Mass. Residents Deserve Inflation Relief

Originally published in CommonWealth Magazine on June 18, 2022


Mass. Residents Deserve Inflation Relief

With money available, state should eliminate protectionist laws

by Jon B. Hurst, RAM President


A few of us are old enough to remember the last severe bout with inflation four decades ago. My first mortgage right out of college was a whopping 12 5/8 percent. Gas and food prices were through the roof, and families fell further and further behind despite rising wages.

In many ways the picture is as bad, or even worse, today. Energy prices and consumer essentials are far higher, interest rate increases are far from over, and the plunging stock market has become more important due to individualized retirement plans like 401ks.

Yet, while inflation is hammering consumers and small businesses, government has never had it so good, with revenues driven by pandemic federal dollars; and tax receipts such as sales, income, and property taxes all driven far higher with consumer goods, wages, and property value increases.

Before the Legislature adjourns for the year and before Gov. Charlie Baker leaves office, it is hard to imagine a more pressing priority for our consumers, taxpayers, and small businesses than an inflation relief package. There’s not only plenty of revenue for relief, but there are plenty of antiquated and protectionist laws in Massachusetts which hammer consumers to the benefit of certain industries and suppliers. There has never been a better time to reform these protectionist laws, and to create marketplace forces to lower consumer prices. Here are just a few opportunities worth reforming, repealing, or suspending.


Read More

Amortizing $7 B in COVID UI Claims Simply Not Good Enough

Amortizing $7 B in COVID UI Claims Simply Not Good Enough
June 6, 2021 -- by Jon Hurst, RAM President

Beacon Hill recently passed legislation which was billed as a fix for the $7 billion unemployment insurance crisis.  It was the second such bill passed in two months.  Yet employers are still waiting for government to step up with shared responsibility by making a fair down payment on the unprecedented employer tax increase for COVID layoffs triggered by public policy.

The “fixes” to the UI system to date has been all about amortizing over 20 years the incredible $7 billion of COVID claims paid over 17 months.  Through state bonding, the $7B (plus interest) is being spread out, preventing as much as 1600% immediate 2021 tax increases; but current and future employers are still being handed the entire bill of the claims and the interest charges.  To put that $7B in perspective, it is equivalent to 5 years’ worth of normal Massachusetts UI taxes and claims—and those typical annual UI taxes are already the highest in the US.  And of course, over the next 20 years, new, typical UI claims will also continue, ensuring growing payroll tax liabilities for decades.
The $7 B delayed tax increase will most certainly suppress future wage and job growth in the Commonwealth.  And by mortgaging the entire huge debt, Beacon Hill has yet to deliver what most states have already done to date—by making an appropriate “down payment” on the debt by recognizing a shared responsibility by state government to cover an appropriate amount of the COVID layoffs cost.  In fact, more than half of the states—most with far less dire UI Trust Fund debt than Massachusetts—have devoted federal COVID relief funds to bring down the debt and relieve employers from significant portions of the cost of the layoffs from the pandemic. 
These states have used either CARES Act federal funds from 2020, or committed to using American Recovery Plan Act (ARPA) dollars from the 2021.  Massachusetts is receiving $5.3 B in ARPA funds.  A significant amount of those funds should be committed now to this crisis, to bring down the future borrowing, interest charges, and unprecedented tax increases for employers.  And certainly, the state budget is in very good shapes with continuing increased tax revenues and expenditures far in excess of our rate of economic growth.  
Unlike any past recession, the facts are clear that the UI claims from COVID over the last year were not the fault of employers.  Small business owners did not order the business closures, the work place and commerce restrictions, nor did they prompt school and daycare closures.  Employers certainly didn’t trigger the extra emergency UI benefits which incented many to not work, because the majority of claimants made more on benefits than previously on the job.  And they certainly didn’t cause the hundreds of millions in unrecoverable, fraudulent UI claims.  Government triggered the UI claims due the health concerns, business restrictions and benefits structures, yet under current state law, the entire bill of over $7 Billion is currently being paid for by current and future Massachusetts employers.
We can all understand that 200 legislators are hearing from countless organizations, special interests, and constituent groups looking for a piece of that once in a lifetime kitty of $5.3B in ARPA funds from the federal government.  But Beacon Hill’s very first decision, and their very first investment of those ARPA funds should acknowledge government’s role in the $7 B COVID UI debt, and the need for shared responsibility for that unprecedented tax liability. 
Recognizing government responsibility, and prioritizing fair levels of public investment into those COVID claims, will send the right message that small businesses didn’t cause the problem.  Rather the message would be that it is vital that wage and job growth be incented going forward, rather than the creation of economic stagnation due to the assessment of unfair taxation. 

