Lawmakers face big decision on Baker’s sales tax relief plan

Boston Statehouse

BOSTON (State House News Service) – Gov. Charlie Baker has suddenly put lawmakers on the clock to decide in the coming weeks whether to move ahead with $900 million in tax relief, and the early reaction to his bombshell proposal is wide-ranging.

One top Democrat, Economic Development Committee Co-chair Sen. Eric Lesser, says the proposed two-month sales tax holiday that Baker offered on Wednesday would “do almost nothing to help our local retailers.” Jon Hurst, president of the Retailers Association of Massachusetts, disagrees, calling the proposal “a smart, exciting, and progressive economic incentive that will benefit our small businesses and our consumers just when they need it.”

Massachusetts Teachers Association President Merrie Najimy said Baker’s plan would “boost the profits of large, out-of-state big-box stores and online retailers” at a time when education and transportation investments are needed. Marie-Frances Rivera of the Massachusetts Budget and Policy Center, said it “makes good sense” to shift the tax system away from a 6.25 percent sales tax “that fall most heavily on low-income households,” but added: “Unfortunately, spending the surplus this way forecloses the ability to make investments that will transform opportunities for everyone in our Commonwealth – particularly for our low-income and BIPOC communities.”

And Evan Horowitz of the Tufts Center for State Policy Analysis said deferring further stimulus might be the way to go at this point given the already high levels of pent-up consumer demand, infusions of federal aid, and inflation worries.

As proposed, the tax holiday would start in August and run through September, and Beacon Hill Democrats will need to decide in the coming weeks whether to move forward with it, revise its length, or ditch the measure entirely.

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