Report: Mass. considering 7% sales tax
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BLOOMBERG NEWS FILE PHOTO / MATTHEW STAVER
MASSACHUSETTS LAWMAKERS MAY RAISE the Bay State’s sales tax to 7 percent, which would put it on par with Rhode Island’s.
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BOSTON – Mass. House Speaker Robert A. DeLeo is seriously considering raising the Massachusetts sales tax from 5 percent to 7 percent, according to a report published today.
DeLeo is looking for ways to reduce the number of votes representatives are forced to take on increasing taxes as Beacon Hill leaders explore options for closing the state’s budget gap, The Boston Globe reported today, citing anonymous sources.
According to estimates cited by The Globe, increasing the Bay State’s sales tax from 5 percent to 6 percent would bring an extra $750 million per year into state coffers, while increasing it to 7 percent would yield an additional $1.5 billion. Mass. Gov. Deval L. Patrick has expressed opposition to the idea of raising broad-based taxes to deal with the state’s fiscal problems.
An increase to 7 percent would give Massachusetts the same sales tax rate as Rhode Island, where R.I. Gov. Donald L. Carcieri recently ruled out reducing the tax to the same level as Massachusetts’ current 5 percent rate. The governor told PBN that moving to change the Rhode Island sales tax could open “a Pandora’s box.”
The Globe said DeLeo is expected to present tax increase options at meetings today as the Massachusetts House prepares to begin debating the state budget on Monday.
Massachusetts first adopted a general sales tax of 3 percent in 1966, making it one of the last states to levy a tax on purchases, according to the Massachusetts Budget and Policy Center. The rate was increased to 5 percent in 1976, and has remained the same since then.
Rhode Island first adopted a sales tax in 1947, when the rate was set at 1 percent, according to the R.I. House Fiscal Office. The rate has been increased seven times since then, most recently in July 1990, when it rose from 6 percent to 7 percent after 14 years without a change.
The 1990 increase to 7 percent initially was supposed to be temporary, with the rate falling to 6.5 percent in July 1991. But the law was changed to retain the 7 percent rate before the decrease went into effect.