Bay State Shoppers May Get Another Tax-Free Day
Proposal Unveiled To Waive 5% Sales Tax On Aug. 13 Purchases
POSTED: 2:05 pm EDT June 29,
2005
UPDATED: 3:36 pm EDT June 29,
2005
BOSTON -- It looks as if Massachusetts will give consumers another tax holiday this summer. A proposal to repeat last year's tax-free shopping day was released Tuesday."Last year's tax-free day was wildly successful and provided a boom to the local economy. It was like the Saturday before Christmas, but in August," said Bill Rennie, public affairs director for the Retailers Association of Massachusetts. "Our members reported an average 321 percent increase in sales from that same day of the previous year. Some even said it was the best sales day in the history of their store."If approved, this year's tax holiday will be held on Aug. 13 and tax-free status will apply to purchases up to $2,500 with some exclusions.Jewelry, electronics, furniture, and other high-ticket items were the big sellers last year, Rennie said. But just getting people into the store was great for business."Research shows us that one-third of purchases are impulse buys, so if the big ticket items bring people to the stores, they might pick up what they came for along with something else that catches their eye," Rennie said."The House and Senate still have to vote and the governor still has to approve this bill, but so far he has been a strong supporter of this kind of thing," said Tim Connolly, director of communications for the Massachusetts Department of Revenue. "Last year's tax-free day was seen as a huge success, even though the state lost $10 million in taxes."Last year was the first time the Bay State offered the tax break to shoppers, but 11 other states-- including New York --offer tax-free shopping periods regularly.Whether tax-free day will become an annual event is yet to be seen."There are a lot of proposals out there, but the legislation that advanced called for a one-time event. This is something we will keep fighting for," Rennie said."Consumers interested in (a tax-free shopping day) should let their representative or senator know," Rennie said.If the bill does pass, there are some specifics consumers should know before embarking on a tax-free shopping spree:Tax-free status does not apply to cars, trucks, motorcycles, or boats no matter what the price Tax will still apply to telecommunication services, utilities, meals and gas You cannot deduct sales tax from the first $2,500 of an item if the item price is more Tax-free status does not apply to rain checks You can deduct taxes from an item that you special order or plan to have delivered a different day as long as you pay for the item in full on Aug. 13 It will apply to catalogue and Internet sales, even if they are out of state, as long as you pay for the item in full on tax-free day
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