Massachusetts Sales Tax Decrease and Tax-Free Weekend Initiative (2018)

Massachusetts Sales Tax Decrease and Tax-Free Weekend Initiative
Election date November 6, 2018
Topic Taxes
Status Not on the ballot
Type State statute	Origin Citizens
List of Massachusetts measuresMassachusetts Question 1Massachusetts Question 2Massachusetts Question 3Submit

The Massachusetts Sales Tax Decrease and Tax-Free Weekend Initiative was not on the ballot in Massachusetts as an indirect initiated state statute on November 6, 2018. It was approved by the legislature on June 28, 2018.

The initiative was designed to decrease the state sales tax from 6.25 percent to 5 percent and establish a weekend in August of each year as a break from all retail sales taxes.

On June 28, 2018, Republican Governor Charlie Baker signed a bill that was passed in the Democratic-controlled Massachusetts Legislature as part of a compromise with ballot initiative proponents of three measures: a $15 per hour minimum wage initiative and an initiative to establish a paid sick and family leave program funded by a payroll tax backed by Raise Up Massachusetts, and a Sales Tax Decrease and Tax-Free Weekend initiative backed by the Retailers Association of Massachusetts.

Raise Up Massachusetts and the Retailers Association of Massachusetts had agreed not to submit signatures for their proposed initiatives since the bill had been signed. To read more about the compromise, click here.

Initiative design

The initiative was designed to decrease the state sales tax from 6.25 percent to 5 percent and establish a weekend in August of each year as a break from all retail sales taxes.

The state revenue commissioner would have been required to designate which weekend in August will be sales-tax-free by July 15, of every year. On the designated weekend, sales tax would not have been applied to retail sales. Sales tax would have still applied to business-to-business transactions, telecommunications services, gas, steam, electricity, motor vehicles, boats, meals, or any single item with a price exceeding $2,500. Any sales tax that is improperly collected during the designated weekend would be required to be remitted to the department of revenue.

Text of measure

Petition summary

The petition summary for the initiative is below:

“

This proposed law would reduce the state sales and use taxes from their current rate of 6.25% (as of September 2017) to 5.0%. It would make the same reduction in the rate used to determine the amount non-resident building contractors must deposit with the state Commissioner of Revenue as security for the payment of sales and use tax on goods used in carrying out their contracts. The proposed law would also require the Commissioner of Revenue to designate a weekend in August of each year during which many items could be purchased without the payment of sales tax (but excluding meals, motor vehicles and boats, utilities, and any item costing more than $2,500). If the reduction in the sales tax proposed by this measure were to cause a public entity funded by the sales tax (for example, the MBTA or the School Building Authority) to be unable to make a debt payment, the proposed law would require the state treasurer to make the payment instead. The state’s liability would be limited to the amount attributable to the sales tax reduction, and the public entity would be required to repay the state within 5 years.

”

Full text

The full text of the measure is available here.

Support

The Massachusetts Main Street Fairness Coalition led the campaign in support of the initiative. Jon Hurst, chairperson of the campaign, was also president of the Retailers Association of Massachusetts.

Supporters

• Retailers Association of Massachusetts

Arguments

• Jon Hurst, chairperson of the Massachusetts Main Street Fairness Coalition and president of the Retailers Association of Massachusetts, said, "Voters support reducing the sales tax because it hits seniors and low income families disproportionately and is making it more difficult for our small business to compete with the tax free New Hampshire and online sellers." Hurst also said, "I guess they feel like they've got to pay for it somehow. They are not about to let any tax dollar stay in the pocket of working families and seniors on fixed incomes. The question (the opponents) need to be asked is are they really about fair taxation or are they really about more taxation?"

Opposition

Opponents

• Sen. Stan Rosenberg (D)

• Save Our Public Services led the campaign in opposition to this initiative.

Arguments

• Senate President Stan Rosenberg (D) criticized the proposal, saying, "Putting a tax cut on the ballot is like shooting fish in a barrel -- it's pretty easy to make dinner. But cutting our sales tax would cost us billions in lost revenue, just at the moment when we need new dollars and can find them through the Fair Share Tax, a carefully calibrated referendum that ensures that only those who are clearly able to contribute do so."

