Sales Tax Holiday Likely In August
BOSTON (CBS) - There are lots of pretty things you'd like to buy for yourself, but the time never seems right to splurge -- except, of course, when the state lets you skip the sales tax.
It's looking more and more likely that a sales tax holiday is in store for Bay State shoppers this August.
That's welcome news to retailers like Joseph Gann Jewelers in Downtown Crossing. The family-owned business says state sales tax holidays can get busier than the Christmas shopping season, with impulse buys spurring sales.
WBZ-TV's Jim Armstrong reports
"It's pretty significant," said Gann's owner Joshua Gann.
Customers, he says, will "browse around, see something else they wouldn't necessarily have bought - and they might not have bought it that day anyway - but because it's tax-free they'll say, 'Oh, I have to buy it right now.'"
Massachusetts has offered a tax-free weekend every year for past eight years, with the exception of 2009 when lawmakers also raised the state income tax from 5% to 6.25%. Gann says business suffered that year, both because of the sales tax hike and the lack of a sales tax-free weekend.
They haven't picked an exact date yet, but Beacon Hill lawmakers are confident the sales tax holiday will happen again this year, in part because, the state's finances are in good shape. An official date for this year's tax-free weekend is expected by late next week; the holiday is typically around mid-August.
For the fiscal year that ended on June 30th, tax revenues are up by close to $2 billion, ahead of the state's most robust predictions.
But Paul Bachman, Director of Research at Suffolk University's Beacon Hill Institute, says his team actually anticipated the tax windfall, and was not surprised to see receipts so high. And he is encouraged to hear a lot of talk about the new found cash triggering a possible drop in the state's income tax rate. As of January 1, 2012, the state's income tax rate is expected to fall from 5.3% to 5.25%. That's not a huge benefit to the average taxpayer's bottom line, but overall, Bachman says it will keep more than $100,000,000 in taxpayers' wallets.
Even better, the lower rate will spur business growth. Bachman estimates the income tax drop will, "provide a boost of a little over one thousand private sector jobs, which certainly the state could use."
