August 7, 2018 By Jon Hurst, President

The so-called “Grand Bargain” was signed into law in late June, and with its’ passage, three initiatives were kept off the November ballot.  One question was RAM’s rollback of the sales tax; and the other two were the $15 minimum wage and the paid family and medical leave payroll mandates. 

Make no mistake about it—without the existence of RAM’s sales tax initiative, the political pressure to remove these two costly labor mandates from the ballot would never have occurred.  The sales tax ballot initiative created the environment and the leverage to move closer to middle ground through compromise, rather than facing near certain voter passage of the labor initiatives.  Neither the Legislature nor the advocates pressing the labor mandates wanted to see a sales tax rollback with a $1 Billion price tag. 

Many factors contributed to RAM’s decision to agree to pull our sales tax ballot initiative in exchange for the agreement.  First, two major court decisions in June rendered our sales tax proposal a much tougher sell with voters.  They included a MA SJC decision eliminating the so-called “Millionaires Tax” from the November ballot, and a U.S. Supreme Court decision on internet sales tax in the SD vs. Wayfair case.  While both decisions were arguably good for our industry and the state, they also made the case for a sales tax cut more difficult without funding a multi-million dollar advertising campaign.

The more important factor leading us to the seek agreement was our ability to mitigate the effects of what would have been a near certain passage of the two payroll mandate initiatives through negotiations.  More reasonable and less costly requirements, with longer phase-in periods were vital objectives.  Movement to the public policy center on phasing out the antiquated, only in Massachusetts retail Sunday/holiday premium pay requirement; more affordable restaurant tip wages; no annual inflation increases and a slower phase-in of the minimum wage; a paid leave law which set fairer wage replacement rates and better distributed costs between employers and employees; and establishment of a permanent sales tax holiday as an important incentive for our consumers to invest their discretionary dollars in our local economy, all weighed in favor of striking a deal.     

June 22, 2018 BY JON HURST

This week, after 20 years of RAM work on sales tax fairness, the US Supreme Court ruled in favor of the future of our Main Streets by overturning the 1992 Quill decision on remote seller tax collection and remittance.  The South Dakota v Wayfair decision is important and welcomed as it will seek to end unequal application of state government imposed sales taxes.  Here in Massachusetts, we have always had the “New Hampshire problem,” but we also have a very tech savvy consumer, all too likely to send their vital discretionary dollars out of our local economy, to tax free sellers easily found right on their smart phones.  Thus for many years, local stores have had two strikes against them as tax free competitors have proliferated. 

Although the NH problem won’t be fixed, this decision certainly contains the competitive damage of tax free internet sellers.  RAM will be working closely with the Department of Revenue and our Beacon Hill leaders in the days to come to make sure as much as possible is done to create a fair marketplace and a level taxation playing field for sellers of all types.     

While the Wayfair case is a clear win for our membership, cost mitigation is a better description of the so-called “Grand Bargain” which is now on the Governor’s desk.  Presumably it will be signed into law before the July 3 signature submission deadline for ballot initiative sponsors—including RAM’s own sales reduction tax measure. 

October 24, 2107  By Jon Hurst, President

The Retailers Association of Massachusetts has been investing considerable time and resources this fall to qualify a ballot initiative to reduce the sales tax rate back to the 2009 level of 5.0%, as well as to authorize an annual August two day sales tax holiday.  Our membership polling clearly showed overwhelming support for the Association to take this rare step.  As an industry, we have not used the ballot initiative mechanism since 1994, when the voters approved a RAM sponsored measure to make Massachusetts the last state in the nation to allow stores to open on Sunday mornings, and on the three summer national holidays. 

The existence of the sales tax ballot measure creates an important opportunity to discuss what every Massachusetts small business owner needs—higher sales and lower costs.  Unfortunately, for many local employers, both of those needs are heading in the wrong direction.  And make no mistake about it—government imposed taxation, as well as labor and cost of operations mandates can and do create financial incentives on where consumers spend their important discretionary dollars.  With consumer spending representing 70% of our economy, any state policy which incents our residents to spend elsewhere instead of right here in the Commonwealth is economically dangerous in the age of the smartphone.   

The 25% sales tax increase in the Great Recession, and the lack of a sales tax holiday over the past two years couldn’t have happened at a worse time—just as mobile commerce exploded.  And despite two decades of advocacy and debate, most of those online marketers are still not collecting the 6.25% Massachusetts sales tax.  The result has been sales reductions for our local small businesses, and a more regressive state tax system for our lower income families and seniors on fixed incomes.  

Moving Ahead on Sales Tax Ballot Question

RAM’s membership overwhelmingly decided this week to move forward with an effort to put a sales tax ballot question before the voters that would reduce the state sales tax to 5% and mandate an annual sales tax holiday.

This much needed measure will provide meaningful relief to small businesses while significantly benefiting seniors and low-income families who pay a disproportionate amount of their income in sales tax.

Today, RAM represents more than 3,500 small retailers that populate the Main Streets of the cities and towns of the Commonwealth, provide good paying jobs, and bring vibrancy and economic vitality to their communities. Unfortunately, far too many of these small businesses are struggling due to tax-free competition from New Hampshire and online sellers. By reducing the sales tax and coupling it with an annual sales tax holiday each year, we can give these small businesses and their employees a fighting chance to compete and survive.

AUG. 18, 2015 • BY RYAN KEARNEY

Massachusetts employers still struggling to comply with and adjust to the negative impact of the new Paid Sick Leave Law could be facing yet another, similarly egregious and costly, employer mandate at the 2016 ballot should proponents of a recently filed initiative petition (15-35) mandating employee scheduling standards prove successful. The measure, which has been described by many in the employer community as one of the worst pieces of legislation ever written, requires certain businesses to pay one to four hours of additional pay to employees whose schedule is changed within 14 days of a scheduled shift. In doing so the proposal would follow an ever growing and increasingly troubling trend of government intrusion into the employer-employee relationship and general business operations, resulting in significant costs to employers and unintended consequences for employees.

Unfortunately, the true impact and cost of the proposal are unknown due to poor drafting which fails to clearly identify those subject to its requirements. While the proponents claim that the law only applies to fast food restaurant and retail stores with 75 or more state-wide employees, the ambiguous and conflicting provisions of the measure allow for expansion to all employers, including public employers, through regulation or judicial interpretation. The proposed scheduling requirement itself is bad enough, however the uncertainty of not knowing if the law will apply to one’s business is particularly troublesome—especially due to the tie in to the Massachusetts Wage Law which allows for a private right of action and the possibility of treble damages. Inadvertent exposure to such liability as the result of imprecise lawmaking is simply unacceptable.