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The Boston Globe

Business

Some tax holiday crowds in Mass. rival Black Friday’s

But criticism persists on state’s loss of revenue

The state’s sales-tax-free weekend again drew large crowds to malls, shopping districts, and retail outlets, providing a boost in sales during a typically slow period for Massachusetts stores, retailers said.

Jon Hurst, president of the Retailers Association of Massachusetts, said sales over the weekend, when the state suspends the 6.25 percent sales tax, were at least as high as last year’s, if not 2 or 3 percent higher.

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The trade group estimates that consumers spend as much as $500 million during the weekend, compared to about $100 million for a typical August weekend.

For Direct Tire and Auto Service, sales more than quadrupled from a normal weekend, said Barry Steinberg, the chief executive. On a usual Saturday, the company’s locations in Watertown, Norwood, Peabody, and Natick sell a combined 200 tires; this past Saturday, they sold 870.

“It was all hands on deck,” Steinberg said. “All four locations had a full staff. They were all making overtime, so they were happy. The state’s going to get some of this money back in income taxes. It was a win-win.”

Steinberg said he was surprised by the crowds, considering the savings are relatively small.

“If I ran a sale for 6.25 percent off, no one would get this excited,” he said.

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Critics question whether the holiday is worth the loss in tax revenue, estimated at about $23 million last year, for minimal economic benefit. Studies have shown that tax holidays don’t generate additional consumer spending; customers merely shift purchases they would have made at another time.

But retailers say the revenue losses are at least partially offset by additional income taxes as companies, like Direct Tire, schedule more people to work and pay overtime. Hurst said that tax-free weekends keep sales in Massachusetts that might otherwise be lost to New Hampshire, which does not have a sales tax, or the Internet, where many merchants don’t collect sales taxes.

The pre-weekend promotions, in which some retailers paid sales taxes for customers, probably boosted retail sales, generating additional tax revenues for the state, Hurst said. He added that the weekend also provides a kick-off to the back-to-school shopping season, one of the most important periods on the year for retailers.

“There’s a general feeling that the holiday itself extended beyond the two days,” Hurst said, “a great thing for tax collections, and a very great thing for the consumer.”

Alan Lavine, sales manager at Percy’s, an appliance store in Worcester, described the weekend’s crowds as a “Black Friday-like frenzy.”

“They were replacing things they hadn’t replaced in a while,” Lavine said. “It was very need-based. We heard a lot of . . . ‘I’m sick of fixing this appliance, we’re buying a new one.’ ”

Lavine estimated that sales increased slightly, compared to on the 2012 tax holiday.

And while the crowds were similar in size to Black Friday’s, Lavine said, the atmosphere was different. Customers were calm, polite, and appreciative.

“Not one angry, irate, anything, I couldn’t believe it,” Lavine said. “That’s what happens when the government gives us something. We’re all in this together.”

Emily Overholt can be reached at emily.overholt@globe.com. Follow her on Twitter @emilyoverholt.

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