Massachusetts Sales Tax Holiday Coming August 15 and 16

Massachusetts State House via Mass. Office of Tourism.

Have a big purchase on the horizon but don’t want to drive to New Hampshire to save a few bucks on it? Well, you’re in luck.

The Massachusetts legislature just set this year’s sales tax holiday weekend for August 15-16. The sales tax holiday, seen by some as a gimmick and others as a boon for business, has been an annual occurrence for almost a decade with one exception during the economic downturn. The House and Senate approved the sales tax holiday on votes of 136-20 and 27-11, respectively, after a small but loud group of progressives in both chambers voiced their opposition.

“While the Massachusetts economy is continuing to improve, folks are still facing tough fiscal times. By passing the legislation, we reaffirmed our commitment to hardworking families, particularly as the school year begins,” said House Speaker Robert DeLeo.

The bill was enacted by both chambers on Thursday and is now waiting on Governor Charlie Baker’s desk for a signature.

Baker is expected to sign the bill.

Senate President Stanley Rosenberg approved of the legislation but gave voice to some of the opponents of the sales tax holiday in his prepared remarks on its passage. “I hope that we will soon review this policy to determine if, after more than a decade, the desired impact is being achieved,” said Rosenberg in a statement.

While the sales tax holiday is unpopular with some members for depriving the state of revenue for two days some see it as a huge relief for those on the lower end of the economic spectrum.

“The tax holiday is particularly valuable for lower-income earners who disproportionately pay more sales tax and could use a tax break now,” said Senator Eileen Donoghue, Senate Chair of the Joint Committee on Economic Development.

The sales tax holiday began in 2004 and has continued every year except for 2009 when the economy was falling apart. The sales tax holiday is expected to generate $168 million in sales for Massachusetts businesses. The state’s Retailers Association is a big backer of the sales tax holiday.

“Suspending the tax in August leads to an increase in sales at a time when retailers could use a boost and allows families to save on a variety of purchases, including back-to-school items.” said Rep. Joseph Wagner the House Chair of the Joint Committee on Economic Development.

Massachusetts increased its sales tax from five percent to 6.25 percent in 2009.