BOSTON — Many shoppers and small businesses are elated by the idea of an extended sales tax holiday, legislation proposed by Gov. Charlie Baker on Wednesday. His plan would extend the state’s current two-day tax holiday to two full months.
“As of the end of May, tax revenues were $3.9 billion ahead of where we estimated they would be at that time,” Baker said.
His goal is to use $900 million of the surplus for a temporary sales tax cut.
He said this would give an extra boost to consumers and small businesses after many took a hit from the pandemic.
“Can I do my happy dance?” said Jennifer Hill, who owns Blackstone’s on Charles Street in Boston.
Hill was thrilled to hear about this proposal, which could bring a lot more shoppers into her store during those two months.
“Speaking on my behalf, I think it’s great for businesses too, it’s just that extra little relief after a long year,” said Hill.
Democrats have begun to push back against the idea.
“Whether it’s investing in childcare, emerging workforce needs, K-12 education, public health, or families in need, there are no shortage of ways to responsibly invest to support an equitable economic recovery, however, a short-term political gimmick is not one of them,” Tweeted Senator Michael Rodrigues, a Democrat and chair of the Ways and Means Committee.
Critics of the plan include educators’ unions.
“As we emerge from the pandemic, the needs in Massachusetts have never been greater. They require smart decisions that provide for long-term investments in our future. Instead, Governor Baker wants to spend $900 million to boost the profits of large, out-of-state big-box stores and online retailers,” wrote Mass Teachers Association President Merrie Najimy and FT Massachusetts President Beth Kontos in a joint statement.
The Massachusetts Retailers Association sees the proposal as a great way to help small businesses and customers.
“It’s good progressive, public policy to incent our consumers to shop locally with our small businesses, that retains jobs, grows jobs and puts investment into Massachusetts,” said Jon Hurst, president of the Massachusetts Retailers Association.
Hurst said this surplus was most likely from a big increase in online shopping this year.
“All those billions of dollars of transactions throughout the pandemic and with all those sales that went out of state, we still collected taxes on and that gave a surplus to the Commonwealth of Massachusetts,” said Hurst.
Hurst said a two-month tax-free holiday would get more people to shop locally - right around the start of the new school year.
“One weekend in the middle of August is just hard because typically everyone’s away on vacation, so where it might help that big business that sells furniture that’s still under the $2,500, it doesn’t necessarily in August move the needle for Main Street businesses, so this will definitely have a good positive impact,” said Hill.
“It would give you time to look into stuff, said Marianne Tempest, a shopper. “You wouldn’t have to just rush out one weekend.”
As of now, Massachusetts will still have a tax-free holiday weekend on Aug. 14 and 15, but it will be up to state lawmakers to decide on the future of this bill.
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