PPP Loan Forgiveness…Where Are We Now?

PPP Loan Forgiveness…Where Are We Now?

While PPP Loan Forgiveness is intended to help small businesses, the overwhelming amount of changes to the program have left many feeling lost, unsure of the next steps to take. ConnectPay, a longtime partner of RAM, wants to help clear the confusion with their webinar PPP Loan Forgiveness…Where Are We Now? on Tuesday, November 10th at 11:30AM. This RAM-exclusive opportunity will be ConnectPay’s seventh webinar on PPP, and will cover vital topics related to forgiveness, including:

• Recent Updates to PPP Loan Forgiveness
• Covered and Alternative Covered Periods
• 3508, 3508S, 3508EZ Form Reviews
• Safe Harbor Rules for Forgiveness
• Inside Information from Lenders and Capitol Hill
• Tax Implications of a Forgiven Loan

There will also be a Q&A session to answer any additional questions you may have on forgiveness.  If you’re struggling to stay on top of PPP Loan Forgiveness and looking for some guidance, make sure to sign up today to reserve your spot.

Read More

Lower Sales, Higher Costs Endanger Massachusetts Main Streets

October 22, 2020 by Jon B. Hurst, President

Come January, countless small business owners will review their receipts and expenses and decide if they can stay open. They will be making that heart wrenching decision at a time of great uncertainty. Can they take the risk that they can bring consumers back into their stores and restaurants and drive up sales to cover their expenses, or are the costs of operating just too much?

Four major pressure points for small business in Massachusetts are state government mandated cost drivers that are coming their way.


Read More

The Connected Payroll Model: Celebrating Small Businesses And Helping Them Thrive

The popular image of Main Street America is familiar and welcoming: charming storefronts, restaurants with brightly colored awnings, old-school pharmacies, newer cafes, coffee shops, shoe repairs and more. Those small businesses make up a large part of America’s cultural history and its modern economy. Jon Hurst, President of the century-old Retailers Association of Massachusetts sees an even more powerful tradition at play in those mom-and-pop shops. 

“Historically, it’s been the go-to industry for entrepreneurs. Maybe you worked for a large company, but always had a dream of opening your small business, employing people, and serving customers,” Hurst says. That tradition of bootstrap entrepreneurs chasing their dreams and creating local jobs is alive and well in America today. According to the Small Business Administration’s most recent survey results, U.S. small businesses created 1.9 million net jobs in the span of a year, and firms employing fewer than 20 employees experienced the largest gains, adding 1.1 million net jobs.

But those small business entrepreneurs, having saved the money to start a company and poured their heart and soul into their vision, face an increasingly complex environment in 2019. Next-day internet shipping, dominant big box stores, skyrocketing rents, and minimum wage increases make margins tight. But most mind-boggling of all can be navigating all of the red tape of managing details like payroll taxes, paid sick leave, family leave, workers’ compensation and more. Hurst worries that even the hardiest of new business owners may become overwhelmed by the grittiness and complexity of compliance. “Because of those challenges, you get concerned about whether we will have the same number of entrepreneurs jumping in with both feet and taking that risk of opening up a new shop,” he says.

