Sales Tax Holiday to be Observed This Weekend- Meals and Drinks Excluded

This weekend will mark the inauguration of what is now a legislatively mandated annual tradition- the Sales Tax Holiday. Unsurprisingly however, the rollout of this law has not been without issue. The State House caused confusion when it initially included restaurant meals in the upcoming tax holiday. After learning of concerns from restaurant owners themselves however, the Governor has amended the statute to exclude that industry.

Though held in the past, the state’s Governor was never required to designate a tax holiday weekend until passage of the Grand Bargain last year. In an expansive compromise with labor groups, that legislation mandated that an August weekend would be selected to serve that purpose annually. As reported by State House News Service, the Grand Bargain’s language made no distinction between retailers and restauranteurs, leading legislators to interpret it as applying to both. Restaurant owners objected however, explaining their point of sale systems did not enable them to separate taxes for alcohol- which was never included in the tax holiday- from meals. For that reason, Baker filed legislative amendments excluding meals from the Holiday, which the House and Senate immediately approved.

To ensure these revisions are understood and acted upon by business owners, the Commonwealth’s Department of Revenue has issued an updated Technical Information Release (TIR 19-10: Sales of Meals Excluded from the Annual Sales Tax Holiday Weekend) and a new list of Frequently Asked Questions (FAQs). This year, the weekend will run from Saturday, August 17th, through Sunday, August 18th. During that time, no sales tax should be applied to purchases that are for personal, non-business, use and do not include individual items priced above $2,500.

It should be noted that, beyond meals, drinks, and individual items priced over $2,500; there are some ineligible acquisitions, for which sales tax must still be applied. These include the purchase of:

  • items on layaway
  • telecommunications services
  • tobacco products
  • marijuana and marijuana products
  • gas
  • steam
  • electricity
  • motor vehicles- including motorboats

If you have any questions or concerns, please feel free to contact Christopher McDermott, the Chamber’s public affairs manager, at (978) 353-7600, ext. 224; or via email at cmcdermott@northcentralmass.com.

Chamber Selected for National Education & Workforce Program

The Chamber is one of 35 state and local chambers chosen to take part in a prestigious national program aimed at addressing critical education and workforce issues. Sponsored by the U.S. Chamber Foundation, the Business Leads Fellowship Program trains and equips participants with resources, national expertise and a network of peers to build their capacity to address the most pressing education and workforce challenges.

“Businesses in North Central Massachusetts are struggling with the same challenges their peers are throughout the country.” says Christopher McDermott, Public Affairs Manager of the Chamber, who is participating in the third cohort of the program on behalf of North Central Massachusetts. “This is a great opportunity for the Chamber to actively contribute to the national conversation while learning best practices from our counterparts in other states that can help us make an impact locally.”

The Chamber was chosen through a competitive selection process. The four-month fellowship will cover the entire talent pipeline, including early childhood education, K-12, higher education and workforce development.

The objectives of this program align with the Chamber’s efforts around improving the workforce, which are most recently exemplified by the publication of our recent report Build North Central: Improving the Industrial Heart of Massachusetts. ◊

This story is from the latest Chamber Report

Chamber Regional Economic Study

The Chamber and its economic development arm, the North Central Massachusetts Development Corporation, have commissioned the UMass Donahue Institute to develop a robust data driven economic profile of the region. This economic profile is intended to provide focused data and research for North Central Massachusetts that will be used to support our economic development goals. We anticipate that the data will be used to showcase the region, answer queries about the region, support ongoing projects and help make evidence based decisions.

The customized profile is expected to combine detailed economic, labor market and socioeconomic data, as well as provide analysis on the economic conditions within the region. The project is expected to be completed by October, 2019. ◊

This update is from the latest Chamber Report

Update on Recent Legislation Expanding Room Occupancy Excise

CHANGES TO ROOM OCCUPANCY EXCISE 
The new law expands the room occupancy excise to include short-term rentals. Aside from taxing short-term rentals, there are some aspects of the law that impact traditional lodging establishments already charging room occupancy excise, like bed and breakfast establishments, hotels, lodging houses and motels.

