House passes bill setting this year’s sales tax holiday
Stove on the fritz? Hankering for new speakers? Dying to sock away some snow tires for the coming winter?
The Massachusetts Legislature on Wednesday passed a summer sales-tax holiday, teeing up consumers for a two-day reprieve from the 6.25 percent levy — and lining up what some businesses say would be a helpful boost to sales.
The bill calls for suspending the sales tax on Aug. 15 and 16 for purchases of almost all retail items costing $2,500 or less.
Despite increasing opposition to the tradition, which has taken place in 10 of the past 11 years, both Democratic-controlled chambers on Beacon Hill took lopsided votes in favor of passage: 136-20 in the House and 27-11 in the Senate.
The bill needs other procedural votes before going to Governor Charlie Baker, who is expected to sign it into law.
Earlier Wednesday, Baker said he would want to read the bill first, but “if it’s similar to previous years then I would sign it.”
Baker, a Republican, noted that many people in the state are anticipating the holiday, “and while it’s certainly a close call, if the Legislature believes that this is that something we should do, I’m certainly willing to support that.”
Opponents worry that the tax holiday just shifts sales to the weekend from other times of the year, rather than boosting overall economic activity. And they fret about the $25 million in tax revenue that the state forgoes.
But business leaders said they are excited for the 2015 holiday to become law soon.
Alan Lavine, vice president of sales at Percy’s TV & Appliance in Worcester, said the holiday brings in customers who might not have been thinking of buying something, but with the 6.25 percent reprieve, along with other discounts, decide to pull the trigger on a purchase.
“It’s a fun thing all around,” he said. “And when I say fun, I mean it makes people happy. And when people are happy, they spend money.”
He said the store’s staffing jumps by 20 to 30 percent — “all hands on deck” — to help customers who rush in to buy items such as stoves, dishwashers, and refrigerators.
Customers pay various kinds of taxes all year long, and Lavine said he hears from them that there is something different about the holiday compared with just a regular sale.
“They feel a little bit better taking something back from the state — it’s almost like getting your money back,” he said.
Barry Steinberg, president and chief executive of Direct Tire and Auto Service, which has four locations in Massachusetts, said he is looking forward to the 2015 tax holiday becoming law.
“On a regular Saturday in all four stores, we’ll do somewhere in the vicinity of $60,000 for the day,” he said. “We did six times that last year during the Saturday of the sales tax holiday weekend.”
Steinberg said a lot of drivers come in to buy snow tires, then bring them back in November to have them installed for the winter.
He acknowledged that the holiday shifts some sales from other days, but overall, he said, there’s an increase in sales. “On balance, it’s definitely a positive thing.”
During a debate on the bill Wednesday night, several senators spoke against the measure.
“It has outlived its lifespan,” said Robert L. Hedlund, a Weymouth Republican. “It’s a gimmick whose time has passed.”
Other legislators expressed reservations about it but said they were still voting for the holiday, given that retailers and consumers are already expecting it.
The sales-tax holiday tradition started in Massachusetts in 2004. It has since happened every year except 2009, when the economy — like the state budget — was in bad shape.
But amid the excitement among retailers and support among elected officials, there were reminders of Massachusetts’ northern neighbor with a more expansive — and permanent — tax reprieve.
Tweeted New Hampshire resident Grant Bosse: “NH Sales Tax Holiday: Jan. 1-Dec. 31.”