The 2005 Massachusetts Sales Tax Holiday Weekend

Those of you in the area know that last weekend was The 2005 Massachusetts Sales Tax Holiday Weekend. The theory is that this gives a boost to retailers, since it’s a sale at every single store, getting people to go out and buy things during a normally slow time. The long-term benefits to retailers, plus the short-term benefits in meal and gas taxes which are still collected, make up for the lost tax revenue.

That’s the theory. Here’s the practice, at least as applied to my life:

Jessi and I picked out about $4,200 in appliances about a month and a half ago (since we need to fill up our new house), and paid half of it then. We paid the balance over the weekend, even though the house isn’t ready for the products yet, to save about $210 in sales taxes. It was rather nice, but it didn’t encourage me to spend more, since we picked the items out before the holiday was even announced.

We needed to order checks, since we can’t find the remaining pad of checks we already have (they’re likely in the garage, somewhere), our address has changed, and we needed new checks soon anyway. Rather than going through my bank’s preferred check printer, I decided to go through Walmart Check Printing. Their prices were much cheaper, and I think that their checks would work just as well. However, they charged me 38 cents in sales tax. I’ve been through several emails with them, and called them up, and all I can get is that their “Quality Department” would look into it and maybe call me back eventually. (The state clearly says that Internet and out-of-state retailers should not collect the tax.)

I also wanted to order our switch, figuring that it was as good a time as any to buy it. However, the switch is only available online in their business division, which charges sales tax (since businesses don’t get the sales tax holiday). I called them up, and they were willing to sell me the switch through the home division (assuming I could understand the non-native speaker of English on the other end correctly), but they wouldn’t give me the $40 discount on the product that the small business division was offering. Since the discount was roughly four times the tax they were going to charge, I ordered it online and paid the tax anyway.

The online invitation retailer that I indirectly work for didn’t handle things any better, of course. We just happened to know that we had to check for any Massachusetts orders from the weekend before processing them so that we could handle them specially. The sales tax for Massachusetts orders from the weekend was less than the amount they paid me to query the database for them.

I’m not convinced that this special holiday with all these exceptions is really worth it. I think a better idea would be cutting back the state sales and/or income tax more permanently.

1 thought on “The 2005 Massachusetts Sales Tax Holiday Weekend

  1. I agree that the holiday is a waste of resources. The rules are somewhat complicated (in terms of whether a sale occurred over the weekend, and whether or not the sale exceeded the $2500 limit for tax exemption, and whether the item was for business use which still pays tax), and as you point out requiring retailers to participate puts burdens on small business.

    Also, the government should not be encouraging impulse purchasing by interfering with people thinking about whether a purchase makes sense.

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