Slight sales decline seen in Massachusetts tax holiday

Jon Chesto

Many Bay State retailers saw a modest decline in sales during this year's sales tax holiday, according to the retail industry's local trade group.

Bill Rennie, vice president at the Retailers Association of Massachusetts, said his group's staff talked to 15 to 20 retailers ranging in size from one-shop businesses to national chains to gauge how successful the Aug. 11 and Aug. 12 tax holiday was for them.

The trade group estimates that in each of the past two years, the state's retailers collectively saw about $500 million in sales over the tax holiday weekend. This time around, he expects that retailers collected a smaller amount, but his group isn't ready to make an official estimate.

Rennie said problems with the housing market appear to be weighing on consumers.

''Compared to last year, most retailers were probably down slightly or flat,'' Rennie said, ''(but) without the holiday, August numbers would really have been off. You really would have had a sharp decrease.''

Rennie said there were some notable exceptions. Sales of home electronics, such as flat-screen TVs and camcorders, were still strong.

''The high-ticket items tend to do better,'' Rennie said.

This marked the fourth time the Legislature approved a sales tax holiday for an August weekend. The first one, in 2004, offered the break on the state's 5 percent sales tax for just Saturday, but the event has been held on a Saturday and Sunday since the first year.

This was the second time the Legislature waited until the last minute to send a tax holiday bill to the governor. Gov. Deval Patrick signed the bill into law this summer just nine days before the tax holiday, while last year he signed it 10 days before the weekend, Rennie said.

Lawmakers have said they don't want to approve the tax holiday too early in the year because they don't want consumers delaying big purchases until the tax-free weekend.

Many retailers would like to see a bigger lead time, partly so they have time to plan for marketing and advertising. Rennie said an advance notice of three to four weeks would be ideal.

''If you have such a limited notice, you're limited in your options for your advertising,'' Rennie said. ''It affects your marketing and advertising strategy. ...We've always advocated to the Legislature that we need a few weeks lead time for retailers to prepare.''

Rennie said his group will have a clearer view of the latest tax holiday's success after it conducts a survey this fall of the group's members that will ask about the tax holiday, among other things.

Jon Chesto of The Patriot Ledger (Quincy, Mass.) may be reached at jchesto@ledger.com.