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This story appeared on Page A1 of The
Standard-Times on July 13, 2005
House pushes sales tax holiday
By DAVID KIBBE, Standard-Times staff writer
BOSTON -- Consumers would get a break from the
state's 5 percent sales tax again this summer --
this time on Saturday, Aug. 13 -- under a measure
being rushed through the state Legislature.
The sales tax would be waived on almost all retail
items priced up to $2,500, except cars, motorboats,
meals and tobacco. For the first time, the sales tax
holiday would include sailboats, kayaks and canoes
that cost no more than $2,500.
Lawmakers said the state's initial sales tax holiday
-- which took place on Aug. 14 last year -- was even
more successful than anticipated. While the state
lost $10.1 million in sales tax revenues for the
day, businesses reaped $400 million in one-day sales
in what is normally a quiet week.
Some retailers called it their best day all year,
with sales even stronger than the day after
Thanksgiving and the Saturday before Christmas. The
Retailers Association of Massachusetts strongly
lobbied for its return.
The House gave initial approval to the bill
yesterday, 151 to 4. The Senate is expected to take
it up as soon as this week to give retailers time to
advertise.
"Last year, we had this day, and it was such a big
success for all the retailers from all over the
commonwealth, over $400 million in sales occurred on
a single day," said Rep. John Binienda, D-Worcester,
the House chairman of the Revenue Committee.
Individual stores reported increases of 50 to 500
percent over the same time the previous year on
everything from electronics and computers to
clothing, furniture and jewelry. Clothing that is
priced less than $175 is already exempt from the
sales tax.
The retailers association, which conducted a
statewide survey, said small businesses saw bigger
increases than the chains. Small furniture and
appliance retailers reported 1,000 percent increases
in sales over the previous year.
"The holiday brought consumers into stores in record
numbers, at a time of the year when stores are
normally empty," the retailers association said in a
statement.
The retailers said the after-effects carried through
Labor Day, with sales taxes up 2.2 percent for
August.
The idea has strong support in the Statehouse. Gov.
Mitt Romney wanted to repeat the sales tax holiday
this year, and Senate leaders first proposed one in
2003.
"It was a Senate initiative, in the economic
stimulus package, and it was a huge success, $400
million generated in sales, so why not repeat a
successful formula?" said Ann Dufresne, a
spokeswoman for Senate President Robert Travaglini.
"Any legislation that has the potential for creating
jobs and economic activity in this state is worth
revisiting as quickly as possible."
Binienda said the state partially made up for the
lost $10.1 million in revenue by increases in the
gasoline and meals taxes from people traveling to
shop. The state Department of Revenue did not have
an immediate breakdown on the numbers.
The DOR reported that retailers were busier last
Aug. 14 than on normal summer Saturdays. "Reports of
long lines at checkout counters were routine on the
holiday," Commissioner Alan LeBovidge said in a
statement.
State representatives said they were hesitant about
losing tax revenue, but they acknowledged the
popularity of the concept. Massachusetts joined 11
other states and the District of Columbia in
offering at least a one-day break on the sales tax.
"It's a one-time thing," said state Rep. John Quinn,
D-Dartmouth, who sits on the House Ways and Means
Committee. "You're always concerned about taking
revenue off the table, particularly with all the
fiscal problems. It's mid-August, it's a good little
jump start for back to school shopping. It's great
to support some economic activity."
This story appeared on Page A1 of The
Standard-Times on July 13, 2005 |
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