Mass. governor wants to create a permanent sales tax holiday

Shoppers in Massachusetts have enjoyed tax-free weekends in years past and Governor Charlie Baker wants to make it permanent.

Baker filed a $610 million economic development bill, which includes a proposal to designate a weekend in August of each year as a permanent sales tax holiday.

Several shoppers told NBC 10 they love the idea.

“Especially if you want to buy something that costs a lot more and the taxes are gonna be higher so you end up saving a lot in the long run,” said Sandra Lee, who lives in Dartmouth.

“That weekend would be really great if maybe it was when people filed their taxes,” said Pearl Beauvais, a New Bedford resident.

The state estimates it lost $25 million in sales tax revenue during its last tax-free weekend in 2015. State Senator Michael Rodrigues (D-Westport) told NBC 10 it's a politically popular idea but an expensive one.

“It didn't really accomplish what we thought it would accomplish. When the statistics came in, it showed that it did not incentivize new spending, it just shifted spending habits,” Rodrigues said.

UMass-Dartmouth Professor Michael Goodman, who teaches public policy, called the proposal a “feel-good policy” and said the tax-free holiday could end up hurting shoppers.

“There may be price increases going on immediately before the tax holiday,” Goodman said. “It may feel like you're getting a discount but in practice that discount is very modest and often is offset by presale price hikes.”

State lawmakers have been reluctant to make the tax holiday permanent in recent years, citing in part the loss of revenue to the state.