Some on Cape Cod call an upcoming tax-free weekend a shot in the arm for retailers, while others consider it more a shot in the foot for government.
On Monday, Gov. Deval Patrick signed a bill suspending Massachusetts' 6.25 percent sales tax for retail items up to $2,500 on Aug. 13 and 14.
"It is our hope that this will provide an additional economic boost for retailers across the commonwealth," said Alex Goldstein, a Patrick spokesman. However, the governor previously told the State House News Service his support rested largely on the weekend's popularity, rather than its fiscal prudence: The measure passed by a margin of 100 votes in the House and 19 in the Senate, according to the News Service.
Miles away from the State House, retailers who sell big-ticket items on Cape Cod praised the legislation.
"It's gotten to the point where it's gone on for so many years, it's almost a necessity," said Dan Barbo, owner of Barbo's Furniture, which has locations in Falmouth, Hyannis and Dennisport. The prospect of avoiding sales tax has drawn a crowd at his business since the state began tax-free holidays in 2004. The lack of one amid the recession in 2009, he said, coincided with decreased sales that summer. "We've had years where we've doubled, tripled, I'd say one year we may have even quadrupled our sales "» normally speaking, the month of August could be a sluggish month for our industry."
Mark Sullivan, sales manager at Crane Appliance in Falmouth, also noticed an increase in sales on tax-free weekends. The store can generate gross sales between $750,000 and $1 million during tax holidays, Sullivan said, a figure he called "significantly higher" than normal summer weekends. But sales are also slower in the weeks leading up to and following the tax-free days, he added.
"I think it will add purchases on things that people may not have made," Sullivan said. "But I think it just staggers the time of the purchases."
Cape Cod's status as a summer tourist destination also makes these weekends particularly counterproductive to the region, said state Sen. Dan Wolf D-Harwich, who voted against the measure. Many shoppers reaping the benefits of lower prices hail from outside Massachusetts and would make the same purchases with or without the tax holiday, Wolf said.
"I don't think it's particularly helpful to the district I represent, and, in fact, I think it's unhelpful," Wolf said, noting the state forfeits an estimated $20 million during these weekends. "The commonwealth really cannot afford to be voluntarily giving that revenue back."
A differing view came from state Sen. Michael Knapik, R-Westfield, who spoke before the Senate in favor of the bill. Major retailers will likely enjoy a busy weekend, Knapik said.
"I just think it's going to be a boom for Cape Cod, for the mall in Hyannis, for the Christmas Tree Shop," Knapik said. Consumers also enjoy a subtle victory over the government by not paying taxes, he hypothesized. "People like the notion of pulling one over on the state "» stores have much bigger discounts on things, but there is this psychological thing," he said.
While the Cape Cod Chamber of Commerce typically pursues efforts to generate tax revenue through business, Wendy Northcross, the chamber's chief executive, has heard positive reviews from local retailers, she said.
"For the most part, they were in support of it and it's a real shot in the arm," Northcross said. "The number one thing people do when they go on vacation on Cape Cod is shop."
Still, businesses such as Impulse Art Gallery in Provincetown and The Brewster Store in Brewster, which primarily serve tourists, expect to see little difference in sales during the Aug. 13 weekend, the owners of those stores said.
As the economic benefits to the tax-free weekend remain debatable, Barbo explained it's something that has become familiar to customers and business owners.
"The consumers and retailers look forward to it," Barbo said.