The following lists are meant only to highlight a few of the changes for short-term rentals and traditional lodging accommodations. We recommend reviewing the frequently asked questions and the technical information release (TIR), on the Department of Revenue website, for detailed information on the new law.

Impact on short-term rentals

  • Rent from short-term rentals will now be subject to room occupancy excise for any agreements made on January 1, 2019 or after for occupancies beginning July 1, 2019 or after.
  • “Rent” includes, insurance, linen fees, cleaning fees and booking fees.
  • A short-term rental is an occupied property where at least one room or unit is rented using advance reservations – this might include an apartment, house, cottage or condominium.
  • Operators of short-term rentals must register with MassTaxConnect on or after July 1, 2019 when registration will be available.
  • Operators who rent more than 14 days in a year must collect the excise.
  • An exemption is made for single occupancies of more than 31 consecutive days.
  • Intermediaries who collect rent on behalf of short-term rental operators are required to collect all excises and fees and remit to the Department of Revenue.

There are other important aspects of the room occupancy excise worth noting as described in the frequently asked questions and TIR.

Impact on traditional lodging accommodations

  • There is an expansion of “occupancy” to include any and all furnishings, services, accommodations, like breakfast at a B&B, whether the occupant chooses to avail themselves of the services or not.
  • There is an expansion of “rent” to include insurance, linen fees, cleaning fees and booking fees.
  • Intermediaries who collect rent on behalf of the operator of the lodging establishment will be required to collect and remit tax to the Department of Revenue.

The effective date for those currently collecting room occupancy excises (and new establishments) to begin collecting the room occupancy excise, based on the new definitions of rent and occupancy, is July 1, 2019. This would include any applicable local excises. Any price quotes, or collection of rents for occupancies after July 1, 2019 should include the excise.

More Information
Stay tuned, whether you are in the short-term rental or traditional lodging accommodations industries, for more information about tax reporting under the new law. Registration for short-term rental operators or intermediaries will be available through MassTaxConnect as of July 1, 2019. We will also continue to update the guidance on our website with any changes that take place.

After reviewing the frequently asked questions and technical information release, please contact the Trustee Tax Contact Center at 617-887-6367 (choose #4 for both prompts) with any additional questions.

Paid Family & Medical Leave Act Updates

Here are updates to the Paid Family and Medical Leave Act:

 

Private Plan Exemption Process Now Available at: https://www.mass.gov/info-details/exemptions-from-paid-family-and-medical-leave-for-private-plans
The Department of Family and Medical Leave’s private plan exemption process is now available for businesses in the Commonwealth with Paid Family and Medical Leave (PFML) plans offering benefits that meet or exceed those provided by the Commonwealth’s PFML law.

The updated exemption web page includes:

 

  • Information on required documentation
  • Information on how to calculate the required surety bond
  • Links to details from the Massachusetts Department of Revenue on how to file for an exemption from making family or medical leave contributions to the Department of Family and Medical Leave with MassTaxConnect

Applications for exemptions for private plans must be submitted to the Massachusetts Department of Revenue’s web-based application MassTaxConnect by June 30, 2019. Contributions to the program for those not receiving an exemption will begin on July 1, 2019.

 

Workforce Notifications, all languages now posted at: https://www.mass.gov/info-details/informing-your-workforce-about-paid-family-and-medical-leave
The Department of Family and Medical Leave has posted an additional six language options to the notice required to be provided by employers and covered business entities to their current workforce of PFML benefits, contribution rates, and other provisions as outlined in M.G.L. c. 175M sec. 4 on or before May 31, 2019.

The notice, which may be provided electronically, must include the opportunity for an employee or self-employed individual to acknowledge receipt or decline to acknowledge receipt of the information.

 

Please note! Federal Employer Identification Number
The identification number assigned by the Department of Family and Medical Leave will be the employer’s Federal Employer Identification Number (“FEIN”). Please use your FEIN as your Employer ID Number on the “Employer Notice to Employee” and the “Employer Notice to Self-Employed Individual” Forms.

