Bill to set Aug. 15-16 as sales tax holiday

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By Michael P. Norton

STATE HOUSE-Shoppers interested in taking advantage of a temporary suspension of the state’s 6.25 percent sales tax rate should circle Aug. 15-16 on their calendars or set up an alert for those dates on their smartphones.

The co-chairs of the Legislature’s Economic Development and Emerging Technologies met in a basement hearing room Wednesday afternoon and opened up a vote on legislation authorizing a sales tax holiday, which has become an annual event cheered on by the state’s retailers.

Rep. Joseph Wagner of Chicopee and Sen. Eileen Donoghue of Lowell told the News Service they support the bill. Committee members have until 5 p.m. Wednesday to vote on the bill, which is expected to clear the panel.

“It does give certainly the residents of the state and consumers an opportunity to save on taxes, albeit for a two-day weekend,” Donoghue told the News Service. “I know constituents appreciate that opportunity, certainly merchants in the state.”

Many of Donoghue’s constituents shop in sales-tax-free New Hampshire.

“It’s certainly encouraging to have people not go over that border to do their shopping on Saturday and Sunday of at least one weekend and to support local businesses and thereby support local jobs in Massachusetts,” she said.

Under the bill, the sales tax will not be applied Aug. 15-16 on sales of items that cost up to $2,500. The tax holiday does not apply to cars, motorboats, tobacco products and restaurant meals, according to the committee.

In a statement, Wagner said the measure “leads to an increase in sales at a time when retailers could use a boost and allows families to save on a variety of purchases, including back-to-school items.”

A Retailers Association of Massachusetts study, conducted by the Beacon Hill Institute at Suffolk University and released last week, concluded that suspending the tax for a weekend in August would boost sales among Massachusetts retailers by $168 million, add the equivalent of 627 to 860 new fulltime jobs in Massachusetts, and increase disposable income by $37 million.

Critics of the tax holiday say it just shifts buying patterns while denying the state tax revenues. The study estimated the state would see a drop in sales taxes of $18.7 million to $20.1 million.

Newton Democrat Rep. Ruth Balser is an opponent of the sales tax holiday.

“I’ve never been a big fan of the sales tax holiday,” she told the News Service. “I know on the one hand consumers really like it and get very excited about the weekend but for myself I think it’s more important to educate the public about the importance of paying taxes so that we can provide the very important services that the people of Massachusetts depend on.”