Baker signs tax holiday bill

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Written by Colin A. Young

STATE HOUSE, BOSTON- Shoppers can expect to pay just a little less at the register the weekend of Aug. 15 and Aug. 16 because of a sales tax holiday law that’s been called both a boondoggle and a boon for retailers.

Gov. Charlie Baker on Thursday morning signed into law the bill suspending the state’s 6.25 percent sales tax for most purchases that weekend.

“This tax-free weekend is not only an opportunity to save a few dollars for consumers, but it’s also an opportunity for people to buy local and keep more business here in the Commonwealth,” Baker said, citing a Retailers Association of Massachusetts report that showed the sale tax holiday boosts retail by over $100 million.

The sales tax will still apply to sales of telecommunications items, tobacco products, motor vehicles, motorboats, gasoline, electricity, meals and items priced at more than $2,500.

“I don’t have a flat screen TV. The Baker family is thinking real hard about what’ll happen the weekend of Aug. 15 and 16 at our house,” the governor said. “My wife and I were looking at each other the other night and saying, ‘when is that sales tax holiday?’ ”

Baker said this year’s sales tax holiday will be particularly important to local retailers whose bottom lines were hit hard by a brutal winter that sidelined many shoppers.
Jon Hurst, president of the Retailers Associations of Massachusetts, said the tax-free weekend helps small “Main Street” businesses compete with online outlets.

“In today’s world of the smartphone, a consumer has unlimited opportunities and options of where they spend their dollars and, increasingly, they’re sending those dollars out of state, to untaxed competition,” he said. “The sales tax holiday … brings actually hundreds of millions of dollars back into the Commonwealth that otherwise would have left our borders.”

The tax holiday bill drew strong support from Republicans, but divided Democrats, with critics of the idea calling it a “boondoggle” and a “gimmick” and minimizing the 6.25 percent savings that consumers would receive by buying items exempt from the sales tax. Tax holiday critics dispute claims that it leads to a burst of economic activity, asserting the holiday instead just shifts consumer buying patterns.

The sales tax holiday bill cleared the House 136-20 and the Senate 27-11. Some lawmakers who voted for it said they did so reluctantly and hoped the measure would get a closer examination next year.

Copyright State House News Service