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Curious About Revenue From Sales Tax, Alcohol Tax

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Curious About Revenue From Sales Tax, Alcohol TaxWBZ

It has been nearly eight months since the state made a move to bring in more money by raising the sales tax from 5 percent to 6.25 percent and charging a tax on alcohol.

Philip from Sudbury Declared his Curiosity:

“How do the sales tax revenues compare to a year ago?”

David Wade takes a look at the numbers.

For 65 years, John Harrington’s family has owned a liquor store in Chelmsford. He had seen it all, until last August when for the very first time, he saw a sales tax on alcohol.

“Our numbers are down, our customers are down and our percentages are down,” he said.

For liquor stores, the jump to 6.25 percent was like going from zero to 60, and Harrington says people started speeding to tax free New Hampshire. “The sales tax has a major impact on people.”

But what kind of effect is it having on our cash-strapped state? “The amount we’ve been getting in exceeds what we expected to be getting in.”

Navjeet Ball is the head of the Department of Revenue. She says in a perfect world, a 25 percent sales tax increase would bring in at least 25 percent more revenue, but revenue is up 14 percent because people are buying less.

“I think the larger issue is the economy quite frankly more than the sales tax rate,” said Ball.

Jon Hurst from the Mass. Retailers Association says his clients are telling him they’re losing people. “We’re still lagging. Part of that is the sales tax. We are also very tech savvy in Massachusetts and are more likely to go online. It’s been a struggle.”

The state does not keep track of revenue by location, but they think less people have headed north and to the Internet than they expected, though some shoppers told WBZ they’ve don’t it. “More and more taxes are being taken out every week, every month and sometimes you have to look our for number 1,” said one person who admitted to traveling to New Hampshire for alcohol.

And for Harrington, if people continue to go north, his numbers will go south. D”oes it feel like it’s getting a little harder to do business every year?” David Wade asked.

“In this state, absolutely it is,” Harrington said.

The Department of Revenue also tells WBZ that month-by-month, the numbers have been getting much stronger, showing signs that Massachusetts shoppers are starting to return to stores.

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