August 8, 2013
Local businesses gear up for break from sales tax
By James Niedzinski
If you’ve had your eye on a new television, lawn mower or piece of fine art, the state’s sales-tax “holiday” weekend Saturday and Sunday may offer a good time to take the plunge.
Across Cape Ann, store owners and employees are embracing an expected rush of consumers — and sales.
The state’s sales tax, bumped up from 5 to 6.25 percent in 2009, will be waived entirely this weekend on all items priced at less than $2,500 — though tobacco sales and some other categories are keeping their taxed status.
Gloucester sits just less than an hour’s drive from New Hampshire, which has no sales tax, and store owners said Wednesday they think the holiday still draws or keeps shoppers on Cape Ann.
“People are always looking to save money,” said Jay Smith, owner of Gloucester’s Ace Hardware in Gloucester Crossing and the Ace Hardware in the Whistlestop Mall in Rockport.
Smith said Ace Hardware typically sees an increase in lumber and higher-priced items over the tax holiday, which the Legislature has granted annually for more than a decade – except for 2009, the year the tax went up.
The same can be said for the Sears Hometown Store on Eastern Avenue, where owner Ed Muzio said the tax-free weekend is typically a big hit.
Muzio said that, in coordination with the tax free weekend, Sears also has several items on sale as well as store-wide sales. A Kenmore refrigerator for example, usually tagged at $3,180, will be on sale this weekend for around $2,000, not including the Sears card and other offers, Muzio said — and that price cut makes it sales-tax free.
“We are expecting this to be fantastic,” Muzio said. “It has been one of our better sales of the year.”
He added that washers, dryers and refrigerators are also unusually big sellers.
One aspect of the tax-free weekend can be tough to determine; that’s whether it actually encourages new purchases, or if shoppers simply put off buying something they would normally buy until the weekend hits.
“It’s always been hard to try and measure the benefit of it,” said Peter Webber, senior vice president for the Cape Ann Chamber of Commerce.
Webber said the so-called holiday has raised public awareness and it does stimulate retail activity, especially for big-box stores and those carrying higher priced items.
Muzio acknowledged that some people probably do hold off on buying an item they need or thought about until the tax free weekend.
“Sure, and I would, too,” he said.
Webber said having a higher sales tax means that more people are likely to buy something on a tax free weekend.
“It’s a positive thing, it’s become a fixture in August for the past few years,” Webber said.
The weekend, however, does not usually make or break most businesses, including The Building Center, according to its Chief Financial Officer Tim Huff.
“This year, I think it’s going to be a little slower,” he said, noting that the Legislature approved and Gov. Deval Patrick only signed the bill last week. Huff said the weekend does not encourage major sales, but someone on the fence about buying something might be more inclined to because of the saving..
“It’s helpful, it’s better than not having it,” Huff said.
Roger Armstrong, who co-owns Gloucester’s State of the Art Gallery on Rocky Neck’s Wonson Street and on Pleasant Street in downtown Gloucester, said he believes the tax-free weekend does inspire some new purchases in the fine arts field.
“The paintings that we sell tend be a tad expensive,” he said. “(The tax free weekend) is significant.”
Armstrong said that while the gallery does sell sculptures, paintings are usually a big seller, and the weekend also increases foot traffic in general.
Even though higher priced items may benefit more from the tax holiday, store owners who cater to a different shopper said the weekend still has some affect.
“It’s a great idea, it definitely increases our business somewhat,” Karen Park of Zak’s Gifts in Manchester said.
Park estimated her most expensive item was $150, but said people buying smaller gifts in a greater amount still adds up.
“It still brings more people in for the weekend.”
While Animal Krackers on Main Street does not see a big increase in customers, manager Stacy Interrante said dog food may be a big seller this year; Cape Ann does house a number of four legged residents.
“I think we have probably seen a little increase,” she said.
James Niedzinski can be reached at 978-283-7000, x 3455 or at firstname.lastname@example.org.