Some States Not Allowed to Advertise Tax Holidays

August 18, 2009

This year, retailers in Massachusetts received word that they are not allowed to advertise any of their typical “tax free” holidays. The state’s Department of Revenue has said that it will not conduct mall-to-mall searches to find those stores, which break the law, but if it receives word of a retailer that is advertising a tax-free sale, then the Department will speak with the owner or manager.

The interesting part of the law is that tax-free holidays are not, in themselves, banned. If a retailer wishes to pay for its customers’ sales taxes, then it may do so. However, because government officials believed that this gave the large retail stores a greater advantage over small businesses; they outlawed the advertisement of such sales.

A large corporation, with a great deal of assets, is able to foot the bill for its customers’ taxes, whereas a small business might not be able to afford such a sale. For this reason, they are put at an unfair advantage.

Massachusetts is one of many states with such a regulation. Retailers are urged to do their research before advertising.