That’s part of the reason why RAM announced a partnership with ConnectPay five years ago. It’s the first payroll and compliance company the association has endorsed in its hundred-year history. RAM’s goal in teaming up with ConnectPay is to help its small business owner members address those complexities and cut through the red tape, so that they can focus on the important things: namely, running their companies.

Read More

Small businesses are taking the rap on health care costs

February 26, 2019 by Jon Hurst, RAM President

When it comes to health care in Massachusetts, there’s good news and bad news. The good news? The state recently announced that individuals who buy health care through the Health Connector, our health care exchange, pay the second lowest premiums in the country. The bad news? According to the Massachusetts Health Policy Commission, small businesses and their employees in the state have the second highest premiums in the country.

At first blush, the disparity doesn’t make a lot of sense. After all, Massachusetts has some of the highest health care costs in the nation. But the reason for the discrepancy is straightforward enough: Small businesses are effectively subsidizing individual health care premiums in Massachusetts. Employees of small businesses are required to pay more than their fair share so individuals can pay far less.

And it’s about to get worse. Next year, small businesses in Massachusetts with 50 or fewer employees will receive no pricing adjustment for purchasing health care in bulk for their employees, their lower administrative costs, or the fact that their employees are actuarially a better risk compared to individuals. And to go along with those unaffordable premiums, most of these employees will be forced into high deductible plans, joining the nearly 60 percent small-business level already seen, which requires sharing more of the cost with their employer compared with government and big-business work settings.

Read More


January 2, 2019 by Jon Hurst, President

As we celebrate the New Year and look optimistically at the future, many small business owners are facing 2019 with fear for their profitability, given new state payroll mandates on wages and paid leave.

Effective January 1, small businesses saw the increased mandated payroll costs of a $1 minimum wage hike.  This increase is on top of a $3 increase which was just fully implemented two years ago, and is the first step of a $4 increase over 5 years.  Together, the $7 hike over 9 years represents an 88% increase over a period of time in which the cumulative inflation rate is unlikely to exceed 20%. But it isn’t just the wages of new employees, it’s the compression effect of higher wages right up the ladder, along with the mandated Social Security, Unemployment Insurance (UI) and workers compensation premiums that come with it.  And on July 1, those payroll taxes will also include a new state family and medical leave tax on employers and employees alike.

In the day and age of the smartphone, you can’t just raise prices to cover these new costs and expect consumers to still pay you for your goods and services when they can buy anywhere.   So to balance out the new mandated payroll costs, Beacon Hill should do the following in 2019 to ease costs:

  1. Fix the Small Business Health Insurance Crisis.  Massachusetts has the second lowest individual premiums, yet the second highest small business premiums in the country.  At the same time large employers pay far less for far better coverage than do small employers.  That is shockingly unacceptable, and is due to discrimination under the law and in the markets. 
  2. Close the Loopholes In The UI System.   Massachusetts is ranked 50th by the Tax Foundation for unemployment insurance systems.  In short, employers and employees alike abuse the system due to an inadequate eligibility system.
  3. Prevent Local Ordinances Affecting Consumer Choices.  Many states by law prevent local ordinances affecting interstate commerce, but MA does not.  So a patchwork on tobacco sales, plastic bag usage, water bottle sales, etc., has emerged across the state due to organized special interest group efforts before 351 cities and towns.  These affect local stores, but unfortunately not the new Internet competition.  For consumer choice and small business competitive reasons, require statewide standards for consumer product sales. 
  4. Pass a Teen Wage.  Thirty-nine states have them.  Let’s make sure 14-17 year olds have the learning and earning opportunities they need, and small businesses have the incentives to hire them.