• Save Our Public Services argues that the measure would "reduce state revenues by about $1.25 billion annually, necessitating severe cuts to local schools, public safety, roads, transit, health programs, and other vital services. Critical services like police and fire, health care and addiction treatment, public schools, infrastructure, parks and environmental protection could see major cuts. Communities could be forced to lay off teachers, police officers, and firefighters. Mental health and addiction treatment programs could close, spending on parks and environmental protection could be cut, and important road and transit construction projects could be delayed for years."
  • Members of Save our Public Services include:

1199SEIU A Better City AFSCME Council 93 American Federation of Teachers-Massachusetts Boston Teachers Union Coalition for Social Justice Jewish Alliance for Law and Social Action Massachusetts AFL-CIO Massachusetts Communities Action Network Massachusetts Teachers Association ​Professional Fire Fighters of Massachusetts Transportation for Massachusetts SEIU Local 509 United Food and Commercial Workers Local 1445

• Deb Fastino, executive director of the Coalition for Social Justice said: "If the sales tax cut passes, communities will be forced to lay off teachers, police officers, and firefighters. Mental health and addiction treatment programs will close, spending on parks and environmental protection will be cut, and important road and transit construction projects will be delayed for years."

• Rich MacKinnon Jr., president of the Professional Fire Fighters of Massachusetts said: "Local communities depend on the sales tax to fund first responders. It's not an exaggeration to say that a cut of this size will cost people their lives."

Campaign finance

See also: Campaign finance requirements for Massachusetts ballot measures

Total campaign contributions:
Support:	$328,423.05
Opposition:	$0.00

There was one ballot measure committee, the Massachusetts Main Street Fairness Coalition, registered in support of the measure. The committee had raised $328,423.05 and spent $310,529.92.

There were no ballot measure committees registered to oppose the initiative.

Support

Committees in support of the Sales Tax Decrease and Tax-Free Weekend Initiative Supporting committees Cash contributions In-kind services Cash expenditures Massachusetts Main Street Fairness Coalition $326,750.00 $1,673.05 $308,856.87 Total $326,750.00 $1,673.05 $308,856.87

Totals in support Total raised: $310,529.92 Total spent: $328,423.05

Donors

The top donors in support of this initiative were as follows:

Donor	Cash	In-kind	Total
Retailers Association of Massachusetts	$325,000.00	$1,673.05	$326,673.05
M. Steinert & Sons Company, Inc.	$1,000.00	$0.00	$1,000.00

Opposition

There were no ballot measure committees registered to oppose the initiative.

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Polls

See also: Ballotpedia's approach to covering polls

See also: 2018 ballot measure polls

WBUR released a poll conducted by MassINC Polling Group of 504 registered voters in Massachusetts. The poll results showed 69 percent support for the sales tax decrease initiative, with 47 percent strongly supporting it and 22 percent somewhat supporting it. The 20 percent who opposed the initiative were divided into 13 percent who somewhat opposed it and 7 percent who strongly opposed it. The remaining 11 percent were undecided or did not respond.

Massachusetts Sales Tax Decrease and Tax-Free Weekend Initiative
Poll	Support	Oppose	Undecided	Margin of error	Sample size
WBUR Poll (conducted by MassINC Polling Group 11/9/2017 - 11/12/2017	69%	20%	11%	+/-4.4	504
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Background

See also: Tax policy in Massachusetts

History of sales tax in Massachusetts

As of 2018, the state sales tax rate in Massachusetts was 6.25 percent. In 2009, the state legislature increased state sales tax from 5 percent to 6.25 percent. As of 2018, the state of Massachusetts did not levy any local sales taxes.

In 2010, voters defeated a state initiative that was designed to decrease sales tax from 6.25 percent to 3 percent. Fifty-seven percent of voters voted against the measure, while 43 percent voted in favor of the sales tax decrease.

Sales tax in neighboring states

The table below displays the state tax rates, average local tax rates, and average combined tax rates for Massachusetts and its neighboring states.

