By Colin A. Young
STATE HOUSE NEWS SERVICE
BOSTON — Deciding whether to hold a sales tax holiday weekend in August could be among the first orders of business when the Senate begins debate on a $601 million economic development bill Wednesday.
The first of 321 amendments filed to the bill, proposed by Senate Minority Leader Bruce Tarr, calls for the 6.25 percent state sales tax to be frozen Aug. 11 and Aug. 12 on most items that cost less than $2,500, mirroring a provision added to the bill before the House passed it.
Tarr’s amendment refers to the tax-free weekend as a "brief reprieve from the sales tax burden on the citizens of the commonwealth."
The Senate Ways and Means Committee redraft (S 2625) of the jobs bill passed by the House earlier this month does not call for a sales tax holiday weekend this summer. The House set the sales tax holiday for the weekend of Aug. 11 and 12. The Senate Committee on Bonding, Capital Expenditures and State Assets, in its redraft (S 2622) of the bill, called for a sales tax holiday that same weekend, but the Ways and Means Committee left the provision out of its bill.
Including the popular sales tax holiday via an amendment would give senators a chance to go on record supporting the tax-free weekend ahead of election season, but some senators in recent years have objected to the idea as a gimmick.
The Senate has already rejected the idea of a sales tax holiday this year. When senators debated their budget in May, they voted to defeat an amendment that would have established a sales tax holiday this August. Seven Democrats joined the seven-member Republican caucus in support of the tax holiday amendment, which failed 14-24. More recently, the Senate signed off on tax holiday weekends every year, except this one, as part of the so-called grand bargain bill.
If lawmakers approve a tax holiday this year, 2018 will be the 12th year out of the last 15 in which Massachusetts has waived its sales tax for shoppers.
The first was a single-day holiday, held Saturday, August 14, 2004 and authorized by an economic stimulus package signed into law the previous November by Gov. Mitt Romney. Massachusetts joined Iowa, Georgia, Florida, Missouri, South Carolina, North Carolina, New York, West Virginia and Connecticut as states that held tax-free days or weekends in August.
The first sales tax holiday was estimated to have saved consumers about $10.1 million, the News Service reported, and the House chairman of the Revenue Committee, Rep. John Binienda, said retailers that day "did Christmas Eve numbers in August."
Disagreements between the House and Senate have been part of the discussion of sales tax holidays for about as long as there have been sales tax holidays. The Senate initially proposed holding the tax-free period in December, when people shop for gifts, leading to complaints from the House.
In 2005, the House OK’ed a second single-day tax-free holiday and the Senate responded by approving a two-day holiday. In 2008, as interest in a fifth consecutive sales tax holiday grew, then-House Speaker Sal DiMasi said it would be "very, very unlikely" the state would freeze the sales tax as tax revenues began to falter. DiMasi eventually changed course and Gov. Deval Patrick signed a 2008 sales tax holiday weekend into law.
Amid the financial crisis in 2009, the state opted against a sales tax holiday for the first time since instituting the first five years earlier and Retailers Association of Massachusetts reported its members saw an average over-the-year drop in total sales of 20 percent that August.
An August sales tax holiday weekend was established each year from 2010 through 2015, the last year in which Massachusetts has waived the sales tax.
Among the other amendments senators have proposed to the economic development bill is a Sen. Jamie Eldridge proposal (#2) to undo part of the so-called grand bargain and restore the time-and-a-half pay requirement on Sundays and holidays.
That requirement will be phased out over five years as part of the brokered deal that kept a slew of policy questions from going to voters on the November ballot. When the Senate voted on the grand bargain bill, a parade of senators lamented the elimination of time-and-a-half pay on Sundays and the effects that could have on working-class families.
Sen. Cynthia Friedman proposes that grants from the Workforce Competitiveness Trust Fund be named the "Senator Kenneth J. Donnelly Workforce Success grants" in memory of her predecessor and former boss, the late Sen. Kenneth Donnelly.
Most of the 321 amendments are earmarks for funding for local projects, including $150,000 for welcome signs in Peabody, $1.05 million for improvements to Main Street in Shrewsbury, $2 million for Adams to build the Greylock Glen Outdoor Center, $1 million for bridge improvements in Monson, $1.5 million for the restoration and rehabilitation of the Everett Square Theatre in Hyde Park and $4 million for the development of the Draper Mill Complex in Hopedale.