MA holds a sales tax holiday; RI misses out

by ABC6 Chief Political Reporter Mark Curtis

mcurtis@abc6.com

Massachusetts is hoping to rake in the cash this weekend with its annual sales tax holiday.

That will not only bring in Bay State shoppers, but plenty from Rhode Island, too.

Advocates in the Ocean State say we need to be doing similar cuts.

“When are we going to stop letting Massachusetts eat our lunch and do something ourselves to counter that move and maybe even get ahead of the curve by having a permanent sales tax holiday in this state,” said Mike Stenhouse from the Rhode Island Center for Freedom and Prosperity.

There was a proposal to eliminate the sales tax in Rhode Island this year but the only tax cut approved was for liquor and wine.

Some lawmakers are not giving up.

“There is a commission that's going to be formed in September I believe, to look at the idea of removing the sales tax altogether or at least reducing it,” said State Sen. David Bates, (R) Rhode Island.

ABC6 Chief Political Reporter Mark Curtis said, “One of the reasons that sales tax reform failed this year in Rhode Island is because the Governor and legislative leaders were concerned about how the state would replace that lost revenue.”

In Massachusetts there are critics. The Boston Globe calls sales tax holidays a gimmick that caused the state to lose $23 million in taxes last year.

But economic analysts disagree, saying if you cut the sales tax, people will by more and states will gain.

“Increased economic activity alone makes up about two–thirds of that lost revenue. We're not afraid to say unabashedly, we need to cut revenue and taxes in this state,” said Mike Stenhouse from the RI Center for Freedom and Prosperity.

Right now the State of Rhode Island receives almost a billion dollars a year from the sales tax.