sales tax

He doesn't quit thinking about ways to grow "brick and morter" jobs according to this report in the Herald business section.  The Retailers are doing a good job branding this as Main St Fairness.

House Speaker Robert DeLeo was sympathetic to a room full of Bay State retailers yesterday, but the Winthrop Democrat stopped short of endorsing a proposal to tax their competition: online retailers.

“I want to let you folks know that I heard you loudly,” DeLeo told members of the Retailers Association of Massachusetts at a luncheon at Bentley University. “It’s something I’m going to analyze very carefully.”

The retail trade group supports legislation to require out-of-state online retailers such as Amazon to collect sales taxes on Bay State purchases. But DeLeo, who said he never buys online, isn’t so sure he’s ready to adopt the tax.

“I’m not a new tax guy,” DeLeo told the Herald. “But I’m hearing from lots of retailers who feel they’re at a disadvantage. I want to see local businesses thrive and not get eaten up by an unfair playing field. But right now I am in no way endorsing this measure.”

Jon Hurst, president of the Retailers Association of Massachusetts, said support for the so-called Main Street Fairness law is essential to level the playing field.

“We either have to apply the law for online sales or remove it from brick-and-mortar retailers,” Hurst said.

California recently passed a law that Massachusetts retailers want here ... to collect sales tax on Internet sales.  It wasn't popular with the Internet retailers, as you can imagine, and Amazon spent millions leading a ballot referendum effort to overturn the law.  So California made a one year deal with Amazon.  Now it's up to Congress.

If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon's deal with California... "If they can't get Congress to act by next July, then they will start to collect the tax in September 2012. If by chance they get Congress to act, then that would trump the state law."  [Full Article:  Los Angeles Times]

The Joint Committee on Revenue is taking the plunge and has reported out of committee the bill calling for the 6.25% sales tax to be collected by the state on phone, online and mail vendors.  Approval and implementation of this bill has the potential to bring in $335 million per year...revenue that could be used to restore cuts to desparately needed programs and to restore jobs.  Congressional enabling legislation is a necessary precursor, and MA would be added to 24 other states seeking the sales and use tax agreement with this new bill, when signed by MA legislators and the Governor.

Revenue Committee Co-chairman Rep. Jay Kaufman (D-Lexington) also said he hoped the debate over deficit reduction would spur federal lawmakers to empower states to collect taxes owed to them.  [Full Article: Wicked Local Wellesley]

More evidence from local store owners that  the sales tax holiday doesn't have a big impact in the sales they make annually:

Although sales spike considerably during the two days consumers receive a break from the state's 6.25 percent sales tax, business owners say the event has little impact on their bottom line... At Gariepy Furniture in Leominster, owner Steve Gariepy said customers have continued to shop since the sales-tax holiday was announced last week, but they're not buying. Before the sales-tax holiday was first implemented in 2004, Gariepy said September, October and November were his three best sales months. Now many of those customers are making all of their purchases in mid-August. [Full Article: Sentinel and Enterprise]

Although the Governor acknowledged that the two-day sales tax holiday is not a fiscally prudent policy for MA, he signed the bill because it is popular.  Wouldn't you think someone not running for re-election would be more concerned with the viability of healthy and secure communities than popularity?

Opponents said the holiday simply shifts purchases that would already be made to a single weekend in August, adding staffing and overtime costs on employers and jeopardizing revenue needed for other services important to communities.

Advocates said consumers will spend more throughout the economy that weekend, paying gas taxes and meals taxes while they are out shopping and creating momentum for the economy while recovering some sales that might have lost to the Internet or New Hampshire. [Full Article: Wicked Local Avon]

Our own Judy Meredith comments about the Sales Tax Holiday discussion today:

Sales tax holidays - political gimmicks that divert attention from the real revenue issues that need to be addressed - may be popular, but it takes courageous leadership to steer the economic and political conversations   back on track.

Sales tax holidays introduce unjustifi­able government distortions into the economy without providing any significant boost to the economy. They represent a real cost for busi­nesses without providing substantial benefits. They are also an inefficient means of helping low-income consumers and an ineffective means of providing savings to consumers.   [Summary Study: Tax Foundation]

With new, updated systems in place, there is the potential for additional revenues that could help cities and towns restore sorely needed services and programs.

The current boat tax system "penalizes the owner of a modest craft and gives a huge tax break to the owner of a yacht," boat owner and Concord Assessor R. Lane Partridge wrote in a June 15 letter to legislators..."It's horrendous," Marshfield Assessor Elizabeth Bates, an author of the proposed legislation, said of the current system. "Bigger boats are going to pay more and they should. It's a simple formula and it's fair and equitable."  [Full Article: The Lowell Sun]

The Massachusetts Senate has rejected proposals to cut both the state sales and income tax rates. The sales tax amendment would have cut the rate from 6.25 percent to 5 percent. A second amendment would have cut the income tax rate from 5.3 percent to 5 percent.  [Full Article: Boston Globe]