Massachusetts retailers seriously hurt by lack of tax free weekend in 2016

Mass retailers lost serious revenue in August due to lack of tax free weekend. Hurricane Matthew Massachusetts has even more severe impact though.

Massachusetts Department of Revenue’s decision not to hold a 2016 Sales Tax Holiday in August led to “dramatic drops in local sales and hours worked,” according to a Retailers Association of Massachusetts survey. Hurricane Matthew Massachusetts didn’t seem to impact us at all.

The RAM survey shows dramatic revenue drops & cuts to employee hours due to cancellation of Mass sales tax holiday 2016. 86% of RAM members surveyed said their sales dropped in August of 2016 over August 2015, declining by an average 24%. 75% of retailers had reduced employee hours in August and half had reduced sales tax collections, according to the survey.

Most retailers (73%)of those surveyed — held what RAM described as “we will pay the tax” promotions, offering discounts matching the 6.25 percent sales tax rate. Thirty-seven percent classified those promotions as “not effective at all,” while 3.7 percent said they were “very effective.”

Such promotions were unsuccessful this year because consumers “knew the real deal and knew they were going to have to pay the taxman if they were to spend their dollars in the Commonwealth.”

Full Survey results:

86% saw sales drops in August ’16 vs. ’15 by an average of -24%
80% were down the 2nd weekend of August by an average of -45.3%
83% were down for the combined months of July & August by an average of -19.6%
75% had reduced employee hours in August by an average of -12%
50% had reduced sales tax collections for the month of August
73% attempted “we will pay the tax” promotions with 37% finding those promotions “Not Effective at All”, 41% “Somewhat Effective” and only 3.7% as “Very Effective”
52% of the companies have competitive issues with sellers in NH
94% of the companies have competitive issues with sellers on the Internet/mobile commerce
42% sell online

Massachusetts retailers seriously hurt by lack of tax free weekend in 2016. Get full coverage of Massachusetts Tax Free Weekend 2017.

Hurricane Matthew Massachusetts Impact:

Hurricane Matthew won’t affect us in western Massachusetts directly. No rain. No wind. The indirect effects span the country. Hurricane Matthew didn’t seem to impact Massachusett’s at all.