Amendment ID: S1974-4

Amendment 4

Gradual Sales Tax Reduction

Mr. Tarr moves to amend the bill Moves to amend by inserting the following new section:-

SECTION_: Section 2 of Chapter 64H as appearing in the 2014 Official Edition is hereby amended by striking the section out in its entirety and inserting in place thereof the following:-

Section 2. (a) An excise is hereby imposed upon sales at retail in the commonwealth, by any vendor, of tangible personal property or of services performed in the commonwealth at the rate of 6.25 per cent of the gross receipts of the vendor from all such sales of such property or services, except as otherwise provided in this chapter. The excise shall be paid by the vendor to the commissioner at the time provided for filing the return required by section sixteen of chapter sixty-two C beginning on or after August 1, 2009 provided that in subsequent years the rate shall be set by the formula established in clause (b).

(b) The excise by any vendor, of tangible personal property or of services performed in the commonwealth shall be taxed at the lesser of: (i) the rate in effect for the prior taxable year minus.25 per cent if the inflation adjusted growth in baseline taxes in the fiscal year ending the June 30 of the previous year exceeds 2.5 per cent and the inflation-adjusted change in baseline taxes for each consecutive 3 month period reported by the commissioner between August and December of the previous year is greater than 0; or (ii) the rate in effect for the prior year, provided that the rate shall not exceed 6.25 per cent or decrease beyond 5 per cent. On or before October 15 of each year, the commissioner shall submit a report to the secretary of administration, the house and senate committees on ways and means and the joint committee on taxation providing a preliminary statement of the sales tax rate for taxable years beginning on or after the following January 1. On or before December 15, the commissioner shall make a final statement of the sales tax rate for the following year to the same recipients.