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Massachusetts Sales Tax Holiday: Helpful or Harmful?


 A time without sales tax.

Does a sales tax holiday make sense for Massachusetts in 2015? According to a report created by the Beacon Hill Institute for the Retailers Association of Massachusetts, it does.

Fiscal impact

A 2015 sales tax holiday would mean the following, according to the study:

  • A mean retail sales increases of $168 million for Massachusetts’ retailers.
  • A mean increase in Massachusetts’ employment of 627 jobs.
  • A mean increase in new investment of $50 million.
  • A mean increase in real disposable income of $37 million.

For

The study reveals a significant amount of support for a 2015 tax-free period. 72% of Massachusetts consumers polled would be “very likely” or “somewhat likely” to shop locally during a sales tax rather than head to tax-free New Hampshire or seek tax-free deals on the Internet. According to Jon Hurst of the Retailers Association of Massachusetts, “More and more, it’s about bringing back from the Internet and your smart phone tax-free, very convenient sales from any number of countless, tax-free Internet sites” (MassLive.com).

Many retailers are quoted in the study speaking in support of a tax-free period, which the state has held for 10 out of the last 11 years. It was called “critical to our summer business” and "a very important event according to our customers.” One retailer said it caused “a huge infusion of revenue for us each year.”

Against

Yet not all retailers support the idea. Negative comments quoted in the study include the following:

  • “The sales tax holiday has created more problems than benefits for us.”
  • “I think the sales tax weekend just shifts sales…”
  • “Smaller retailers do not benefit from this holiday…”

State lawmakers will undoubtedly consider this report during their hearing to discuss the matter (House Bill 2551) on July 21.

For or against them, you can’t ignore them. 18 states are offering more than 25 sales tax holidays in 2015, and others have been proposed.

Simplify sales tax management during tax-free periods and year-round. Learn more.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.