Combined sales tax rates, 2015
State	State sales tax	Average local sales tax	Combined
Massachusetts	6.25%	0.00%	6.25%
Connecticut	6.35%	0.00%	6.35%
New Hampshire	0.00%	0.00%	0.00%
Rhode Island	7.00%	0.00%	7.00%
Note: For full annotations, see the source below. Source: The Tax Foundation, "State and local sales tax rates, 2017," accessed October 26, 2017

The table below summarizes sales tax rates for Massachusetts and neighboring states in 2017 as well as the state's policy with respect to types of items commonly exempted from sales tax (i.e., food, prescription drugs and nonprescription drugs).

Sales tax rates, 2017
State	Sales tax rate	Exemption status
		Food	Prescription drugs	Nonprescription drugs
Massachusetts	6.3%	Exempt	Exempt	Taxable
Connecticut	6.4%	Exempt	Exempt	Exempt
New Hampshire	0.0%	No state sales tax	No state sales tax	No state sales tax
Rhode Island	7.0%	Exempt	Exempt	Taxable
Source: Tax Policy Center, "Sales Tax Rates 2000-2017," accessed October 26, 2017

Versions of the proposal

Jon B. Hurst, President of the Retailers Association of Massachusetts, filed two versions of the initiative. Both versions of the initiative were designed to provide for a weekend in August of each year without a state sales tax on retail for non-business customers. Version 17-19 was designed to decrease the state sales tax from 6.25 percent to 4.5 percent. Version 17-21 was designed to decrease the state sales tax from 6.25 percent to 5 percent. The proponents decided to proceed with signature gathering for Version 17-21, abandoning Version 17-19.

The petition summary for the abandoned Version 17-19 is below:

Initiative 17-19

This proposed law would reduce the state sales and use taxes from their current rate of 6.25% (as of September, 2017) to 4.5%. It would make the same reduction in the rate used to determine the amount non-resident building contractors must deposit with the state Commissioner of Revenue as security for the payment of sales and use tax on goods used in carrying out their contracts. The proposed law would also require the Commissioner of Revenue to designate a weekend in August of each year during which many items could be purchased without the payment of sales tax (but excluding meals, motor vehicles and boats, utilities, and any item costing more than $2,500). If the reduction in the sales tax proposed by this measure were to cause a public entity funded by the sales tax (for example, the MBTA or the School Building Authority) to be unable to make a debt payment, the proposed law would require the state treasurer to make the payment instead. The state’s liability would be limited to the amount attributable to the sales tax reduction, and the public entity would be required to repay the state within 5 years.

The full text of initiative Version 17-19 is available here.

The group backing this initiative also filed initiatives designed to decrease the sales tax in the state but not add the tax-free weekend provision. Petitioners decided to move forward with the version that includes the tax-free weekend.

Path to the ballot

See also: Laws governing the initiative process in Massachusetts

In Massachusetts, the number of signatures required to place an indirect initiated state statute on the ballot is equal to 3.5 percent of votes cast for governor in the most recent gubernatorial election. The first 3 percent is collected in order to refer the indirect initiative to the Massachusetts General Court. If members of the General Court pass and the governor signs the initiative, then the initiative becomes law. If the legislature declines to act on an initiative or the governor vetoes it, sponsors of the initiative need to collect additional signatures equal to 0.5 percent of the votes cast for governor.

To make the 2018 ballot, sponsors of an initiative needed to collect the first round of 64,750 signatures between September 20, 2017, and November 22, 2017. If the General Court failed to act on the initiative by May 2, 2018, then an additional 10,792 signatures were required by July 4, 2018.

Petitioners filed two versions of the initiative. On September 6, 2017, Attorney General Maura Healey (D) approved both versions of the initiative for signature gathering. In late September 2017, the petitioners selected Version 17-21—the 5 percent sales tax version—and began collecting signatures for it.

The Massachusetts Main Street Fairness Coalition, which is backing this initiative, reported turning in about 117,638 signatures to the office of the secretary of the commonwealth by the deadline on December 6, 2017. The office of the secretary of the commonwealth confirmed that signature petitions for this initiative were submitted. Prior to submission to state officials, the signatures were submitted to local registrars of voters by a deadline on November 22, 2017, and verified by the local registrars.

