Apr 29, 2009

Sales tax increase supporters see budget salveBy Jake BerryCapeCodOnline.com

To some Cape Cod business owners, a proposal to increase the state sales tax is a simple matter of dollars and sense.

The 1.25-percent sales tax hike, proposed this week on Beacon Hill, isn’t likely to cost local businesses either in customers or income should it become law, several business owners said this week. If enacted, the proposed tax increase, approved Monday in the state House of Representatives, wouldn’t be enough to chase away customers, business owners said, and it could help save the business community from harsher tax increases that could prove more costly.

If approved, the proposed increase would raise Massachusetts’ sales tax to 6.25 percent.

At Red Fish Blue Fish, a gift and jewelry shop in Hyannis, the hike would mean an extra 38 cents in sales taxes for a $30 pair of hand blown earrings. At Cape Cod Collectibles, a gift shop in Harwich Port, the tax hike would add about 15 cents in sales taxes to a $12 beaded necklace.

“That’s not the kind of (money) that’s going to keep a lot of people from shopping,” said Janet Driscoll, owner of Cape Cod Collectibles. “People are going to shop when they come here to the Cape. … Realistically, when you look at it, its not going to make a huge difference.”

The proposed increase, which passed the state House on a 108-51 vote, could add as much as $900 million to state coffers, with about $200 million returned to municipalities to offset cuts to local aid, supporters of the plan have said.

Gov. Deval Patrick vowed Monday to veto the proposal, should it pass the state Senate and reach his desk, though the House appears to have enough votes to override the governor’s veto.

Read complete article.