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BOSTON (WBZ NewsRadio) — More than half a billion dollars in tax relief is expected to win Senate approval Thursday, and that's not the only action on the tax front due this week.
The Legislature faces a Thursday deadline to select an August weekend as this year's sales tax holiday, when the typical 6.25 percent levy does not apply to most retail items that sell for less than $2,500.
Businesses are eagerly preparing for the next round. Retailers Association of Massachusetts President Jon Hurst said the annual burst of shopping on the weekend without a sales tax generates roughly half a billion dollars in sales, far more than the revenue state government foregoes in those two days.
"We have some members that it's their biggest weekend the entire year. Others say it's comparable to either Black Friday weekend or a weekend in December. It literally brings people out to shop when they otherwise would not be spending dollars," Hurst told the News Service. "It's putting dollars particularly back into the community where otherwise they'd be incented to shop somewhere else, whether it's New Hampshire or online. It gives our consumers a real message that they need to shop like jobs depend on it, because they do."
The House and Senate agreed last year to suspend the sales tax on Aug. 13 and Aug. 14.
Hurst said he'd like to see the second weekend in August -- Aug. 12 and Aug. 13 -- picked again in 2023 because it "strikes the right balance." The Jewish holiday of Tisha B'av, which sometimes falls in August, is on July 26 and 27 this year, minimizing any potential conflict with the sales tax suspension.
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"It's the beginning of back to school [shopping], but if you go much earlier than that, folks are away on vacation and not really focused on spending dollars. If you did it later -- and under the law, it has to be in August -- like closer to Labor Day, there are concerns by some that would cost the state more money in the real heavy back-to-school shopping period," Hurst said.
A 2018 law that raised the state's minimum wage, phased out time-and-a-half pay on Sundays and holidays, and launched a paid family and medical leave program also instructed Beacon Hill to lift the sales tax for one weekend in August each year.
If lawmakers fail to adopt a resolution by June 15 setting the dates for the tax holiday, the revenue commissioner has until July 1 to pick the weekend.
The Department of Revenue estimated that in 2021, the two-day sales tax suspension led to about $33.7 million in forgone revenue for the state.
State lawmakers increased the sales tax to 6.25 percent in 2009 amid a budget crisis fueled by the Great Recession, and since then, the Democrats that wield supermajority margins in both branches have shown little interest in reducing the rate or rolling out a longer sales tax holiday each year.
Gov. Maura Healey, the House and Senate this session are all pursuing permanent tax relief options, albeit with differences in policies and bottom-line impacts, that they say will make Massachusetts more affordable for residents and more competitive with other states.
The Senate on Thursday plans to take up a $590 million relief bill (S 2379) that would boost breaks for renters, seniors, parents and caregivers, roll out new housing tax credits, and double the estate tax threshold while eliminating the so-called cliff effect.
Written by Chris Lisinski/SHNS.
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