BOSTON – State Sen. John C. Velis (D-Westfield) announced April 26 that two bills he filed related to small businesses and economic relief have been referred to legislative committees. Velis stated that these bills came about through conversations with small business owners and the Retailers Association of Massachusetts.
S.247, An Act to promote economic recovery for restaurants and bars was referred to the Joint Committee on Consumer Protection and Professional Licensure.
During the COVID-19 pandemic, restaurants and bars that are licensed to sell beer and wine on premise have also been able to sell these beverages as take-out. Many establishments have benefitted from this flexibility, which has allowed them to bring in additional income with take-out. This bill would make this ability permanent past the end of the COVID-19 pandemic.
S.2005, An Act to establish a vendor’s collection allowance was referred to the Joint Committee on Revenue. The bill would create a vendor’s collection allowance in the Commonwealth, capped at $750 per vendor, to compensate for the costs associated with sales tax. This would include all vendors collecting sales tax, including restaurants. The bill would not diminish the amount of taxes going to municipalities through the local options meals tax.
Twenty-four of the 45 sales tax states have vendor collection allowances, typically an amount equal to about 2% of the sales tax collected up to an annual dollar cap. Whether small business owners do the accounting themselves, hire a CPA to handle the monthly burden, or subscribe to a software program that eases the red tape, there is clearly a cost, and this legislation will help small businesses cover some of the costs of their monthly service to the Commonwealth.
“For more than a half a century the Commonwealth of Massachusetts has been in the minority of 45 sales tax states by not compensating small stores and restaurants for their work to collect, account for, and remit to the state billions of annual sales taxes,” said Jon Hurst, president of the Retailers Association of Massachusetts. “This legislation will provide a small amount of compensation to our small businesses to keep their software up to date and make the monthly remittance to the state.”
“This pandemic has hurt so many small businesses, restaurants, and bars. The financial impact has been felt all over and it is critical that we are helping the local establishments in our communities who have struggled,” said Velis. “These bills provide businesses with an option to retain additional revenue and properly compensate them for costs associated with the state sales tax. As we continue our economic recovery, we must focus on helping the small businesses we all love.”