 

Government Affairs Update (Winter 2019)

January marked the beginning of a new two year legislative session at the State House.  Issues such as education reform, health care costs, sports betting, transportation, and climate change are expected to be the hot button issues that will be dealt with during this session.  As legislators took their seats, the Chamber worked to ensure the region’s priorities were recognized. Just a week after they had been sworn in, we held our annual legislative briefing with the North Central Massachusetts Delegation, highlighting our State House goals for 2019.  The topics discussed included economic development, regional planning, support for the tourism and manufacturing industries, and education reform.  Before the month was out, the Chamber rallied support behind three bills which address several of these issues.  These included legislation focused on industry certified credentialing in high schools and two bills which support the region’s growing visitor industry. 

In other news, the Chamber also recently testified at a public hearing on the proposed regulations associated with the new Paid Family and Medical Leave Law.  Once codified, these regulations will guide how the recently established Department of Family and Medical Leave enforces this law.  Having reviewed the current draft, we attended a public listening session in Worcester and voiced concerns over the administrative burdens for small businesses and a lack of clarity regarding approval of private, alternative plans.  The Chamber will also host a public session with the Executive Office of Labor and Workforce Development on March 8, providing local businesses an opportunity to testify or ask questions about the regulations. 

To raise awareness of the recommendations from our recent report Build North Central Massachusetts: Promoting the Industrial Heart of Massachusetts, we also organized editorial meetings with regional press outlets and conducted outreach to legislative leaders.  The Chamber hopes that the report will help inform and motivate public policy leaders as they begin the dialogue around education reform. 

The Chamber will continue to monitor these vital issues and ensure that the needs of the North Central Massachusetts Business Community are not ignored by Beacon Hill. If you run a business in the region and want to make your voice heard on these or any other issues, please contact the Chamber’s public affairs manager, Christopher McDermott, at (978) 353-7600 ext. 224 or cmcdermott@northcentralmass.com.

Grand Bargain Timeline

Six months ago, the State House passed a raft of legislation that had been negotiated between business advocates and labor groups. The compromise eliminated numerous ballot questions in return for concessions on the minimum wage, paid leave, and mandatory premium pay on Sundays. On the 1st of this year, the initial phase of the Grand Bargain’s implementation took effect. As employers, you have a right and a need to know how these changes impact your business. see chart for a brief overview of the rules which just took effect.

*Due to an error in the Grand Bargain Legislation’s language, mandatory premium pay of time and a half (1.5 multiplier) will remain in effect for New Year’s Day, Columbus Day, and Veterans’ Day until further notice. 

As was alluded to above, this is only the first phase of the Grand Bargain’s multi-year rollout. Further changes are approaching, and we encourage you to speak with your payroll company or human resource department about how these and future adjustments will impact you. If you would like to learn more about the Grand Bargain and its schedule of implementation, you can do so here. 

If you have any questions or concerns about the Grand Bargain, the Chamber’s policy on it, or our stance on other matters before the State House, please contact Christopher McDermott at (978) 353-7600 ext. 224, or email him at cmcdermott@northcentralmass.com. 

 

 

Small Business Energy Exemption Certificate

The Massachusetts Department of Revenue will now oversee the process for claiming a certificate.  As of January 1, 2019, the process will be completed online through the Department’s MassTaxConnect.  Here are some of the highlights that will be important to qualifying small businesses:

  • As of January 1, 2019, small businesses will apply online for an exemption certificate through the MassTaxConnect application rather than submitting a paper Form ST-13 to their energy provider
  • Current (2018) exemptions were automatically extended for small businesses through March 31, 2019
  • Small businesses must apply for a 2019/2020 exemption certificate by March 31, 2019
  • Exemptions granted in 2019, and after, will be effective for up to two calendar years
  • DOR will send renewal reminders prior to the exemption certificate’s expiration date in 2020

For additional information, including a link to the draft regulation, businesses may refer to the Department’s small business energy exemption page which we will continue to update as information is available.