Massachusetts retailers, who say they’re getting squeezed by unfair online competition as well as state regulations that put them at a disadvantage, may be able to look ahead from some relief in the form of a Senate task force being formed to strengthen their sector.
Massachusetts Senate President Stan Rosenberg, D-Amherst, and Senate Minority Leader Bruce Tarr, R-Gloucester, announced the formation of a Senate Task Force on Strengthening Massachusetts Local Retail.
“Through this effort the Senate hopes to find ways to help them compete effectively in this ever-changing economy,” said Senate President Stan Rosenberg in announcing the task force this week with Senate Minority Leader Bruce Tarr.
The panel, charged with reporting back to the Senate this coming May, will look at key issues, including challenges that retailers face in competing against e-commerce, the impact of store closures on local economies and property tax bases, retailers’ own initiatives to increase market share, and how state and local governments can encourage local shopping.
The Legislature has worked with the financial, technology and other sectors of the economy but so far hasn’t focused this kind of effort to identify ways it can help retailers, he said.
“It’s time to put some focused intention in the retail sector,” after hearing calls for reviving the state’s annual sales tax holiday, cutting the sales tax and finding ways to force online sites to charge tax, said the Amherst Democrat.
“We know that retailers are under a lot of pressures because there’s less discretionary income and prices are not rising in the marketplace, and there’s extraordinarily unfair e-commerce competition,” Rosenberg added. The hope is to work with the Retailers Association of Massachusetts (RAM) — which will be represented on the 13-member task force, along with five large and small retailers from around the state, along with seven Senate members — to look at “a range of issues.”
Rosenberg said, “There’s more pressures coming,” in the form of ballot questions he expects in 2018 on whether to allow paid family and medical leave as well as to require raising the state’s minimum wage to $15 an hour, as backed by the Raise Up Massachusetts coalition, which Rosenberg predicted could “add two more points of pressure” on retailers.
RAM President Jon Hurst, who said his organization is weighing whether to submit a petition before an Aug. 2 deadline calling for a ballot question to lower the sales tax, claimed the 4,000-member group’s concerns hasn’t met with “a whole lot of sympathy either from legislators or consumers,” and that he’s pleased to know there will be an open discussion of the problems.”
He added that he wants to “raise the visibility of the importance of retail jobs and of keeping at least some measures of consumer dollars in our economy. … It isn’t just about (competition from tax-free) New Hampshire anymore.”
Hurst called for government to be “far more careful on state policy, which discriminates against the local employer and makes their products and services more expensive.”
Tax-free online sales has been growing “exponentially,” he added, “and this is now going to be the second year in a row that we can’t even have a lousy day for a sales-tax holiday” to compete with a 365-day-a-year, tax free online retailers.
For example, only Massachusetts and Rhode Island require retailers to pay time-and-a-half on Sundays and holidays, Hurst said. “That’s clearly discrimination under the law,” amounting to a $16.50 minimum wage on Sundays and six holidays.
“It’s tough enough when you’re competing with sellers all over the world and our consumers never have to leave their living room to buy something and have it delivered to their front doorstep within hours, tax free and freight free, Hurst said. “But then to have mandates requiring you to spend a lot more to employ people than competitors on the smart phone have to do, that’s deadly to countless small businesses on Main Streets and the retail sector in the commonwealth.”
Each 1 percent of sales tax represents about $1 billion in revenue, according to an aide to Rosenberg.
The Senate president said an attempt by the state to collect sales tax from online retailers on the basis of the information-collecting “cookies” that they deposit in customers’ computers is being challenged in the courts, but that as giant retailers like Amazon build distribution centers in Massachusetts, the state can begin to collect sales tax from them, in accordance with federal law.