For one weekend this summer, Massachusetts will suspend its collection of the 6.25% sales tax on most items that retail for less than $2,500
The Massachusetts House and Senate on Thursday adopted a resolution setting the weekend of Aug. 10-11 as this year's sales tax holiday.
The annual tax holiday enables shoppers to avoid the sales tax on many purchases, although critics say it doesn't generate much new economic activity and merely shifts consumer buying patterns. Over the years, public officials have settled on holding the holiday in August in a bid to ramp up shopping during a lighter period for some retailers and to give families savings on back-to-school expenses.
During the annual tax holiday weekend, the state will suspend collection of the 6.25% sales tax on most items that retail for less than $2,500. The holiday does not apply to purchases of motor vehicles, motorboats, meals, alcoholic beverages, tobacco products, marijuana products, telecommunications services like prepaid calls, natural gas, steam or electricity.
The Massachusetts Department of Revenue estimated that indirect tax revenues generated due to increased economic activity during the sales tax holiday weekend last year totaled approximately $3.54 million. The agency said the holiday resulted in about $36.94 million in forgone sales tax revenue for the state -- $24.23 million of which would have gone into the General Fund, $6.75 million into the MBTA State and Local Contribution Fund, and $5.
Late Thursday, after the measure had cleared both branches, Senate President Karen Spilka released a statement calling the tax holiday"a great opportunity for residents to get out and support the local businesses in their community" and House Speaker Ron Mariano observed that the plan"aims to boost revenue for small businesses and enhance affordability for consumers."
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