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Shoppers pant when tax takes a breather

5% break seems like a prize in state that dates its frugality to the fury of Boston Tea Party

A storefront window at Downtown Crossing advertises two days of largely tax-free shopping in Massachusetts. Many merchants will be open from 6 a.m. to midnight today and tomorrow.
A storefront window at Downtown Crossing advertises two days of largely tax-free shopping in Massachusetts. Many merchants will be open from 6 a.m. to midnight today and tomorrow. (Globe Staff Photo / Michelle McDonald)

Amy Ricketson has already picked out the $600 worth of mattress, bedspread, and sheets she plans to buy during this weekend's sales tax holiday. Her savings: $30.

''OK, it's not much," said Ricketson of Plymouth. ''But I'd rather keep it than give it as taxes, thanks!"

A 5 percent discount is hardly a bargain by retailing standards (try 50 percent off), but call it a tax holiday and the promotion becomes a door buster. Why else? Here in the Commonwealth, where the nation's first tax protests were waged in 1773 with the Boston Tea Party, residents just want to stick it to Taxachusetts.

Antitax fervor can be a unifying force that makes skirting 5 percent in taxes seem like an act of civil disobedience. Massachusetts citizens pay about $4,608 annually in state and local taxes, the fourth highest in the nation, for everything from alcohol to property to stock profits. The average American pays about $1,000 less, according to the Tax Foundation, a nonpartisan group in Washington, D.C.

Tack on federal taxes found on phone bills, gasoline, and airline tickets, and it's easy to see why people are rebelling with their MasterCards and Visas.

''Massachusetts residents in particular seem to jump at a chance to throw more tea in the water," said Kate MacKinnon, a spokeswoman for Tweeter Home Entertainment Group Inc., a high-end electronics chain. ''If we ran a 5 percent-off sale, we would not get even close to the response that we anticipate the state's sales tax holiday to draw."

Sales tax holidays have proved a catalyst to shopping, generating customer traffic in the dog days of summer that has been compared to the Christmas season. Merchants are making a big push today and tomorrow with major chains and retailers, including Apple, keeping stores open from 6 a.m. to midnight, and small business owners, such as Yolanda Enterprises in Waltham, marking down all wedding attire to below $2,500 so that they qualify for the sales tax exemption.

Ten other states, as well as Washington, D.C., and Montgomery, Ala., have sales tax holidays, but they tend to target specific products, such as school supplies and clothes, according to Taxware, L.P., a Salem sales tax software firm. Massachusetts is the most generous, applying to almost anything under $2,500, except for motor vehicles, motor boats, meals, tobacco products, and utilities.

Last year Massachusetts consumers spent just over $200 million during a one-day tax holiday while saving some $10.1 million in sales taxes, according to the state Department of Revenue. The agency estimates that consumers this year will save an estimated $14.5 million in sales taxes over two days of tax-free shopping.

Some shoppers have put off purchases for weeks of everything from refrigerators to TVs. Others have less firm plans except to buy something, anything just for the thrill of avoiding another tax.

Barbara Anderson, executive director of Citizens for Limited Taxation, a Marblehead tax reform group, doesn't think that the tax holiday is a significant reprieve but has a shopping list ready: toothpaste, paper towels, and a dust buster. ''You grab what you can when you can," Anderson said.

Economists say tax holidays tend to have little if any long-term economic effects, since consumers shift their purchases to coincide with the tax holidays rather than buy more. A study of New York's 1997 tax holiday on clothing, for example, showed that sales surged more than 70 percent during the seven tax-free days, but over three months they were only slightly higher than the same period the year before.

And for some who've done the math on actual savings, the tax holiday isn't worth the hassle.

''People think they're getting away with something this weekend," said Linda Morris, of Quincy, who plans to wait for bigger, better sales. ''But they're really not."

Jenn Abelson can be reached at abelson@globe.com, Robert Gavin at rgavin@globe.com.

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