Tax Holiday Weekend Set to Keep JP Merchants Busy

By a special statute passed by the Massachusetts legislature, Saturday and Sunday are a Massachusetts "sales tax holiday weekend."

Here in JP, some retailers plan special sales events to coincide with the tax free weekend.  Jeffrey Ferris of Ferris Wheels Bike Shop is "expecting our biggest weekend ever." The shop, open since 1982, will offer an additional 6-8 percent discount during the sale.

"We've had a great couple of years, the economy, gas prices, the environment and personal fitness have all convinced more people than ever to ride bikes," Ferris said.

Intended as a way to boost sales during what is typically a very slow month for retailers in this school-year dependent state, the tax holiday has been enacted seven out of the last eight years, with only 2009 the exception.

JP might be an exception in the overall state economy. Several merchants, most notably the toy store, Boing, and the kitchen supply specialist, KitchenWitch, were so busy that they weren't even aware that the tax holiday was imminent although they both said they'd be ready.

At AAA Appliance, Dean Doucet said that they are geared up and looking forward to the tax break as many shoppers have already targeted appliance models for purchase but plan to pull the trigger on the weekend.  In an email blast to its members, Boston Building Resources reminds consumers that the $2,500 limit is applied to each individual item purchased and that payment must be made in full during the tax holiday. The per item component of the law would allow a shopper to buy an entire kitchen's worth of cabinets without paying tax which could result in savings of hundreds of dollars.

Most tangible retail goods priced lower than $2,500 purchased exclusively for personal use are exempt from sales tax on those two days.

Taxed as usual will be meals, motor vehicles, motorboats, telecommunications services, gas, steam, electricity, tobacco products, services and all goods purchased by businesses or by individuals for business use. A link to an outline of the law with specific examples of exceptions and special circumstances is on the home page of the Department of Revenue's website.  

In a down economy it might not have surprised anyone if the state chose not to enact the tax break this year, but recent news of better than expected tax collections for the fiscal year ending June 30 resulted in easy passage of the bill. In July the state released figures that showed revenues surpassing the annual benchmark projection by $723 million, with overall revenues up over $2 billion, an increase of more than 10 percent from the year before. The Commonwealth is flush. Governor Deval Patrick signed the bill into law on August 1.