The Public Price Tag on a Sales Tax Holiday
Massachusetts legislators this week are scheduled to decide whether to give residents a sales tax-free weekend in August.
For the past several years, legislators have designated a summer weekend in which many consumer purchases are exempt from the 6.25 percent sales tax.
Lawmakers present the tax holiday as way to give consumers some relief and to help businesses by sparking new spending, but there is a cost to state government.
Numbers from the Massachusetts Department of Revenue suggest that the state loses much more than it gains. Official figures, based on previous tax holidays, show that Massachusetts is likely to forgo between $21.9 million and $26.7 million through lost sales tax over two days.
There could be extra income or corporate taxes that come about from more spending, but the state said that would only add up to $1.98 million or less.