Small Business Health Premiums Keep Rising More Than Others; RAM Seeks Regulatory Fairness

September 24, 2018  by Jon Hurst, President

Recently, the Massachusetts Center for Health Information and Analysis (CHIA) presented their 2018 Annual Report. The report was widely reported in the press for showing much slower overall growth in healthcare spending: 1.6% vs. the state’s 3.1% benchmark, and recent 4 year average of 3.6% increases. Yet, totally missed by the press and general public was how the increased costs were disparately distributed among a wide variety of consumers. Dissecting how the overall healthcare “pie” is divided is extremely important for small businesses, as important questions remain whether costs are being fairly distributed across all classes of purchasers.

Commercial, fully-insured premiums increased 4.9%, yet within that market, small businesses saw an increase of 6.9%. Subsidized individuals in the Connector saw a 3.0% increase, unsubsidized individuals saw a 3.8% increase, large groups saw a 4.1% increase, and the state Group Insurance Commission (the GIC; the buying group for state & local employees) saw a 4.4% increase. Meanwhile the state’s Medicaid program saw a drop of -0.2%.

But just looking at the disturbing and unequal premium trends isn’t enough, you also need to look at cost sharing and high deductible plans as you compare the fairness of the markets. Besides seeing a far higher than average premium increase than individuals and large groups, small businesses and their employees saw a greater increase in cost sharing and high deductible plan growth than other market sectors. While 28.2% of the commercial market are now in high deductible plans, 57.5% of small businesses are in that cost sharing space, while the state’s taxpayer funded GIC is at 0%.

Read More


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.     

Read More

Changes Coming: Internet Sales Tax, $15, Paid Leave, Sunday Pay Repeal - Why We Took The 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. 

Read More

Beacon Hill Ballot Question Negotiations Underway With Tight Deadlines

May 29, 2018 by Jon Hurst, President

As RAM members know, your association has been working for almost a year to qualify a ballot initiative to roll back the sales tax to the 5% rate last seen in 2009. The measure also authorizes an annual two day sales tax holiday.
Sufficient signatures have been obtained to file with the Secretary of State by the July 3rd deadline to qualify the measure for the November ballot. But important negotiations are underway on Beacon Hill with various ballot measure sponsors in order to achieve middle ground and avoid the questions being placed before the voters. Besides the sales tax question, two payroll mandate proposals are being negotiated: the initiative to raise the minimum wage to $15 over 4 years, and another initiative to create the most costly and extensive paid family and medical leave mandate in the country.
Complicating the negotiations are pending court cases on whether a constitutional amendment to increase the state income tax by 4% for those persons earning $1 Million or more will reach the November ballot. That case is before the MA Supreme Judicial Court. And before the US Supreme Court is the landmark case on whether states can mandate out of state internet sellers to collect the sales tax from local consumers (SD vs Wayfair).
Whether RAM moves forward with the ballot question on the sales tax rollback will be based on a combination of the outcome of those court cases; as well as on the ability of negotiations to produce more reasonable payroll mandate measures; while still giving taxpayers and local small businesses some sales tax relief to incent local consumer spending rather than driving purchases to NH or to Silicon Valley.
In case we do move forward with the sales tax ballot question, investments are being made for a campaign. The 10,792 required voter signatures for the second round of qualification have been obtained and will be held for potential filing. In addition, the Beacon Hill Institute has completed a study which confirms the economic benefits of lowering the sales tax—particularly for lower income consumers and our small businesses—as well as the fact that the tax loss is far less than what opponents might suggest due to increased local investment and jobs.
What links the high and avoidable sales tax and the proposed costly state labor mandates together is that both make it harder for local sellers to attract and retain local consumer spending due to the resulting and obvious higher customer prices.
In the age of the smart phone, we must all adapt. That includes our existing and proposed laws under the purview of our public policy leaders--who are all very quick to say they support small businesses and our Main Streets. To have laws which make local consumer prices far higher than our competitors, whether through a high sales tax or through unaffordable payroll mandates, is simply antiquated, unacceptable and counterproductive state economic policy. In the 21st Century, that fact is certainly crystal clear to anyone that has ever worked to make a payroll, and to attract consumers armed with unlimited spending options.
More than ever, the employer community, labor, and elected officials should all be working together to keep consumer spending--which is 70% of our economy—right here in Massachusetts. The next few weeks will be telling as to whether that cooperation can and will happen.

