Massachusetts legislators are considering an August sales tax holiday. WAMC’s Berkshire Bureau Chief Lucas took a look at the effect of the popular measure in the Bay State.
In signing the FY 2013 budget, Massachusetts Governor Deval Patrick announced his support for a sales tax holiday. Last year, it was estimated that Massachusetts lost out on $21 million in sales tax revenue. This year, the Governor plans to have the price covered. According to a release filed after the Governor signed the budget, “A supplemental spending plan filed alongside the FY13 budget sets aside an estimated $20 million from a recent one-time payment to the General Fund the Commonwealth recently received to support the popular measure.”
Now lawmakers including House Speaker Robert DeLeo are considering the weekend of August 11th and 12th for a waiver on the state’s 6.25% sales tax.
Bill Rennie, Vice President of the Retailers Association of Massachusetts says that the sales tax holiday…
Rennie said that the members of the Retailers Association reports strong sales only matched by the December shopping season, and that the sales tax holiday draws shoppers to businesses in border communities.
New Hampshire holds no sales tax.
Berkshire County, which borders three states, already has what CEO and president of the Berkshire Chamber of Commerce Mike Supranowicz calls a retail draw…
Supranowicz says that an August sales tax holiday combined with the retail draw, is very effective in boosting retail sales.
Supranowicz also mentioned that businesses often offer discounts on tax holidays, and that can persuade shoppers to make big purchases.
Mike Widmer, President of the Massachusetts Tax Payers Foundation, says that shoppers who may wait until a sales tax holiday to make big purchases don’t change the big picture. He said in addition to making a hole in sales tax revenue, sales tax holidays only persuade shoppers to purchase an item they already planned to buy and have been waiting on, or make an earlier purchase.
Widmer called sales tax holidays a “public relations extravaganza” that is very attractive to “consumers the public, and to politicians.”
In order for the sales tax holiday to take place, the governor would need to sign a bill passed by both houses of the state’s legislature.