Tax Break Pitched as Lift for Consumers, Local Biz State Tax Revenues to Absorb Yet Another Dent
Article by: Matt Murphy
Article Source: State House News Service
AUG. 25, 2020…..Gov. Charlie Baker visited a bicycle shop in Belmont on Tuesday, admitting after a tour that he and his wife, Lauren, have “kicked the idea around for awhile” of buying themselves bikes.
Baker insisted, “No, I wasn’t shopping,” but suggested he might take his own advice this weekend and go out to get himself two new wheels during the the state’s annual sales tax holiday weekend.
“I think it would be great if everybody who’s looking to buy pretty much anything that they’ve been putting off or that they might do at some point down the road to find a way to go out and make that happen,” Baker said Tuesday, after touring the award-winning WheelWorks bike shop, co-owned by Clint Paige.
The official reason for Baker’s visit was to draw attention to the upcoming tax-free weekend and announce a $2 million ad campaign that will run through the end of the year, encouraging residents to shop, dine out and travel at local stores and destinations.
For the fourteenth time since 2004, the state will give shoppers buying from Massachusetts retailers this weekend a break from the state’s 6.25 percent sales tax on all purchases under $2,500.
Baker said the holiday weekend, which became a permanent fixture on the August calendar in 2018, is important every year, but especially this year as small businesses look to recover from the COVID-19 pandemic restrictions imposed throughout the spring and early summer.
“We would urge you all to get out and shop and shop safely,” Baker said.
Paige said he’s been lucky to have a product that people wanted to use during the pandemic, but he said other retailers and the food industry have not been as lucky.
“So do whatever you can, residents here in Massachusetts, to recognize the fact that there’s a lot of people out there that are still hurting. Do what you can to come up this weekend and come out over the next several months to support these businesses that are not doing quite as well,” Paige said.
Lt. Gov. Karyn Polito said the administration plans to use $500,000 from the budget of the Massachusetts Office of Travel and Tourism and $1.5 million from the federal coronavirus relief fund to run print, television, radio and online ads through the end of the year. The campaign begins Friday.
The state will also utilize billboards and social media to spread the message, and plans to consult with regional tourism councils on marketing strategies. MOTT is run by Executive Director Keiko Orrall, a former state legislator from Lakeville and Republican National committeewoman who is in Charlotte this week for the Republican National Convention.
The “My Local MA” campaign can also be accessed online at www.findmylocalma.com, with links to local resources and chambers of commerce to find out where to shop and stay locally.
“The goal of this campaign is to continually remind people that where you shop, dine and travel matters,” Polito said.
Massachusetts Retailers Association President Jon Hurst visited WheelWorks with Baker, and said that while 100 percent of RAM’s members are now open, 50 percent are operating at reduced capacity. He said that could mean businesses doing only curbside or delivery business, or limiting the number of people in their stores at any given time.
“We need to remind people that they need to shop like jobs depend on it, because, frankly, they do,” Hurst said.
Massachusetts is one of 16 states that plan to hold a sales tax holiday this year, according to Hurst. The Legislature previously voted every year whether to authorize the August sales tax holiday, but in 2018 Baker signed a law making it permanent.
Baker said that the tax-free shopping weekend, which is typically pegged to the return to school, costs the state between $20 million and $25 million in forgone tax revenue. In a year when the state still doesn’t have an annual budget in place and is worried about a big mismatch between spending and revenues, and with school beginning remotely for many students, Baker did not offer an estimate for how much this year’s holiday could cost.
Hurst said that 20 percent of his member businesses have reported doing better than last year, while 80 percent have seen a downturn in business in 2020.
Baker said that while businesses like WheelWorks have benefited from people wanting to get outside and be active during the pandemic, other sectors of the economy, including the tourism and entertainment industries, are paying “an incredibly painful steep price for COVID and for a lot of the restrictions and the rules and the guidelines that we put in place.”
“A tax break is always good for the taxpayer, obviously, but this year in particular we really want everybody to think about taking advantage of the chance that this provides for you to go shop in locally-owned, locally-operated business in your community,” Baker said.