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May 29, 2009 Jay Finegan, 287-1445
Sales Tax Holiday Bill Prevails in House
Rep. Strang Burgess’ Bill Would Allow Tax-free Weekend in the Fall

AUGUSTA – The Maine House today voted 81-65 to create a tax holiday over the Columbus Day weekend, in an initial show of support for a pilot project. To become law, the bill still must survive a legislative gauntlet that includes additional votes in the House, votes in the Senate and action in the Appropriations Committee, which will examine the fiscal impact on state revenues. Finally, Governor Baldacci must sign the bill into law.

“The message to everyone who wants a tax holiday is to call your state senator,” said Rep. Meredith Strang Burgess, who sponsored the legislation. “Tell them this is a great opportunity to keep our retail dollars in Maine. It’s a chance to jump-start the Maine economy and help out our retail sector, which has been hit hard by the recession.”

The House vote today signaled strong support for the bill. All Republicans and 25 Democrats voted for the measure which would establish the first-ever tax holiday in Maine. Massachusetts has had a tax holiday since 2004. Vermont joined in last year. Since 1996, when New York established the first tax holiday, more than a dozen states have followed suit, often to help parents buy back-to-school clothing for their children or help homeowners buy energy-saving products for the winter.

Rep. Strang Burgess (R-Cumberland) spoke on the House floor before the vote and said afterward that she was delighted by the result. “Similar legislation has been proposed before but died in committee,” she said. “I’m very encouraged.”

The original bill, LD 1148, would have set two sales-tax free weekends in Maine every year, with the dates determined by the Bureau of Revenue Services and the Maine Merchants Association and approved by the Joint Standing Committee on Taxation. Legislators on the Taxation panel trimmed the proposal down to a one-time pilot project to take place over the long Columbus Day weekend, which falls this year on October 10, 11 and 12.

Rep. Strang Burgess said the Columbus Day weekend is an optimum time for the first tax holiday. “It would give retailers a strong flurry of business at the outset of the holiday shopping season,” she said. “I believe a sales tax holiday would be good for consumers, good for retailers and good for our overall morale.”

Rep. Strang Burgess added that a Columbus Day tax holiday also would attract a lot of Canadians to travel to Maine. “The holiday would coincide with the Canadian Thanksgiving weekend; and with the sales tax rate in New Brunswick at 11 percent, I think we’d gain a lot of business,” she said.

“We know the idea is wildly popular with consumers and merchants,” she added. “It is especially favored by southern Maine merchants, who have to compete with sales tax-free New Hampshire. This is all about stimulating the Maine economy, saving retail jobs and providing instant savings for Mainers at a time when every penny helps.”

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