Businesses in Berkshires gear up for high-traffic tax-free weekend
LENOX — Chris Calvert is noticing an uptick in window-shopping this week — a likely sign this tax-free weekend will be a busy one at Arcadian Shop.
The outdoor equipment retailer has seen this pattern when the state has declared a tax-free "holiday" in the past.
"People come in, walk around the shop," Calvert, a store manager, said Wednesday morning. "They're getting ready for the big push."
Saturday and Sunday, Massachusetts will not collect the usual 6.25 percent sales tax on most items less than $2,500. That means the purchase of an item valued at $2,500 will save consumers from paying about $156 in sales tax. The tax-free holiday is intended to boost the economy with a burst of spending.
Calvert said the shop does well during the tax-free holidays; traffic rivals Arcadian Shop's biggest sale of the year. People usually come to the store to purchase a big-ticket item and then do a little extra shopping while there, he said. The shop on Pittsfield Road (Route 7/20) sells a lot of bicycles, kayaks and paddleboards on tax holidays.
Another benefit of tax-free weekends, Calvert said, is that the shop doesn't have to advertise the sale.
"We market for our sale, but we don't have to do any marketing for the tax-free weekend," he said. "Everyone already knows."
In the Berkshires, retailers are preparing for the high-traffic weekend, promoting additional sales and organizing inventory. Colleen Henry, executive director of the Lee Chamber of Commerce, said tax-free weekends are particularly useful to local, independent shops.
"Support your local stores, support your local community — that's a big draw for people to shop in Lee," Henry said.
The annual appearance of a summertime sales-tax holiday was solidified last year in the "Grand Bargain," a bill that set standards for minimum wage, paid family medical leave and the tax-free weekend.
While the tax-free holiday saves consumers money, the lost tax revenue impacts state services. The Department of Revenue estimated that the state didn't collect $16.7 million to $37.7 million in taxes over the 2018 tax-free weekend.
For example, Department of Revenue Commissioner Christopher Harding told State House News Service that the Massachusetts Bay Transportation Authority and School Modernization and Reconstruction Trust Fund each missed out on about $4.3 million in potential funding in 2018. The Federal Reserve did a study in 2017 that found that sales tax-free weekends didn't spur more shopping; they just concentrated into a single weekend the same number of sales a retailer would experience over five weeks.
Still, the holiday is promoted as a boon to small businesses and area retailers, and chambers of commerce are excited for the spike in business.
Henry noted that the tax-free weekend doesn't just benefit the stores that make sales, it also boosts restaurant visits, and exposes shoppers to new retailers and communities.
"Once people are out shopping for school things or stoves or dishwashers, whatever — then they wander around the streets and see a nice restaurant or a new place," she said. "I do think it gets people to go out."
Cheryl Mirer, executive director of Downtown Pittsfield Inc., said the holiday weekend is a benefit to the community and it might be worth getting city retailers together for a concerted marketing effort in 2020.
"It would be a really good thing for us to aim for next year," she said.
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