BOSTON — A weekend sales tax holiday in Massachusetts next month has regained favor in the Legislature.
Lawmakers this week will take up suspending the 5 percent sales tax on Aug. 16 and 17. The holiday is back on the agenda now that House Speaker Salvatore DiMasi, who was against it, is behind it.
It also has the support of Gov. Deval Patrick and Senate President Therese Murray, increasing the likelihood it will pass.
"If it comes to me, I will sign it," Patrick told reporters yesterday.
Under the plan, for those two days the state will not collect the sales tax on most items $2,500 or less. It covers personal, not business, purchases. It does not include meals, gas or utilities, car or boat purchases or telecom services. A DiMasi spokesman said the bill could come up tomorrow.
Rep. Bradley Jones Jr., R-North Reading, filed the bill the Legislature will consider. With lawmakers raising cigarette and corporate taxes, Jones said the holiday gives consumers a badly needed break.
"It's an important thing to do to reach out to people who are having a tough time making ends meet," Jones said.
Business groups along the border with New Hampshire, where there is no sales tax, applauded the move.
"If ever there was a time when it was good to provide some relief, this is the year," said James Jajuga, president and CEO of the Greater Haverhill Chamber of Commerce.
Jajuga said the holiday would get people shopping at BJ's Wholesale Club, Lowe's and Target, and other stores in the region, and then coming back for more.
"What I hope happens," Jajuga said, "is when they see how nice the stores are, the merchandise is, they'll come back and frequent the store again when the tax holiday ends."
This would be the fifth consecutive year Massachusetts has had a sales tax holiday in August. Consumers saved $16 million last year, and $58.3 million since the first holiday in 2004. The state Department of Revenue estimates consumers will save another $16 million this year.
Money saved by consumers is revenue lost by the state, and that has some people worried.
When Republicans put a sales tax holiday for a vote in April, Rep. Linda Dean Campbell, D-Methuen, was the only Democrat to vote for it. Rep. Brian Dempsey, D-Haverhill, now said he's leaning toward it but is concerned about losing revenue at a time when every penny counts.
"There's a lot of appeal to it," Dempsey said. "But I want to be reassured we'll have the same success in the past."
The success is questionable, said Noah Berger, executive director of the Massachusetts Budget and Policy Center. Studies show people put off purchases for that weekend, and retailers hold back discounts.
Moreover, while $16 million doesn't sound like a lot out of a $28 billion budget, Berger said it could be used to double what the state spends on worker training.
"I don't think this is a good idea, generally," Berger said.
DiMasi was skeptical of the virtue of another tax holiday earlier this year as troubling economic news bubbled up. But that was before June revenue figures showed collections ahead of expectations for the year. His spokesman, David Guarino, said that and consultations with other representatives and business leaders convinced him to take up the measure.
"He was concerned in the past, obviously, but he knows this will help retailers and consumers at a time when both are hurting and could use a shot in the arm," Guarino said. "He feels that the state can afford to help consumers and retailers this year."
Jones said having DiMasi on board is critical.
"The fact that the speaker is behind it means it has a very good chance of getting through," Jones said. "It's the difference between happening and not happening."
