House leaders rebuff Baker’s controversial sales tax collection plan

Governor Charlie Baker.Jose Luis Magana/Associated Press/File 2018

Some bad ideas die quietly on Beacon Hill. Others get baked into law.

Then there’s the accelerated sales tax collection concept that the Baker administration pushed. Lawmakers adopted a version in their previous state budget but gave state officials an out if they couldn’t pull it off. (News flash: They couldn’t.)

This time around, the concept appears to be dead on arrival. House leaders Wednesday made it clear the idea is a no-go in their budget for the next fiscal year — a rebuke to the Baker administration, which had tried again to get lawmakers on board.

There’s currently a roughly one-month delay between when stores collect sales taxes from shoppers, and when taxes get sent to the state. Governor Charlie Baker’s revenue department wanted to speed that up, by adopting a real-time requirement for credit and debit card purchases. But retailers — including big chains such as TJX and Staples — fiercely opposed it. They said implementing such a system would be a crazy-expensive headache, one that no other state has dared to try. To many, it seemed like a one-time gimmick for an extra month of sales taxes to help balance the budget, a short-term fix for one year.

Now, however, the budget writers have a $125 million hole to fill — the administration’s estimate for a 13th month of noncash tax collections. Legislative leaders will likely continue to account for this amount one month early, a bookkeeping trick they also used for this fiscal year, to cover the gap. One potential long-term fix: House leaders want to create a commission to study the effectiveness of requiring merchants to prepay taxes in the month they’re collected.

Retailers often complain their concerns aren’t heard on Beacon Hill. But in this situation, at least, legislative leaders are listening.