BOSTON (CBS) – Massachusetts Gov. Charlie Baker on Wednesday announced a proposal that would waive the state’s sales tax for the months of August and September.
Baker said thanks to budget management and an infusion of federal relief, the state expects to have a significant surplus when the fiscal year ends on June 30. State tax revenues for Fiscal Year 2021 are 14.9% above what was projected.READ MORE: "Time for the village to step up": Volunteers help ease nationwide baby formula shortage
The governor said waiving the sales tax for two months would be a way to say thank you to taxpayers after a difficult year.
“People are returning to work. They’re heading out to shop and dine in our communities. And that means businesses and residents are creating more economic activity, and therefore more tax revenue along with it,” Baker said. “After this very tough year, our taxpayers and small businesses all deserve a break.”
Baker’s proposal would need approval from the Massachusetts House and Senate. He said the bill is being filed in time for legislators to take action before August.
“It’s fantastic,” said Steve Leed of Royal Jewelers in Andover. “When you think about how all of us in retail, and restaurants as well, suffered during COVID, this is a wonderful time to make up some of that business.”
Leed says giving his customers what amounts to a 6% discount for two months will give business a sparkling chance.
“I think it will also put people in the mindset of purchasing and buying again,” Leed said. “I think it’s a great feeling and I think people will enjoy it and I think it needs to be done.”READ MORE: Video: Likely tornado spotted in Charlestown, New Hampshire
He does have one ask – that the governor extend the $2500 limit for big ticket items like expensive jewelry.
“The $2500 ceiling in today’s marketplace with the price of what items can be and are today, I think that’s a little bit on the low side and I would like to see that increased,” Leed said.
The proposal would return about $900 million to taxpayers.
“I was very surprised. It’s a very bold initiative,” said State Sen. Barry Finegold.
Finegold says he’ll give the idea consideration but wonders how much it can really help business.
“You know right now we have a supply problem where there is so much demand out there for goods. You can’t get appliances for six months,” Finegold said. “And what this is going to do is just cause people to buy even more stuff out there. So the question is why are we really doing this and what is it going to do?”MORE NEWS: Bail hearing postponed for Nathan Carman, charged in mom's death at sea
As of now, tax free weekend in Massachusetts is scheduled for August 14-15.