IN the last half-decade, a sales-tax-free summer weekend has become a Massachusetts mainstay. For store owners, it’s a taste of Christmas during the dog days of summer, prompting consumers to flock to the stores rather than the beach.
The Retailers Association of Massachusetts thinks those sales-tax holidays have sparked as much as a half a billion in extra retail business each year. Indeed, they’ve been such a bottom line bonanza that when state leaders decided against a tax holiday this year because of the revenue shortfall, some retailers offered to pay their customers’ sales tax themselves. That wouldn’t deprive the state of any revenue, but would simply mean that buyers would get a 6.25 percent discount thanks to the retail sellers rather than the state.
Problem: A murky state statute prevents store owners from advertising that they will pick up the sales tax for their patrons.
But that should be simple enough to rectify, right? After all, we in Massachusetts are, um, blessed with a full-time Legislature, one that should be forever at the ready when public-policy problems loom.
Yet despite a push by assistant minority leader Bruce Tarr, the Senate recessed for August without taking action. Meanwhile, the best efforts of Representative John Quinn, Democrat of Dartmouth, got hung up in the House over worries that a business-financed rebate would benefit deep-pocketed retailers over smaller stores.
That’s a strange concern, notes Jon Hurst, president of the retailers association, since it was mostly small stores that were advertising they would pay customers’ sales tax in the first place.
So retailers have found themselves frustrated, ready to give potential customers a sales tax break but unable to advertise their willingness to do so. That should frustrate everyday citizens as well. After all, the state doesn’t have a compelling interest in who pays the sales tax, but just that it gets paid.
But here’s what retailers can do: Advertise that they’re having a 6.25 percent off sale. Just don’t mention the sales tax.
Meanwhile, the laggardly Legislature should change this law so that if the economy hasn’t improved enough for a genuine sales tax holiday next summer, merchants can at least take matters into their own hands.
