One concern is if neighboring states differed too much there would be incentive to exploit the system. We already see issues with purchasing cigarettes in low t

One concern is if neighboring states differed too much there would be incentive to exploit the system. We already see issues with purchasing cigarettes in low tax states and smuggling and selling them in higher tax states. States would effectively be have to have the same system its most permissive neighbor does since geography makes it so easy for illicit enterprisers to smuggle in those benefits. Possible solutions are to coordinate neighboring state activities or to increase enforcement but each of those has its own set of problems.