Patrick makes Mass. 19th state to have sales-tax holiday, coming Aug. 14-15

BOSTON – Despite the possibility that doing so would generate a $20 million to $23 million revenue shortfall for the state, Mass. Gov. Deval L. Patrick signed sales tax holiday legislation into law Thursday, making the Bay State the 19th state to do so.
There was no sales tax holiday last year, but in 2008, the state reported that Massachusetts taxpayers saved $14.9 million, while in 2007, they paid $15.9 million less in sales tax.
Last year Patrick had said that the state could not afford to do without the revenue, given its dire budget situation.
Items to be exempt from sales tax must cost $2,500 or less. Exempt items are non-business retail items to be used as personal property only, such as clothing or alcohol. Those items not exempt include vehicles, gasoline, steam, tobacco products and other business-related items. The holiday is to take place next weekend, Aug. 14 and 15.
While 19 states holding a tax holiday is a record, they are not universally loved. Bloomberg News reported that the Tax Foundation found sales-tax holidays to be gimmicks that did not deliver broad-based tax relief. And Georgia, citing its $2 billion budget deficit, canceled its sales-tax holiday.
In response to Massachusetts re-establishing its sales-tax holiday, Rhode Island gubernatorial candidate and R.I. General Treasurer Frank T. Caprio lauded the Ocean State’s “everyday” tax holiday, noting that clothing is not subject to sales tax every day in Rhode Island.