On December 21, 2017, the secretary of state said that a sufficient number of signatures had been submitted and certified the measure to move forward in the process. Since the General Court failed to act on the initiative by May 2, 2018, an additional 10,792 signatures would have been required by July 4, 2018. However, the Massachusetts Legislature passed a compromise bill, therefore the proponents did not submit additional signatures for the initiative to place it on the ballot.

"Grand bargain" compromise deal

On June 28, 2018, legislation was passed in the legislature and signed by the governor as part of a compromise with ballot initiative proponents of three measures: a $15 per hour minimum wage initiative and an initiative to establish a paid sick and family leave program funded by a payroll tax, both backed by Raise Up Massachusetts, and a Sales Tax Decrease and Tax-Free Weekend initiative backed by the Retailers Association of Massachusetts.

The three initiatives were approved by the legislature since the Democratic-controlled Massachusetts Legislature passed and Republican Governor Charlie Baker signed a compromise bill known as the "grand bargain." The bill, House Bill 4640 (HB 4640), was passed in the Massachusetts House of Representatives on June 20, 2018, in a vote of 126 to 25. It was passed in the Massachusetts State Senate in a vote of 30 to 8, with two vacancies in the chamber. Of the eight no votes in the Senate, six of them came from Democratic senators and two came from Republican senators. Of the seven Republican senators in the Massachusetts Senate, all voted yes except Donald Humason Jr. (R-Second Hampden and Hampshire district) and Ryan Fattman (R-Worcester and Norfolk district).

The bill allows workers to take 12 weeks of paid leave, raises the minimum wage to $15 by 2023, and gradually (over five years) phases out time-and-a-half pay for Sunday work. The bill also requires the state to hold an annual sales tax-free holiday in August, though it did not reduce the state sales tax, as was proposed in the Sales Tax Decrease and Tax-Free Weekend initiative by the Retailers Association of Massachusetts. Raise Up Massachusetts and the Retailers Association of Massachusetts had agreed not to submit signatures for their proposed initiatives since the bill had been signed.

Compromise negotiations

Massachusetts Governor Charlie Baker reported in early May 2018 that he was engaged in talks of compromise with initiative proponents and leaders of the Massachusetts Legislature to reach a "grand bargain" before the measures go to voters in November. Baker said, “I’ve said all along that my hope is that we end up finding a way to work with a number of the folks who have ballot questions pending to come up with what I would describe as sort of a grand bargain. I know there have been conversations going on with both the House and the Senate and with folks in our administration with proponents on a number of these different questions and those conversations have been pretty productive." Proponents of the three measures had been in negotiations with each other, lawmakers, and business leaders to reach a compromise. State officials wanted a compromise to be made in the state legislature because had the three separate measures gone to the voters and been approved, it would have had a profound effect on the Massachusetts economy: raising the minimum wage, establishing a paid family and medical leave program, decreasing the state sales tax, establishing a sales tax free weekend, and keeping time-and-a-half pay for Sunday work. Governor Charlie Baker said, "The product of this is a far better product for the commonwealth than each of these as stand-alone entities would have been for Massachusetts, which is why I'm signing it."

Raise Up Massachusetts had been in negotiations concerning the paid family leave initiative exclusively, negotiating with the Associated Industries of Massachusetts, the Greater Boston Chamber of Commerce, the Massachusetts Business Roundtable, and the Springfield Regional Chamber under the leadership of Rep. Paul Brodeur (D) and Sen. Jason Lewis (D). In a June 7, 2018, letter to Senate President Harriette Chandler (D) and House Speaker Robert DeLeo (D), Raise Up Massachusetts wrote, "we've reached agreement on most aspects of a paid leave program that we believe could pass the Legislature with the support of both our coalition and the business groups, and we are very close to resolving the remaining provisions."

At the request of legislative leadership and Governor Charlie Baker, Raise Up Massachusetts entered negotiations on the two other measures they were backing: the $15 minimum wage initiative and the Income Tax for Education and Transportation Initiative, (often referred to as the millionaire tax initiative, which was stricken from the ballot), and with the Retailers Association concerning the sales tax decrease initiative.

