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Bay State tax holiday means big weekend

NATICK, MA (BRAIN) Friday August 10 2012 12:34 PM MT—Massachusetts retailers are gearing up for some of their biggest days of the year this weekend, when the state's Sales Tax Holiday gets the cash registers ringing. 

The state's prior tax holidays have been "invariably the busiest weekends of the year, in terms of sales, by a large margin," said Landry's Bicycles' Peter Henry.

In a promotion dating to when Mitt Romney was governor, the state waives its normal 6.25 percent sales tax on most purchases under $2,500.

The weekend doesn't require a lot of promotion, Henry said, since most Massachusetts residents are well aware of the shopping holiday. Landry's mentions the holiday in its email newsletter, and it is marking down one Trek bike model from $2,600 to $2,500, to get it into the free-tax window.

Henry said that despite the big dollar sales, he doesn't usually have to bring in extra staff for the weekend.

"So many people come in the week before and pick out what they want, then just come in on the weekend and pay for it. It's not really that hectic," he said. Henry is one of the owners of the four-store chain.

The state first held the holiday in 2004, as part of an economic stimulus package signed by Romney. Since then the state has held it every year except one. 

Retailers and consumers didn't have much time to prepare for this year's, however: the state legislature approved the plan July 31 and Gov. Deval Patrick signed the bill Tuesday.

Sixteen states hold similar tax holidays, with various limitations on the types of purchases that qualify. Many states waive taxes only on back-to-school supplies and clothes for a few days in August.

Massachusetts' holiday is one of the more generous, applying to any consumer purchase of single items under $2,500. The state never taxes clothing retailing for less than $175 (Despite that, Henry said he sees an uptick in clothing sales during the tax-free weekend, anyway).

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