Mass. retailers want voters to cut sales tax

Shutterstock/File

Unable to get action on Beacon Hill, the state’s biggest trade group for retailers wants to ask voters to lower the sales tax in Massachusetts.

The Retailers Association of Massachusetts said it is filing four versions of an initiative to reduce the sales tax with the state attorney general’s office, ahead of the deadline Wednesday to get a question qualified for the November 2018 ballot.

One proposed ballot initiative would cut the state sales tax from 6.25 percent to 4.5 percent, and a second to 5 percent. The other two ballot questions include those tax reductions, as well as language that would create a permanent two-day sales-tax holiday in August.

The sales-tax holiday has been a major priority for the trade group. But for the second year in a row, state lawmakers declined to authorize the tax-free shopping weekend, saying the government could not afford the $20-million-plus in forgone revenue because of sluggish tax collections and a tight budget.

Jon Hurst, president of the Retailers Association of Massachusetts, said the group expects to decide by late September which of the four initiatives to pursue. Hurst said he’ll weigh public opinion as well as the sentiments of his group and other business associations. Then the retail group expects to start gathering signatures to get the question on the ballot next year.

Massachusetts retailers complain they are in unfair competition with merchants in sales-tax-free New Hampshire and, more significantly, against online outlets in other states that don’t collect sales tax from Massachusetts customers.

“These online sellers have a 365-days-a-year Massachusetts sales tax holiday, and they don’t confront some of the other high costs of operating in Massachusetts,” Hurst said. “It’s time to start stating the truth here publicly that our small businesses are in jeopardy. We need to get Beacon Hill to understand that. We need voters and consumers to understand that.”

The state Senate is creating a task force to study some of these issues. And the Baker administration tried to help with a new policy clarifying when large online retailers without stores or warehouses in Massachusetts should collect sales taxes from local customers.

Online sellers challenged that directive in court, and the administration retreated.

So now state officials are taking a different tack, writing regulations that would allow the state to collect sales taxes through those online vendors, a more deliberative process that would give the public the opportunity to comment.