An editorial in today’s Boston Herald makes a strong case for offering another sales tax holiday this year, the first since 2008.Introduced in 2004 as a one-day event, the sales tax holiday expanded to a full weekend in 2005 and has grown in popularity ever since. Between 2004 and 2008, the sales tax holiday was an annual summer event that gave tax-weary consumers a break while also helping businesses through what has traditionally been a slow sales period for retailers.
Last year, of course, the state offered no sales tax holiday. Instead, consumers were hit with a 25 percent increase in the sales tax, which jumped from 5 percent to 6.25 percent and put many local businesses at a competitive disadvantage compared to their out-of-state counterparts.
House Republicans have filed an amendment for a sales tax holiday that could come up for a vote as early as today. This is good news for taxpayers as well as merchants. As the Herald notes, the $14.9 million in sales tax revenues the state lost during the 2008 sales tax holiday is “essentially, a rounding error in the context of a $28 billion budget,” and it will help draw customers into stores and provide additional individual and corporate income tax revenues for the state.
The Senate Republican Caucus has tried to make the sales tax holiday permanent, but so far Beacon Hill has resisted this proposal, opting instead to decide if and when one will be offered on a year-to-year basis. A permanent tax holiday would take the politics out of the process, while helping employers and taxpayers.
The Herald is right: it’s time to give consumers – and businesses – a break!
