Effort to Exclude “Meals” from Sales Tax Holiday Gains Support of Governor Baker

Legislature Expected to Adopt Law Change Today

This morning, Gov. Baker signed the FY20 state budget into law.  The Governor largely left the budget, as passed by the Legislature, intact, issuing very few vetoes and proposing few amendments.  However, one amendment the Governor did propose is the language correction to exclude “meals” from the Sales Tax Holiday.  Meals have never been included in any of the past twelve holiday events and their potential inclusion in the permanent holiday was likely a drafting error.  RAM was the first to bring this issue to the attention of the Legislature two weeks ago, and RAM asked the Governor and the Legislature to fix the issue and return to the original language of previous holidays.  The Legislature is expected to approve the Governor’s amendment, likely today, allowing the Sales Tax Holiday to continue under the same rules it has in the past, and with the same exclusions.  For a copy of the Governor’s proposed amendment, see Attachment F.
The Governor also did not make any changes to and approved the language relative to extending sales tax collection responsibility to marketplace facilitators, similar to the legislation RAM had drafted and filed earlier this session.  This important step to update the Commonwealth’s sales tax collection laws is in line with similar actions being taken across the country in the wake of the Wayfair decision, and will bring us closer to true marketplace and sales tax fairness between all sellers.  The budget language also sets in law a new sales threshold of $100,000 in sales into MA at which remote sellers are required to collect and remit, again modeled after Wayfair.  This is a major victory for local brick and mortar retailers in their decades long fight for online sales tax parity.