No word yet on sales tax holiday
PHOTOS/GRANT WELKER
Whether or not the state will hold a sales tax holiday in August still remains to be seen.
With August approaching, Massachusetts retailers and shoppers are still waiting to see if they'll be granted a two-day break from the state sales tax or if Beacon Hill will skip the popular holiday for the second straight year.
The weekend-long August reprieve from the 6.25 percent sales tax has been signed into law in 11 of the past 13 years and cheered by retailers who say it boosts their sales during an otherwise slow period. Lawmakers eschewed the idea last year, pointing to sluggish revenue growth.
Amid a tight budget picture once again, representatives of a retail group asked the Joint Committee on Emerging Technology to support a bill that would write an annual sales tax holiday into state law or otherwise put forward a bill scheduling one for this year.
"It really is important to our membership," said Bill Rennie of the Massachusetts Association of Retailers. "The retail landscape, as we all know, is changing. Our members compete every day with New Hampshire and with online sellers, sellers like Ebay and Overstock who do not charge sales tax. We've been fighting for decades now to try to get a level playing field with regards to sales tax collection. Until we reach that point, somewhere in the future hopefully, the sales tax holiday at least has provided a two-day equalizer."
Last year, legislative officials on July 18 ruled out the idea of holding a 2016 sales tax holiday. Exactly a year later, no firm commitment has been made either way about 2017. Revenue growth is still very sluggish but no one has come out and said the tax holiday will not be scheduled.
Rep. Joseph Wagner, the Economic Development Committee's House chairman, told the News Service he "wouldn't know at this point" whether a sales tax holiday would be scheduled this summer and said he does not "know that there's an appetite" within the Legislature for a permanent holiday.
"Unfortunately there are times, particularly last year, where I think we would have hoped to do something, in order to be consistent with what we did in prior years, but the revenue picture was so concerning that we were not comfortable that we could do it," the Chicopee Democrat said. "I speak only for myself on the matter, not for any of my colleagues. I think it is a pro-consumer type of thing, and personally I like it."
A bill (S 198) before the Economic Development Committee, sponsored by Senate Minority Leader Bruce Tarr of Gloucester, would establish an annual two-day sales tax holiday on a weekend in August, charging the commissioner of revenue with setting the specific dates by July 15 each year.
Similar bills seeking to make the holiday permanent, filed by House Majority Leader Brad Jones and Rep. James Dwyer, are before the Revenue Committee. Jones, a North Reading Republican, has also filed bills to set a sales tax holiday for August 12 and 13 of this year (H 1548) and for August 11 and 12 of 2018 (H 1549).
The Revenue Committee heard testimony on the sales tax holiday bills last month and has not referred any of them to the full Legislature at this point. A committee vote has not yet been scheduled on the bills, a staffer said Tuesday.
Though most of the legislation is before the Revenue Committee, the last six sales tax holidays came from bills that originated from the Economic Development Committee or were attached to larger economic development bills, Rennie said.
Last year, in the absence of the traditional holiday, several stores held their own promotions, marking down merchandise 6.25 percent to match the sales tax rate or otherwise offering discounts.
"By and large, it just didn't work," Rennie said. "There's just something mentally, in the consumer's mind that they essentially get to beat the state for that one weekend. Folks do not like to pay taxes. If they get the opportunity to avoid that, they will."
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