Mass. Tax Holiday Planned for August
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Both chambers of the Legislature passed the measure overwhelmingly last week, although the Senate shot down an attempt to make it a permanent annual affair.
Gov. Deval Patrick signed the legislation on Wednesday granting a weekend of shopping exempt from the 5 percent sales tax for the fifth year in a row.
The two-day sale applies to most items costing $2,500 or less. It's expected to cost the state between $15 million and $16 million in revenue. That had a few lawmakers wondering if the money couldn't be better spent elsewhere; proponents, however, said the holiday would save consumers money and boost businesses.
"I am glad we can provide people with this small break in time for back-to-school purchases," Patrick said. "We hope it stimulates all sorts of sales activity during what is otherwise a slow time of year."
House Speaker Salvatore F. DiMasi, D-Boston, who reportedly had gone back and forth on the issue, said the law "is good news for buyers and sellers alike, giving a break to consumers when they really need it and a shot in the arm to retailers during the traditionally slow sales period."
As in previous years, sales of telecommunications services, tobacco products, gas, steam, electricity, motor vehicles, motorboats, meals and items priced over $2,500 are exempt from the holiday and remain subject to the sales tax.
"It's important to be consistent and preserve our trust with taxpayers by providing another sales tax holiday this year," Senate President Therese Murray, D-Plymouth, said.
Massachusetts joins more than a dozen states in granting a sales tax holiday this year, according to the Federation of Tax Administrators.
"The sales tax holiday weekend is a highly effective way to stimulate economic activity and couldn't come at a better time for the retailing community," said Jon Hurst, president of the Retailers Association of Massachusetts.
