Spilka declares plans for Aug. 12-13 Massachusetts sales tax holiday

By Chris Lisinski

STATE HOUSE, BOSTON, JUNE 12, 2023…..Lawmakers intend to schedule this year’s mandatory sales tax holiday for the weekend of Aug. 12-13, Senate President Karen Spilka said Monday.

With a Thursday deadline to set the dates approaching, Spilka told reporters the Legislature intends to select the second weekend in August to suspend the state’s 6.25 percent sales tax on most retail sales of less than $2,500.

“We will be doing a sales tax holiday August 12th, 13th, that weekend,” the Ashland Democrat said.

Setting the date requires the adoption of a resolution in both branches. House Speaker Ron Mariano, who was with Spilka as she made her declaration, did not take issue publicly with the dates declared by the Senate leader.

And while Spilka said she “know[s] people look forward to the weekend” that business leaders view as a major boon, there appears to be little interest among Beacon Hill Democrats in expanding the annual sales tax holiday beyond one weekend in August, the requirement under a 2018 law.

“No, we’re not there yet,” Spilka replied Monday when asked about offering a longer break from the levy. “But we will be doing the weekend.”

Gov. Maura Healey, who has pitched permanent tax relief measures as a necessary step to reduce the cost of living in Massachusetts and make the Bay State more competitive among its peers, was noncommittal about whether she would put her political muscle behind a sales tax holiday expansion. Some Republicans, including her predecessor, unsuccessfully pursued that idea.

Asked whether she viewed a lengthier suspension of the 6.25 percent sales tax as a way to boost competitiveness, Healey instead pivoted to the pitch that she regularly uses to explain why she thinks people should stay in — or move to — Massachusetts.

“There’s a lot we need to do and continue to do to be competitive,” Healey said. “We talked about tax relief, we talked about housing and the importance of working to reduce housing costs, child care costs and the like. But there’s so many reasons why people should stay in Massachusetts, should come to Massachusetts. When we look at, you know, access to education, access to health care, access to reproductive health care, protection of civil rights, protection of voting rights, protection of LGBTQ rights — all of these things are really important to a lot of people, including a lot of employers.”

The 2018 “grand bargain” law that raised the minimum wage, outlined a state paid family and medical leave program, and phased out time-and-a-half pay on Sundays and holidays instructed Beacon Hill to temporarily lift the sales tax one weekend each August.

As part of that law, retailers backed away from their plans to put on the statewide ballot a proposal to roll the sales tax back to 5 percent, the rate it was at for years before the Legislature in 2009 raised it as part of a budget-balancing package.

Lawmakers have until June 15 to agree to a date, and if they fail to do so, the revenue commissioner has until July 1 to do so. Both branches gaveled out Monday without advancing any resolution scheduling the sales tax holiday, and they do not plan to return until Thursday, which is the deadline for action.

The dates Spilka announced Monday line up with the request from Retailers Association of Massachusetts President Jon Hurst, who said the second weekend in August strikes the right balance between the summertime slow period and the flurry of the back-to-school shopping season.

Hurst estimated that the annual sales tax holiday weekend generates roughly half a billion dollars in sales for Massachusetts businesses.

“We have some members that it’s their biggest weekend the entire year. Others say it’s comparable to either Black Friday weekend or a weekend in December. It literally brings people out to shop when they otherwise would not be spending dollars,” he said in an interview Monday.

The Senate on Thursday plans to take up a nearly $590 million tax relief bill that combines expanded breaks for renters, seniors, caregivers and low-income families with new credits aimed at incentivizing housing development and an increase to the estate tax threshold.

Unlike the tax relief proposal Healey filed in the spring and the bill the House approved in April, which would eventually rise to nearly $1 billion and $1.1 billion in annual impact, respectively, the measure Senate Democrats rolled out does not make any cuts to the state’s short-term capital gains tax rate.

Business leaders have sought to reduce that rate, arguing that Massachusetts is an outlier for taxing short- and long-term capital gains at different rates, while progressive activists have slammed it as an unnecessary giveaway to wealthy traders.

Healey on Monday declined to say if that specific policy would be a dealbreaker for her.

Asked if she would sign a tax relief bill that omits a short-term capital gains cut, Healey replied, “I’m heartened by both bills and we’ll just see what comes out of conference committee. But obviously, the team and I, the lieutenant governor and I, are here and ready to work and collaborate on this and other issues.”