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Massachusetts shoppers want to broaden sales tax, lower rate

  • Mar 30, 2017 | Gail Cole

 There's a movement in Massachusetts to put a sales tax rate reduction up for a vote in 2018.

A majority of Massachusetts shoppers recently polled by the Princeton Research Association (PRA) are in favor of reducing the state sales tax rate and broadening sales tax to some goods and services that are currently exempt, such as soda and nonprofits. Some voters would also like to see a tax on internet sales.

The poll was conducted at the request of the Retail Association of Massachusetts (RAM), which deems the results “interesting.” For example, 79 percent of respondents want the state to authorize a sales tax holiday; it has done so in the past but decided not to in 2016. In addition, while 52 percent of respondents oppose taxing internet sales, 61 percent would support an online sales tax if the sales tax rate were reduced to 5 percent or lower. Other highlights include the following:

Reduce sales tax rate

  • 66% say the proper sales tax range for Massachusetts is 4 to 4.5%
  • 78% say some type of sales tax relief is needed
  • 79% support reducing sales tax to 4 to 4.5% because of the proposed Millionaires Tax
  • 83% support lowering the sales tax rate to “help local retail shops,” especially since many online sellers don’t collect tax

In 2010, Massachusetts voters rejected a sales tax rate decrease. The ballot question sought to drop the rate to 3 percent, which Gov. Charlie Baker (then a gubernatorial candidate) said went “too far.”

Broaden sales tax

Poll respondents favor a broader sales tax, but only if the rate were reduced: 56 percent support taxing nonprofits (e.g., universities, foundations), and 60 percent support taxing “items like soda.” Sales of soda and candy are exempt in Massachusetts.

A PRA poll from 2011 found 49 percent of people polled to be in favor of charging sales tax for soda and candy, and 49 percent opposed. Approval rates rose to 56 percent if funds would be set aside to fight childhood obesity, and they rose even further if funds would be used for schools or for both schools and fighting childhood obesity.

“Food for thought”

RAM isn’t saying it will necessarily act on this information, but it did call it “food for thought for our industry, our voters, consumers, and for Beacon Hill.” It is looking at putting a sales tax cut on the 2018 ballot. To do so, it must submit a formal petition to the attorney general by August 2. Ten voters must sign initiative petitions for them to make the ballot.

Meanwhile, some state legislators want to create a 4 percent surtax on household income north of $1 million. This constitutional amendment would require approval by a vote of the people, and it’s under consideration for 2018. If ultimately approved, it could generate up to $2 billion of additional revenue for the state annually.

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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.