Isn't it ironic that the announcement of a possible return of the tax-free weekend comes after Beacon Hill raised our taxes by one half billion dollars for the coming fiscal year?
Gas and cigarettes will cost more and there's a new tax on software. But, for the second weekend in August, you can save 6.5-percent on your purchases with certain exceptions like restaurant meals, tobacco and single items that cost more than $2,500. Next month's sales tax holiday weekend is expected to save consumer $20 million. Don't forget to factor in the $500 million in new taxes, minus the savings, leaving you and me $480 million in the hole.
The logic behind the holiday weekend is to keep back to school shoppers here in the Bay State and not driving north to the "sales tax free" Granite State. For some retail businesses, it's too little, too late.
For example, business is booming at New Hampshire's state-owned liquor stores. The fiscal year that ended on June 30 has been the NH Liquor Commission's best ever with over $603 million in total sales. That's nearly $39 million more than last year. In their annual report, the NH Liquor Commission admits that a large portion of their increase in sales came from out of state. That means it's coming at the expense of Mass. retailers and liquor tax revenues.
Here is the real problem with this situation: it could change the habits of Massachusetts shoppers. While making the trip to NH for lower priced liquor the shopper could notice other stores. Perhaps, another outlet of a chain they already frequent in Massachusetts. This leads to more purchases in NH and less revenue for Massachusetts.
That's just the tip of the iceberg, allow me illustrate it another way. An outlet mall opens in a fairly remote area. They start off small with 15 stores. Once people get in the habit of traveling to the outlets, they build more. NH has 77 liquor stores. Not just the ones that you see on the highway. The others are situated around other stores which could siphon more business from the growing number of Massachusetts liquor shoppers. It's as simple as that.