It's 6.25% off, not 'buy one get one free'
No retailer would bother putting up a sign that read “WEEKEND SALE: 6.25% off.”
That’s because few shoppers would be moved to buy based on such a miserly price reduction. In fact, they would be more inclined to snicker … or shop elsewhere.
So why all the excitement – year after year – about a “sales tax holiday,” such as the one occurring here in Massachusetts this weekend? The “deal” is that the state’s 6.25% sales tax will be waived on items that cost less than $2,500, excluding cars, motorcycles and tobacco.
Avoiding a 6.25% sales tax on a $2,500 purchase saves $156.25.
Yes, $156.25 is real money. And some stores are claiming to offer their own price reductions on top of the sales tax incentive (in fact, a piece of spam from Sears touting such a scheme hit my inbox not five minutes ago).
I don’t believe these additional “sales” are really sales. But I do believe that retailers recognize a good thing when they see one and what they see here is a buying public that can be mobilized for 6.5% that isn’t going into the retailers’ cash drawers in any case.
The suspension of the sales tax for two days is expected to cost Massachusetts $20.5 million in lost revenue.
That’s real money, too.
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