In negotiations between the Retailers Association of Massachusetts and Raise Up Massachusetts, the Retailers Association sought concessions from Raise Up including a sub-minimum wage for teenagers and repealing the law that requires time-and-a-half pay on Sundays. Raise Up wrote that "Policies such as a sub-minimum wage for teens or the elimination of Sunday time-and-a-half pay would hurt some of our most vulnerable workers and their families, and we cannot support or accept them." At that time, Raise Up said they already made some concessions to RAM in the interest of striking a deal, including an offer to increase the minimum wage over five years instead of four.

Raise Up wrote in a press release regarding the court decision that blocked the 4 percent tax on income above $1 million initiative that they remain "strongly committed to winning a $15 minimum wage and paid family and medical leave for all Massachusetts workers this year, in the Legislature or on the ballot.”

A compromise on the measures allowed them to be resolved in the legislature rather than going to voters in November.

Related measures

• A initiated constitutional amendment increasing the tax on income above $1 million was also certified for the 2018 ballot in Massachusetts.

Below are the certified tax-related measures on the ballot in 2018:

Taxes measures on the ballot in 2018
State	Measures
Virginia	Virginia Question 1: Property Tax Exemption for Flood Abatement Amendment a
Nevada	Nevada Question 4: Medical Equipment Sales Tax Exemption Amendment a
Oregon	Oregon Measure 101: Healthcare Insurance Premiums Tax for Medicaid Referendum a
Georgia	Georgia Amendment 3, Forest Land Conservation and Timberland Properties Amendment a
Virginia	Virginia Question 2: Remove Restriction on Residence for Surviving Spouse of Disabled Veteran Tax Exemption Amendment a
Oklahoma	Oklahoma State Question 801: Allow Certain Voter-Approved Property Taxes to Fund School District Operations Amendment d
Maine	Maine Question 1: Payroll and Non-Wage Income Taxes for Home Care Program Initiative d
Georgia	Georgia Referendum A: Homestead Municipal Property Tax Exemption a
South Dakota	South Dakota Initiated Measure 25, Tobacco Tax Increase Initiative d
Washington	Washington Advisory Vote 19, Non-Binding Question on Oil Spill Tax Repeal d
Missouri	Missouri Proposition D: Gas Tax Increase, Olympic Prize Tax Exemption, and Traffic Reduction Fund Measure d
Georgia	Georgia Referendum B: Include Business-Financed Properties in Existing Non-Profit Mentally Disabled Housing Tax Exemption a
Louisiana	Louisiana Amendment 6: Phase-In of Tax Increases from Property Reappraisal Amendment a
Utah	Utah Constitutional Amendment B: Tax Exemption for Property Leased by a Government Entity d
Montana	Montana LR-128: Property Tax for State University System Measure a
Utah	Utah Nonbinding Opinion Question 1, 10 Cents per Gallon Gas Tax Increase for Education and Local Roads d
Arizona	Arizona Proposition 126: Prohibit New or Increased Taxes on Services Initiative a
Florida	Florida Amendment 5: Two-Thirds Vote of Legislature to Increase Taxes or Fees Amendment a
Colorado	Colorado Proposition 110, "Let's Go Colorado" Transportation Bond and Sales Tax Increase Initiative d
Colorado	Colorado Amendment 73, Establish Income Tax Brackets and Raise Taxes for Education Initiative d
Montana	Montana I-185, Extend Medicaid Expansion and Increase Tobacco Taxes Initiative d
California	California Proposition 72: Rainwater Capture Systems Excluded from Property Tax Assessments Amendment a
Florida	Florida Amendment 2: Permanent Cap on Nonhomestead Parcel Assessment Increases Amendment a
California	California Proposition 5: Property Tax Transfer Initiative d
Washington	Washington Initiative 1631, Carbon Emissions Fee Measure d
California	California Proposition 6: Vote on Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative d
Oregon	Oregon Measure 103: Ban Tax on Groceries Initiative d
Washington	Washington Initiative 1634: Prohibit Local Taxes on Groceries Measure a
Utah	Utah Constitutional Amendment A: Active Military Property Tax Exemption a
North Carolina	North Carolina Income Tax Cap Amendment a

See also

2018 measures

• 2018 ballot measures
• Taxes on the ballot

Massachusetts

• Massachusetts ballot measures
• Massachusetts ballot measure laws

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls