By Edward Mason
Staff writer
June 24, 2008 12:02 am BOSTON — After four years of giving shoppers a break and retailers a lift, Massachusetts lawmakers may give the annual sales tax holiday the summer off. House Speaker Salvatore DiMasi is leaning against supporting a sales tax holiday this year. "Given the state of the economy and the state of state revenues, he thinks it's unlikely," said David Guarino, a DiMasi spokesman. The tax holiday, lasting one weekend in August, allows businesses to waive the 5 percent sales tax on most goods $2,500 or less. Current circumstances justify weighing the holiday annually. "It's been successful in the past," Guarino said. "But it is something that we have to look at year-to-year and determine if it's feasible." Consumers saved $15.9 million last year, and $58.3 since the first one in 2004. As consumers are caught between high oil and rising food prices, House Republican Leader Bradley Jones Jr. of North Reading said this is the time to cut people a break. "The case can be made (that it's needed) now more than ever," Jones said. "People are struggling and having a tough time making ends meet. We've done this four years, and this is the year we're not going to do it?" Sen. Bruce Tarr, R-Gloucester, said the state, which recently approved $250 million in tax incentives for the life sciences industry, can afford this. "As we're thinking about the other corporate interests, we ought to think about the average person and average small business," Tarr said. In April, Republicans tried unsuccessfully to insert an August sales tax holiday in the state budget. Rep. Linda Dean Campbell, D-Methuen, was the only Democrat to vote for the plan. Rep. Barry Finegold, D-Andover, said he supports the tax holiday but isn't sure it should be implemented this year. He is concerned about the impact this year on the $28 billion budget the Legislature is crafting. Philip Moss, an economist at University of Massachusetts Lowell, agreed, saying the state loses badly needed revenue, while producing very little economic stimulus. "It sounds good but it has almost no effect other than cost the state revenue that could be better used," Moss said. "(The state) doesn't have a lot of money to burn." The one area where it might do good, Moss said, is in the Merrimack Valley, encouraging people there not to drive across the border to sales tax-free New Hampshire. The Retailers Association of Massachusetts, which supports the holiday, disagrees. It estimates the holiday generated $500 million for Bay State businesses last year, as shoppers drawn by bargains made impulse buys. Harold Goralnick, chief operating officer of Royal Jewelers in Andover, said the sales tax holiday gave him a boost during a month typically slower than the Christmas shopping season. "It's certainly a spike in our sales during August," said Goralnick. "Jewelry sales to some degree are seasonal." The tax holiday may not be dead. Senate President Therese Murray came out in favor of having the tax break this year in a speech to the Greater Boston Chamber of Commerce. The governor does not have a position on the sales tax holiday. Cyndi Roy, a spokeswoman, said the issue is "under review." The Legislature's formal session ends July 31. DiMasi spokesman Guarino said the speaker would take the governor's and Murray's thoughts into account when deciding the sales tax holiday's fate. "He's obviously going to work with the Senate president and the governor to get their thoughts before it's decided," Guarino said.
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