Fri, August 07, 2009
Massachusetts Smothers Its Tax Holiday
For several years Massachusetts, like many states, has had a summer tax holiday weekend – sort of like Christmas in August. This year, the Grinch has come to the Bay State.
Instead of a sales-tax holiday, as the state has had for five years in a row, the legislature enacted a 25% sales tax hike that took effect on the first of this month. The tax increase is an attempt to help the state make up a shortfall in its revenues. Possibly the thinking was to provide shopping incentive using a stick rather than a carrot: instead of rushing to make purchases on a tax holiday, consumers might pile into stores in July to avoid the looming increase.
Whatever the thinking was, consumers in a couple dozen other states still have the benefit of sales tax holidays. For example, our neighbors in Vermont will get a tax holiday for the first time on purchases of less than $2,000. The Federation of Tax Administrators web site has a table showing state sales tax holidays for the states that have sales tax holidays this year. Massachusetts residents will just have to make the drive up to New Hampshire, cheered by the knowledge that they’ll save even more in sales tax.