Real-time sales tax proposal must be rejected

May 1, 2018 By Bill Rennie, RAM Vice President

Many in the business community were pleased to see that painstaking policy work undertaken by Speaker Robert DeLeo and Chairman Jeffrey Sánchez of the House Ways and Means Committee had resulted in the removal of a real-time sales tax provision from an earlier version of the state budget currently being debated in the state house. They propose instead to create a bipartisan and commission to study the feasibility of a monthly estimated sales tax payment structure. This eminently sensible approach allows a thoughtful review of Massachusetts’ sales tax collection system, and removes the need for the immense technological overhaul real-time sales tax would require.

A real-time sales tax system would require retailers in the Commonwealth to remit sales tax from electronic transactions as they occur. The concept has been universally opposed by Massachusetts businesses, with a broad coalition of retailers, banks, payments providers and others, urging policymakers to reject real-time sales tax on the grounds that it is costly, burdensome and doomed to failure.

The case against real-time sales tax is overwhelming. Even if the technology to provide such a system were to exist (and there is little evidence that it does), implementation would require a wholesale reworking of retail technology and software, imposing a huge cost and compliance burden on payments networks, financial institutions, and merchants of all sizes, all while negatively affecting millions of consumer card payments and electronic funds transfers.

Read More

National Report Shows ORC and Return of Stolen Merchandise on the Rise

November 28, 2017   By Ryan Kearney

A report recently released by the National Retail Federation found that organized retail crime (ORC) and return fraud continue to be on the rise across the country. This troubling news for the retail industry and honest consumers came just days after the Massachusetts House of Representatives agreed with the Senate to increase the felony threshold found in a number of the state’s property crimes which are commonly utilized by retailers, law enforcement and prosecutors to curtail such professional criminal behavior. In light of these findings during the holiday shopping season, the Legislature should strongly reconsider finalizing these changes to the felony thresholds.

At the current felony threshold level of $250, Massachusetts retailers already experience significant losses due to theft with an estimated $1 billion in merchandise stolen from their stores annually—a cost ultimately paid for by honest consumers. The majority of these losses are attributed to professional criminals who see theft as a low risk, high reward activity due to weak property crime laws. The proposed increases— $1,500 in the Senate and $1,000 in the House—would further weaken these criminal laws by removing the threat of meaningful criminal penalties from an expanded number of serious theft incidents.

ORC is a wide-spread problem for the retail industry and is growing annually. At 96%, nearly all of the NRF’s survey respondents reported experiencing ORC activity in the past year and 67% reported an increase in such activity over last year. The report also found there to be an increase in return fraud, pointing to the return of stolen merchandise as the most common method of such fraud. At a time when ORC and return of stolen merchandise continue to present significant challenges for retailers of all sizes, Massachusetts is poised to incentivize further growth of such activity by increasing the amount of merchandise an individual may steal before running the risk of facing serious criminal penalties.

While Massachusetts is one of thirty-five states which have adopted criminal laws specifically targeting ORC related activity, our existing larceny, credit card fraud and receipt of stolen property crimes, which are impacted by these legislative proposals, remain the primary tools in the fight against ORC and the theft crimes underlying the most prevalent form of return fraud. The integrity of these laws must be retained to protect our businesses, their workers and all honest consumers.

Read More

Sales Tax Initiative Leveraging Debate on How Government Affects Sales and Operating Costs on Main Street

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.  

Read More

Increasing Felony Threshold For Larceny Represents a Dramatic Raise for Thieves

October 11, 2017  by Ryan Kearney

Massachusetts Senate leadership recently released a criminal justice reform package which seeks an eighty-four percent increase in the felony threshold for the crimes of larceny and credit card fraud—from the current level of $250 up to $1,500. An increase of this size would be detrimental to the ability of retailers, law enforcement and prosecutors to protect against theft and essentially results in dramatic raises and incentives for professional criminals operating in the Commonwealth.

