In our last edition of the Retail Review, as well as in our blog—RAMblings—we presented to our members recent polling numbers which show considerable support for our industry.  The voters clearly believe that retailers are very important to our communities and our economy.  They also strongly support a sales tax holiday; and they believe the current state sales tax is too high and hurts small stores and our lower income residents.  And although they aren’t happy about potentially paying the sales tax on their internet purchases, they are willing to do so in exchange for a lower rate—a rate which will help our Main Streets and our lower income consumers.    

We all know that the internet collection problem is still not fixed, despite two decades of unsuccessful pleading with Congress to act to overrule a 1992 Supreme Court decision on catalog sales.  The Baker Administration recently released a Department of Revenue sales tax directive effective July 1, which may force a few online sellers to collect the Massachusetts sales tax.  Most out of state internet sellers will ignore it, but importantly, others will challenge it in court, which will start the legal process of revisiting that ’92 Supreme Court decision.

RAM congratulates Governor Baker for taking this important step, but realistically it will mean years of legal proceedings and appeals.  Yet in the meantime, too many out of state competitors are sucking tens of billions of consumer dollars out of our economy, due to a 6.25% government granted price advantage. 

To state the obvious, our local sellers are struggling with a very twisted government incentive for our consumers to NOT spend locally.  Online competitors—as well as the ever present southern NH stores—enjoy a 365 day sales tax holiday to entice our consumers; and last year Beacon Hill would not even grant our consumers a 2 day incentive to shop locally and to invest in our economy rather than someone else’s. 

This government discrimination against local sellers, on top of the recent, very dramatic shifts to internet sellers driven by mobile commerce, has created challenges to our Main Streets and industry like we have never seen before.   

Not all of our 4000 members are directly injured by the discriminatory sales tax; but undoubtedly you understand the consumer, and the fact that their spending represents 70% of our economy.  Perhaps you are a restaurant, food store, or service station, and don’t compete to the same degree with the price advantages and convenience of the internet, or with those sellers north of the border.  But we must focus on the fact that for all of our members, the government incented shifting of tens of billions of consumer dollars out of Massachusetts means investment, overall spending and economic growth are dramatically slashed, and jobs are killed as dark store fronts proliferate in our communities.

For this reason, the Board of Directors of the Retailers Association of Massachusetts has authorized the RAM staff to conduct legal and voter research, as well as to engage in opinion leader discussions, as to the potential of beginning a ballot initiative process to qualify a sales tax reduction measure for the November, 2018 ballot.  We welcome and urge your thoughts and input on this important discussion and investigation.  Watch your email for a Survey Monkey on this very topic.