Mexico tax hike increases shopping in Texas


by ANGELA KOCHERGA / KHOU 11 Border Bureau

Posted on November 25, 2013 at 10:04 AM

Updated Monday, Nov 25 at 10:04 AM

EL PASO, Texas -- A sales tax hike on the border is expected to benefit stores in Texas. The new sales tax approved by Mexico’s Congress is double the rate in Texas. Many shoppers said they’ll shop on the U.S. side rather than pay extra.

Call it an early Christmas gift for US retailers from Mexico’s Congress: a sales tax hike on the border.

Veronica Vasquez from Juarez said more people will simply shop in the US  to avoid the new 16 percent sales tax. The tax was previously 11 percent.

The lower rate was designed to help Mexican businesses compete with bargain prices like those at this outlet mall  in EL Paso..

Prices are so good on the U.S. side of the border, Vasquez is stocking up on clothes for the kids.  Texas also entices international shoppers by offering a sales tax refund.

Thanksgiving kicks off the big holiday shopping season, but there is no Thanksgiving in Mexico, so there are already shoppers looking for gifts now.      

Loading their trunks like Santa’s sled, many will cross the border to line up for Black Friday deals.

"There will be a line. They’ll be all over," said store manager Eric Montgomery.

U.S. retailers are looking forward to a shopping season that stretches into January. That’s when the sales tax hike takes effect in Mexico.

It's not just stores on the border that will benefit. Houston is a big destination for shoppers from Mexico and some airlines offer shopping spree travel packages.