At the current threshold level of $250, Massachusetts retailers already experience significant losses due to theft with an estimated $1 billion in merchandise stolen from their stores annually. The majority of these losses are attributed to professional criminals and repeat offenders who see theft as a low risk, high reward activity due to weak property crime laws. This proposal stands to further weaken these criminal laws by removing the threat of meaningful criminal penalties from an expanded number of theft incidents.

Theft involving retailers is all too often treated as a victimless, minor offense. Yet the cost to retailers is real and is paid for by honest consumers in the form of higher prices. With regard to credit card fraud, this includes sharing in costs associated with data security and recovering from a stolen identity. In addition, retail theft incidents are becoming increasingly more violent according to a study conducted by the National Retail Federation—ranging from verbal assault of store clerks to assault and battery during apprehensions. The presence of any type of violence in our stores also places the general public at risk. Lastly, proceeds from organized retail theft have been found to fund serious criminal activities including drug trafficking, arms dealing and even terrorism.

Read More

Moving Ahead on Sales Tax Ballot Question

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.

Read More


May 17, 2017  By Jon Hurst

As the fiscal year 2018 state budget gets closer to implementation on July 1, it is becoming clearer that employers will be asked in some way to help fund a state Medicaid budget gap.  The MassHealth budget has exploded under a combination of ACA related costs, mixed up consumer incentives, and a lack of provider expense control.  And until the state can institute some guardrails, and move some over to more appropriate and affordable options, it appears that employers will be asked to fund some of the increased costs over a two year period. 

Important discussions on the economic impact to small businesses have lowered the dollar ask and have allowed for discussions of better taxing plans, but still absent from the negotiations is skin in the game from the providers themselves.  A proposal to cap commercial rate increases for the big, high cost providers was lost in the flood of unparalleled political power by “non-profit,” non-taxpaying healthcare providers.   They aren’t shy about asking for more money from consumers, employers and taxpayers, but ask them to pay taxes or reduce their expenses, and they pull out all the stops to deflect the conversation.

Some of these providers are among the largest employers in the state, are far wealthier than most “for profit” employers, yet due to their tax status, they pay no corporate income tax, no commercial property taxes, and incredibly, no sales tax.  With their direct tax avoidance they force the rest of us to pay more in taxes.  More taxes, on top of uncontrolled, escalating health insurance premiums.    

Furthermore, they are arguably given by government an unfair advantage under those tax laws compared to their for profit competitors.  Taxes are supposed to not only fund important government services like healthcare, but also create fair playing fields, and incentives to do the right thing.  Truly there is nothing like paying taxes to force you to closely examine your expenses and behavior.  And ideally the tax system should be set up to make sure everyone is treated fairly and equally by government. 

Read More

Smart Tax Policy Protects the Home Team

April 28, 2017 by Jon Hurst

"Don’t tax you, don’t tax me, tax the fellow behind the tree;” so said former Louisiana Senator Russell B. Long when describing “tax reform.”  This is a pretty clear description of the political process behind tax debates at the state and federal levels.  And this message is worth keeping in mind as we face major tax changes and debates over the next year on Capitol Hill concerning the Border Adjustment Tax; and on Beacon Hill and the state ballot on the so-called Millionaires Tax.

There is no better example of Senator Long’s “behind the tree” saying than the sales tax.  Big business prefers to have consumers pay more rather than them, and big non-profits like healthcare providers don’t care where the tax dollars come from, so long as they are exempt from taxes and they keep getting increased taxpayer support for their growing bottom lines. 

Always the most regressive tax on the books, the sales tax has also been a sticky political and economic issue for Massachusetts because of our common border with New Hampshire.  Consumers of means have always been able to avoid it since they had the transportation options to take the drive north.  The billions of dollars which regularly leave the state due to consumer taxing incentives to invest elsewhere is obvious with the commercial development, the retail jobs, and the multitude of Massachusetts license plates in shopping districts north of the border. 

