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Puerto Vallarta News NetworkNews Around the Republic of Mexico 

Mexico's Sales Tax Hike Bonanza for Texas Retailers

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November 13, 2013

Texas entices Mexico shoppers by offering a sales tax refund for those who have a passport or other document showing they are from a foreign country. As it is, the new tax will be nearly double that in Texas.

El Paso, Texas — When Mexico’s Congress approved raising the sales tax in border states, it sparked angry protests, but it could also boost sales for retailers on the US side.

"With the higher tax, they’re going to drive us to the US to shop," said Veronica Vasquez, a Juarez resident “In Mexico, everything will be much more expensive."

She was carrying large shopping bags after spending the morning at the Outlet Shoppes in El Paso. “I bought several outfits for my nieces and nephews,” Vasquez added.

Call it an early Christmas gift for US retailers from Mexico’s Congress, which raised the sales tax in border states from 11 percent to 16 percent. Mexican lawmakers who support the increase say border residents on average have higher incomes, and should pay the same rate as the rest of the country.

The lower tax rate was supposed to help Mexican businesses compete with bargain prices on the US side of the border. The new tax will be nearly double the rate in Texas which is 8.25 percent.

Texas also entices international shoppers by offering a sales tax refund for those who have a passport or other document showing they are from a foreign country. As it is, shoppers from Mexico already crowd stores in Texas.

"We will probably expect more with the tax change," said Lyndsay Rossman, corporate director of tourism for Simon Malls.

The company has developed a “Shopping Destination” brand for its malls, premium outlets, and Mills shopping centers like Grapevine Mills near Dallas/Fort Worth International Airport. Amenities include coupon books worth “hundreds of dollars” for Mexican shoppers said Rossman.

The Galleria in Houston, also owned by Simon, has long catered to some of the wealthier shoppers from Mexico with VIP and concierge services.

Mexican airlines offer shopping spree travel packages to Houston and Dallas.

La Plaza Mall in McAllen is “eager to see the new direct flight from San Luis Potosi to McAllen launching November 14th on Aeromar Airlines as a great benefit to new visitors,” Rossman said.

The top Simon Mall destinations for Mexican shoppers include La Plaza Mall in McAllen, Cielo Vista in El Paso, the Galleria in Houston, and The Domain in Austin. Many shoppers from Mexico drive or take charter bus tours to Austin, San Antonio, and San Marcos to shop.

Black Friday has become a big draw. Along the border, shoppers from Mexico cross over early on Thanksgiving Day to take advantage of the annual deals.

“There will be a line. They’ll be all over," said Erick Montgomery, the manager at a sporting goods store where Dallas Cowboys merchandise is a favorite with shoppers from both sides of the border. His store like others at the Outlet Shoppes in El Paso will open at 10 pm on Thanksgiving Day for an “All Night Madness” event.

US retailers are looking forward to a shopping season that stretches into January when the sales tax increase in Mexico takes effect. Many families also buy gifts for Three Kings Day, which is celebrated on January 6th.

“The amount of shoppers is going to grow, said Vasquez, who was doing some early Christmas shopping. "We are already coming to the US. Now, we’ll be more eager to do so."

As "Rudolph the Red Nose Reindeer" played over a loud speaker at the mall, she stuffed shopping bags into her truck like it was Santa’s sleigh.

Original Story