CONCORD – Attention border-crossing shoppers: You are being watched.

A Massachusetts Republican gubernatorial candidate is tracking shoppers to see if New Hampshire businesses are taking Bay State sales tax dollars.

Republican Christy Mihos has set up a camera that links to his Web site a streaming video of every car crossing the state border into Salem's Route 28 retail strip where shoppers pay no sales tax. This brings attention to the Massachusetts sales tax that on Aug. 1 will increase by 25 percent, from 5 percent to 6.25 percent.

Mihos

Last night at Salem's Mall at Rockingham Park, shopper Betty Little of Haverhill, Mass., had not heard of Christy Mihos or his hidden camera.

"I come here all the time," she said. "You get better stuff up here. Better and cheaper stuff. If they want to keep upping the price (in Massachusetts) maybe we'll just stay here."

Standing outside of the mall's Dunkin Donuts, Brian Mercer of Methuen, Mass., said he does all of his shopping in New Hampshire.

"The sales tax doesn't make much of a difference, but we do our food shopping and home goods shopping in New Hampshire and it adds up," he said. "We're a hop, skip and a jump down the street. We love New Hampshire so much, we might move here."

As for Mihos' camera, Mercer said it was just a political ploy.

"He's running for governor and that's the thing ... He's just trying to prove a point," Mercer said.

Helen Willder of Tyngsboro, Mass., was at Nashua's Pheasant Lane Mall yesterday.

She said the sales tax increase will influence her shopping.

"I think we pay enough taxes as it is in Massachusetts," she said. "You know, Governor Dukakis used to say, 'Taxachusetts.' I feel a lot of people are going to come to New Hampshire."

Boneet Goodin, 26, of Dracut, Mass., who was also shopping in Nashua, said, "Definitely for the higher ticket items, I would take the time to drive up. But I think people are creatures of convenience ... They're opening up a Target in Lowell, so maybe I'll go there."

Commenting on the Boston Herald's Web site yesterday, one person wrote, "Checking in on my new laptop that I purchased in NH. Come and get me."

The tax hike will make Massachusetts "even more uncompetitive with New Hampshire," Mihos' Web site states.

"The governor and legislature have done a wonderful thing "¦ but only for the good people of New Hampshire," the site states. Mihos estimates the tax hike will cost Massachusetts 13,000 jobs and $60 million annually in investment activity.

Under the heading "It's MassBackwards" and a video of cars streaming back and forth across the border, Mihos writes, "It's sad to watch the steady stream of Massachusetts residents voting with their feet and going to New Hampshire to do their business.

A simulated traffic counter, based on a traffic study, indicated yesterday that more than 156,000 cars have crossed into New Hampshire since July 17.

Nancy Kyle, president of the New Hampshire Retail Merchants Association, said: "if he's just taping cars and counting them, it's really not a new or exciting thing." If the site is used to identify individual vehicles, that would be a privacy issue for Massachusetts residents, she said. Images on the site are less than crystal clear, and license plates are blurry and illegible. Boston media reported that the camera streams video, and does not read or record plate numbers.

One thing that did appear clearly yesterday was a Boston television crew videotaping the Mihos video camera location.

The border camera was set up one week after Gov. John Lynch signed into law a bill that thwarts Massachusetts' efforts to collect sales taxes from customers who buy goods in New Hampshire.

Senate Bill 5 makes it all but impossible for New Hampshire businesses to share sales information with out-of-state tax agents.

The bill passed after what Lynch called an "outrageous" Massachusetts tax enforcement effort against a chain of tire stores with locations in New Hampshire near the state border.

The Mihos campaign did not return calls yesterday.

New Hampshire Union Leader Correspondents Dan O'Brien and Derrick Perkins contributed to this story.