Advocacy Action Center



Gov. Baker Again Proposes “Real Time” Sales Tax Collection. Contact Governor & Legislators & Tell Them it’s a BAD IDEA!

For the fourth year in a row, Governor Charlie Baker has proposed changes to the state’s sales and meals tax collection and remittance process.  The proposal this year again includes “Real Time” or daily remittance, requiring third party processors of credit and debit card transactions to remit, on a daily basis, the sales tax on behalf of the retailer, starting in 2023. 
 
This is a risky, costly, and bad idea and we’re getting tired of having to repeatedly explain why.  But the Legislature has listened to us over the years and rejected these proposals before.  Hearing your concerns, they’ll reject it again.  
 
Every business in the state that collects sales, meals, local option meals, room occupancy, and even the new marijuana taxes, that annually remits more than $100,000 in taxes will be required to completely overhaul and upgrade payment processing software and hardware under the new proposal. 
 
Retailers, card companies, banks and processors would incur over a billion dollars in new expenses to build out and reprogram a new system – costs that would be passed onto consumers – in a process that, if even possible at all, would take years to implement.  “Real Time” or daily sales tax collection is an untested theory, a collection idea that does not exist in practice in any form, in any state or municipality in the country. 
 
No “new” revenue will be generated.  This would not create a single new sale.  Only the remittance timing will change on sales tax that would have been collected and remitted anyway.   
 
And who will pay the new interchange fees that will go with it?  What about returns?  Why create a second, more complicated process for card transactions when we’ll still have to collect and remit on cash, check and gift card sales the same way we do today?
 
What a nightmare.  Contact your Legislators TODAY and tell them just that.
 
Also, in the short term, the Governor is seeking changes to require a “preliminary remittance,” or a prepayment, of tax mid-month, for vendors who annually remit in excess of $100,000 in sales tax, meals tax, etc.
 
What is or when is that “preliminary remittance of tax” due?  We don’t know, because the budget proposal doesn’t tell us – we just have to trust the DOR.
 
RAM is opposed to making any changes in the current sales tax remittance process.  The pursuit of “Real Time” or daily remittance would be devastatingly costly and burdensome for all retailers and restauranteurs.  This cannot happen.
 
The prepayment proposal may not be as costly and damaging as “Real Time,” but if they do wish to explore it, it should be limited to exempt small to mid-sized companies – starting at a threshold of $1 million in annual tax liability.
 
A threshold of $100,000 is simply too low.  All retailers and restaurants with more than $1.6 million in taxable sales would be impacted.  Those are small businesses – raise it to $1 million – or don’t do it at all.  It’s a budget gimmick that brings in some sales tax three weeks earlier that the state is going to get anyway.
 
Remind your reps and senators of the recent pressures of soaring rents, high health insurance costs, the EMAC tax, the increasing minimum wage, the Paid Sick mandate and the new Paid Family and Medical Leave Law…..we don’t need another burden, and some stability would be nice for a change.
 
Take Action today!
 
The Governor’s budget is now before the House, which will release and debate its own version in mid-April.  All members are encouraged to contact your legislators and urge them to reject the Governor’s proposed changes to the state’s sales and meals tax remittance process.
 

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