Amidst Strong State Returns, DiNatale's Backing of Sales Tax Holiday Likely (07/07/10)
Posted 2010-07-07 08:13:50
Sales-tax holiday is on the table
By Matt Murphy, mmurphy@lowellsun.com
Posted: 07/07/2010 06:37:38 AM EDT
BOSTON -- As Bay Staters wait for a reprieve from the heat, House lawmakers may be ready to provide a little relief for their wallets.
The House today is expected to vote on two proposals to revive the state's summer sales-tax holiday that would designate a weekend in August when shoppers could avoid paying the state's sales tax.
The tax holiday would also provide a boost to business during the summer vacation season.
"We feel this stimulus would go a long way toward bringing back a lot of the sales we lose to New Hampshire and the Internet," said Jon Hurst, president of the Massachusetts Retailers Association. "This is where we disagree that it costs the state money. We believe a lot of the sales are ones that would go out of state or impulse buys."
After five straight years of giving consumers a summer break from the sales tax, lawmakers were reluctant in 2009 to part with sales-tax revenue in the midst of a deep budget crisis. The decision to skip the holiday also coincided with the increase in the sales tax from 5 percent to 6.25 percent.
The House today is expected to take up a broad economic-development bill that Republicans and at least one Democrat intended to try to amend to include the sales-tax holiday for a weekend in August.
The 16-member Republican caucus has filed one amendment that would set aside Aug. 21 and Aug. 22 as a sales-tax-free weekend. Rep. John Binienda, D-Worcester, filed a separate amendment for the weekend before.
"We will see," Hurst said. "It will be interesting to see if they say yes, if they say no, or if they say they need more time."
The Department of Revenue estimated that in 2008 the state forfeited $14.9 million in revenue over the last sales-tax holiday weekend. The state's uncertain financial picture has been used by many Beacon Hill lawmakers, including Gov. Deval Patrick, as the reason for holding back on a promise to support the tax holiday.
The effort, however, got a boost yesterday when Secretary of Administration and Finance Jay Gonzalez announced the preliminary tax collections for June showed the state had collected $138 million more than anticipated.
Gonzalez also said he expects the state to close the fiscal year, which ended on June 30, $67 million above estimates.
"This is a positive indicator that the commonwealth is continuing on a path of economic recovery," Gonzalez said.
Many local lawmakers, including the Senate's chief budget writer, Steve Panagiotakos, had said they would like to support a sales-tax holiday if the state could afford it.
"This is great news," said Panagiotakos, a Lowell Democrat, referring to the June revenue numbers. "I've supported (tax holidays) in the past. I just want to be cautious given the times we're in before I commit to supporting it this year. We'll have to wait and see what the House does."
Rep. Stephen DiNatale, D-Fitchburg, said the good financial news for the state would help solidify his support for the sales-tax holiday to help businesses in his district near the border.
"Those numbers are pretty good," he said. "If those hold true, that's something I think we could even gain more from with the holiday. So, yes. If those numbers can be substantiated, I will probably support it."
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