Mass. needs sales tax holiday
Bill Rennie, vice president of the Retailers Association of Massachusetts
Early last summer, our elected officials decided against reauthorizing a Sales Tax Holiday weekend for August 2016, saying the state could not afford it. This year we need to bring back the tax holiday, because we can't afford not to.
The retail landscape is changing. More and more commerce is moving online, and local sellers still find themselves at a competitive disadvantage when it comes to sales tax fairness. Massachusetts merchants have long had to deal with the New Hampshire effect, where the draw of sales-tax-free shopping remains strong, but the internet is where the real competition lies.
Thousands of internet sellers continue to exploit a loophole in the law allowing them to sell into our state and avoid collecting the state's 6.25-percent sales tax. A number of states, including the commonwealth, have tried over the years to whittle away at this problem, but until the federal government grants the states the authority to collect from all remote sellers, true sales tax parity will remain out of reach.
This past holiday season, the National Retail Federation reported U.S. retail sales during November and December increased 4 percent over 2015, with non-store sales up 12.6 percent. However, our annual survey of small, locally based sellers showed a 1-percent drop in sales compared to the year before.
Collectively here in the commonwealth, we need to do a better job of incentivizing consumers to spend their dollars locally, here in our economy. Retailers want to partner with local and state governments to support our Main Streets, our local employers, our local jobs and our tax base. Municipalities want vibrant downtowns with a mix of commercial and residential uses, offices, shops and stores, and restaurants. We simply cannot afford to ignore the consumer trends and small business store closures any longer.
While we continue to fight at the federal level and in the courts for national sales tax parity, the Sales Tax Holiday at least levels the playing field for a short 48 hours. And it works. The Sales Tax Holiday is an event exciting consumers, and the state should take advantage of that excitement.
Consumers respond, they save a little money, but most importantly – they spend their money here in the state and in our local economy. Local jewelers, furniture stores, appliance sellers, electronics and auto parts stores all benefit too with a bump in sales. Those sales keep them in business, allow them to restock for the holiday season, and reward and retain their employees.
The economic benefit of a sales tax holiday is multiplied as an investment in our communities, boosting Main Street businesses, providing increased wages for retail workers and rewarding local consumers.
Incentivizing consumers to buy in Massachusetts (#BuyInMA), to spend some money here in the commonwealth with a Massachusetts retailer and allowing them to save a little money is not a bad idea.
Bill Rennie is the vice president of the Retailers Association of Massachusetts.
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