphia and Temple Hills, Maryland have signed up to arrive on Saturday.
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, said out-of-state buses will come and go from the Newark mall throughout the season.
But the numbers are changing. A similar NRF poll found that 59 percent of Americans will shop online this holiday season.
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Adobe expects that online sales will be $107.4 billion this holiday season, an increase of 13.8 percent.
Additionally, Cyber Monday is expected to become the largest online shopping day in history, generating $6.6 billion in sales, 16.5 percent growth compared to last year.
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 weekend after driving two and a half hours from Silver Spring. She said she was also getting some winter sweaters for herself.
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Ortelli, who said she's been doing "pretty much all" of her shopping in Delaware for the 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 U.S. Army veteran, also enjoys extra benefits besides the tax-free shopping thanks to some veteran discounts availab.
"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."
Contact reporter Jeff Neiburg a (302) 983-6772, jneiburg@delawareonline.com or on Twitter @Jeff_Neiburg.