Read More

Voter's Views on Sales Tax Provide Food for Thought

By Jon Hurst, President 

The Retailers Association of Massachusetts recently conducted public opinion polls by Princeton Research Associates to determine the views of voters and consumers in the Commonwealth about the state sales tax and about the fairness alternatives.  The results are interesting.  Following are the highlights.

  • 95% of the voters view the retail sector as important for our economy. 
  • 52% opposed sales tax collections on Internet sales, a view which would seem to be in conflict with the first bullet.
  • Yet, a wide shift occurred when asked if they would support the sales tax on Internet sales IF it boosted local, small retailers, was coupled with a reduction in the tax rate from 6.25 to 5% or lower, and didn’t mean an overall loss in state revenues--61% then supported online tax collections.
  • 60% also supporting a broadening of the sales tax to items like soda, if it was coupled with a sales tax rate cut.
  • After having no Sales Tax Holiday in 2016, a whopping 79% said they strongly supported authorizing a MA Sales Tax Holiday.
  • 56% supported applying the sales tax to nonprofits like universities and foundations if accompanied by a tax cut for consumers.
  •  Given the upcoming “Millionaires Tax” vote, a very strong 79% said they supported a reduction in the sales tax to about 4%-4.5% to make the tax system fairer and to support local retailers.
  • Given that nationally 18% of all holiday gift purchases this past year were made online—and many of those internet sellers do not collect the sales tax—83% said it was important to lower the 6.25% sales tax to help local retail shops.
  • 78% of the respondents said it was important to provide some kind of sales tax relief soon.
  • And finally 66% of the voters believe the proper sales tax range for Massachusetts would be in the 4% to 4.5% range.

Food for thought for our industry, our voters, consumers, and for Beacon Hill. 

The poll numbers are from two surveys; one conducted 11/11-14/16, N=495, +/- 4.4%; and the other 3/14-19/17, N=550, +/-4.4%

The False Promise of “Real Time” Sales Tax Remittance

March 20, 2017 by Bill Rennie

Much has been said and written about Governor Baker’s $300 million employer Medicaid tax proposal, which when fully annualized over the course of the year projects out to more than a $600 million tax increase on employers, and rightly so, as that is a big number.  Less attention has been paid to another proposal in the budget that is also meant to generate significant revenue from employers by adopting what the Governor describes as a “Sales Tax Modernization Timing Change,” more commonly referred to as “real-time” sales tax collection.  The Administration counts on this change to bring in $125 million in the next fiscal year – another big number.  However, like the proposed Medicaid tax, the “real-time” proposal is flawed.

This sales tax timing change, included in Section 34 of the Governor’s FY18 budget, would require third party payment processors to collect and remit sales tax from retailers in real time, on all third party credit and debit card purchases.  Currently, retailers collect and remit all sales tax to the state, and they are responsible for the accuracy, reconciliation and auditing of their payments and accounts.  That process would continue under this proposal for all purchases made not using a third party credit or debit card, such as purchases made using cash, gift cards, checks, store brand cards, and split tender transactions. 

However, a second payment system would need to be built to accommodate the state’s “real-time” collection and remittance process.  Retailers, credit card companies, processors and even the state Department of Revenue would incur millions of dollars in new expenses to build out and maintain this new system – costs that would be passed onto consumers and taxpayers.  For what?  No “new” revenue is generated.  You’re just grabbing sales tax a month early, in what amounts to be a one month’s advance in your allowance.  How?   The Administration proposes for this section to take effect on June 1, 2018 – one month prior to the end of the FY18 fiscal year.  In doing so, the state would grab the sales tax due in July one month earlier, moving the funds from FY19 back into FY18.  It’s a budget gimmick that only works once, because then you’d be on a forward schedule – but you’d also have created yourself a new hole in the FY19 budget.  

Read More