Mexico tax hike could mean more business for AZ border towns - WSFA.com: News Weather and Sports for Montgomery, AL.

Mexico tax hike could mean more business for AZ border towns

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TUCSON, AZ (Tucson News Now) -

With the start of the New Year, Mexico raised its sales tax by 5 percent in cities along the US-Mexico border.

The sales tax in Nogales, Sonora went up from 11 percent to 16 percent, Wednesday, after the Mexican government voted to end a tax break for border cities.

We met with shoppers who normally travel to Southern Arizona to buy clothes, electronics and even food. Some said the tax hike is too much and could hurt their pocketbooks. Many told us, even before the tax hike, they shopped in Tucson and Nogales, Ariz. frequently because prices were cheaper and stuff they bought was of better quality.

Edith Pala-Fox traveled from Sonora to do some shopping in Pima County on New Year's Day. She says the tax is steep, "Yes. With the new taxes it is cheaper and better quality, too. If you're looking to buy name brand clothing, it often comes out to be double or triple more expensive than buying it here."

Andreas Vargas also spent New Year's Day shopping in Tucson. He says despite the increased sales tax in Mexico, it won't affect his shopping habits, "In reality for us. It doesn't make any difference. We will continue coming over and get purchases for the family, clothes and stuff like that."

A study from the University of Arizona says shoppers from Mexico already have a big impact on the local economy.  According to the study, shoppers from Mexico make up for nearly 50 percent of business in areas like Nogales, Ariz.

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