Mexican sales tax hike seen as border boon for Texas

TEXAS – Mexico has raised its federal sales tax in border regions from 11 percent to 16 percent, which matches the rest of the country.

Mexican shoppers spend more than $4.5 billion a year in Texas border cities, according to the Federal Reserve Bank of Dallas. Mexican border crossers account for 58 percent of retail sales in Laredo and 42 percent in McAllen.

The tax hike will cause Mexican shoppers to spend between 5 percent and 10 percent more on the United States side of the border in 2014, according to Thomas Fullerton, an economics professor at University of Texas at El Paso.

“This tax increase gives Mexican nationals an excuse to shop and spend money on the U.S. side,” said Steve Ahlenius, president of the McAllen Chamber of Commerce.