Plan to lower sales tax to 5% heard by revenue committee – again

A pair of bills making their way through the Legislature aim to turn the clock on the state sales tax back to 2008.

Bills filed by Senate Minority Leader Bruce Tarr and state Rep. Marc Lombardo would reduce the state sales tax from its current rate of 6.25% back to the 5% charged about 16 years ago.

The bills, both bearing a title along the lines of “An Act relative to lowering the sales tax to 5%” were the subject of a Joint Committee on Revenue hearing on Monday along with about 40 other bills dealing with sales and excise taxes.

According to Brian Shortsleeve, a former Baker Administration official who is seeking the Republican nomination for governor, the idea makes a lot of sense in the current economic climate.

“Massachusetts families are being crushed by inflation, rising costs, and a government that keeps taking more of their hard-earned money. It’s time to give them a break. Rolling back the sales tax to 5% is long overdue,” he said.

The state sales tax jumped from 5% to 6.25% in August of 2009 in response to a severe budget deficit. At the time, the state was reeling from the aftershocks of the 2008 financial crisis.

The tax has remained at that level since, despite ongoing efforts to see it lowered — some version of “An Act relative to lowering the sales tax to 5%” has been submitted during each of the last five legislative sessions.

In fiscal year 2025, the state made $9.613 billion in sales and use taxes, $290 million, or 3.1% more than fiscal year 2024.

Reducing the sales tax is often cited as a means of helping middle and lower income families, who spend more of their incomes making ends meet than wealthier families, and therefore spend a proportionally higher percentage in sales tax.

“A lower sales tax means lower costs at the register for everything from school supplies to household essentials. This is real relief that people will feel immediately,” Shortsleeve said.

Not taking action means the status quo — people frequently leaving the state to do their shopping in a surrounding tax-free state — will continue unchanged. That’s not good for the state’s competitive edge, according to Paul Craney, the executive director of the Massachusetts Fiscal Alliance.

“If Massachusetts leaders want to make the Commonwealth more affordable for its taxpayers, they should cut spending and reduce or eliminate taxes. Taxpayers would benefit greatly by a reduction in the sales tax. Our neighbors in NH don’t even have a sales tax, and many shoppers go to NH for their purchases. Keeping our 6.25% sales tax is not competitive,” Craney said.

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