Published in the August 12, 2016 edition
By GAIL LOWE
MELROSE — Retailers and shoppers alike are upset over the announcement in mid-July that government officials in Massachusetts decided to eliminate tax holiday weekend this year because of the significant deficit in the current budget. The state apparently needs every penny, nickel and dime it can get its hands on to make ends meet due to the shortfall.
Homeowners often have waited until mid-August to replace a worn-out washing machine or dishwasher, but this year they are out of luck. Newlyweds looking to furnish their apartments or condos with sofas, chairs, end tables and other furniture will not get a tax break, either.
One disgruntled retailer is Al Porcaro, owner of Hugo’s Appliance on Main Street in Melrose. “I’m so disappointed (over the news),” he said. But Porcaro is taking a creative approach that will also impact his bottom line. He’ll pay the tax through the end of August.
Shoppers also weighed in on the measure, including Sandra Ball, who splits her time between Bradenton, Fla. and Wakefield. She said the tax free weekend cancellation hurts poor people. “They hold off buying until they can buy tax free,” she said. “This does nothing to help them or the economy.”
In explanation of the cancellation, State Rep. Paul Brodeur (D-Melrose) said that the state is in dire financial straits and government officials are concerned about being close to the edge.
“We were too high in our anticipation of $750 million in overall revenue from categories like sales tax and capital gains revenue for the upcoming year,” he said.
“We had to make tough cuts to programs like the kindergarten grant, which will impact Melrose in a significant way. We also didn’t fund charter school reimbursements at a level we’re comfortable with. These cuts affect communities the most.” He noted that cuts also are being made to the substance abuse program in Melrose, Wakefield’s NARCAN program and the new arts center in Wakefield known as the Albion Street Exchange. On a more positive note, however, Brodeur said some funding to the Massachusetts Cultural Council will be restored, but this does not help retailers facing loss in revenue this month.
“Governor Baker is being extremely cautious about making sure the budget is balanced,” said Brodeur.
Many local retailers, from appliance store owners to clothing boutiques, are up in arms about the announcement, which came late in the year after advertising plans already had been laid out. They had anticipated greater sales in August since tax free weekend, as it is more commonly called, has always enticed people out of their homes and into their stores to get the best deals of the year.
The sales tax holiday weekend saves shoppers 6.25 percent in sales tax on items valued up to $2,500. Now, if economic conditions don’t improve, it may become nothing but a fond memory in the minds of those looking for mid-summer and back-to-school bargains.
Parents typically have delayed the purchase of electronics like laptop computers for their college-bound children and school supplies for the younger set in anticipation that they would save a bundle if they held off shopping until the second weekend in August when tax free weekend is typically held.
Some business owners are looking at the situation in a positive way. As an example, Will Gray, owner of Gray’s Appliance in Melrose, took the news in stride and decided to turn lemons into lemonade.
“The buzz on the street that an announcement concerning a budget shortfall would be coming soon gave us an early warning sign that tax free weekend would not be held this year,” said Gray. “People anticipating spending $10,000 on kitchen appliances would have saved 6.25 percent.”
Gray continued: “The loss of tax free weekend has forced us to be more attentive to our customers by making sure we know what their needs are. What this means is that every person who walks through our door is more valuable than ever. This actually puts us in a better position to anticipate what their needs are.”
Gray added that people started coming into his store four to six weeks ago to inquire about what would be on sale. “We’ll still offer a competitive package, and we’ll be as aggressive as possible in terms of saving our customers money.”
Gray recalled the first tax free weekend held in 2008 and said it was “chaotic.”
“People were lined up at the back door waiting to talk to a salesperson,” he said. “I could have put out a 10 percent off blinking neon light, and it wouldn’t have enticed people into the store the way tax free weekend always did.”
Gray isn’t the only retailer to be disappointed over the cancellation of tax free weekend. Joe Tozza, owner of Marty’s Furniture on Washington Street in Melrose, said that “the government does not understand business.”
“Waiting until June to decide whether to move forward with the tax holiday was just plain wrong,” he said. “We had advertising to do on radio and in newspapers. On January 1 we should have been able to plan our whole year.”
When the announcement about the cancellation of tax free weekend was made, Tozza had to come up with a whole new advertising plan. For him, making up what his store will lose in revenue is not going to be easy.
Tozza said that shoppers should keep their eye on upcoming sales at his store as well as the store’s clearance in October. He added that his prices will remain competitive and to make up for the loss in August, he and his brother John, who co-owns the store, are doubling the sales tax savings and offering free delivery for the month of August. Meanwhile, Tozza hopes that next year the news will be better.
“We need to keep tax free weekend going,” he said.
In Wakefield, the reaction to the loss of tax free weekend is similar to that of Melrose retailers. Arthur Maressa, owner of LARS Service Center Inc. since 1959, said the loss of the weekend is “a big loss for all retailers,” but like other store owners he is considering ways to offset the anticipated loss.
“We could have a substitution sale in lieu of tax free weekend,” he said.
“They’re saying the economy has bounced back, but it’s not true,” Maressa continued. “The cost of everything is going up. And the uncertainty of the election coming up in November is making people extra cautious in their spending. It’s hurting all of us. I’m very disappointed.”
But not everyone has reacted in the same way as Maressa and his counterparts. Doug Hart, owner of Hart’s ACE Hardware at the corner of Main and Water streets in Wakefield, said there will be little to no impact on his business.
“We don’t have that many big items,” he commented. “Appliance stores will feel it a lot more. Tax holiday weekend has never really affected us.”
State Rep. Donald Wong (R-Saugus and Wakefield), he said he hopes that during the next quarter more revenue will come in, but there’s no guarantee.
“I see stores holding big sales right now (to offset the loss of the tax holiday weekend),” Wong said.
Rada Frohlichstein, owner of Rada Consignment and Upscale Boutique on Main Street in Wakefield, called the loss “a slap in the face.”
“We need to boycott this action,” she said.
She wrapped up, saying that she’d like to send a message to the state’s authorities. “I have a good mind to close my store the second weekend in August. Need computers and school supplies for your kids? Go shopping in New Hampshire where there is no sales tax.”
But Marianne Cohen, executive director of the Wakefield-Lynnfield Chamber of Commerce, has an alternative view.
She said, “Even though it is a statewide mandate that there will be no tax free weekend, this is the perfect opportunity to shop local and support our community businesses.”
