Baker Proposes Waiving Massachusetts Sales Tax For Two Months

BOSTON — Massachusetts Gov. Charlie Baker proposed waiving the state's 6.5 percent sales tax for the months of August and September.

Baker, who has not said whether he will run for reelection next year, said he's expecting a surplus when the fiscal year ends June 30. The state collected more in tax revenue than projected during the coronavirus pandemic. Overall tax revenue is 14.9 percent above projections. Meanwhile, the balance of the state's so-called rainy day fund is now higher than it was at the start of the pandemic last March.

"A two-month sales tax holiday will provide a boost to Massachusetts’ taxpayers and Main Street economies as we continue to recover from COVID-19,” Baker said in a statement. "Massachusetts' economic recovery is off to a good start, but it’s crucial that the Commonwealth takes action now to spur more economic activity in communities and support taxpayers."

Last week, state lawmakers approved the usual, two-day sales tax holiday for Aug. 14 and 15 this year. Like the two-day holiday, Baker's proposal calls for waiving the tax on items under $2,500 purchased for personal use. The legislature would also need to approve Baker's proposal, which would cost Massachusetts approximately $900 million.

"People are returning to work. They’re heading out to shop and dine in our communities. And that means businesses and residents are creating more economic activity, and therefore more tax revenue along with it," Baker said. "After this very tough year, our taxpayers and small businesses all deserve a break."