Question 3: Sales and Use Tax Rates
How reducing the sales tax from 6.25% to 3% would affect Westwood's local aid.
Somewhat related to Question 1, Question 3 has arguably drawn more attention than the other questions on the November 2 ballot. The question asks voters whether they want to repeal the state sales tax from 6.25 percent to 3 percent.
The sales tax was increased last year from 5 to 6.25 percent. If Question 3 is approved, the rollback would go into effect on January 1, 2011.
If the revenue produced by a 3 percent sales tax wouldn't bring in enough money to meet the state's requirements to meet any laws or bonds required to be paid by sales tax moment, then the sales tax would be lowered "to the lowest level allowed by the law."
The Alliance to Roll Back Taxes has said that the rollback would put $688 back into the pockets of every resident in the state each year, and create 32,929 jobs. If approved, this would also help businesses along the border near New Hampshire, which has no sales tax, and attract shoppers from other neighboring states with a higher sales tax.
The Massachusetts Coalition for Our Communication, however, has said that the sales tax revenue helps pay for school teachers, police officers and firefighters, and helps pay for road and bridge repairs, as well as provide health care.
"This I think would more affect cities and towns, because they're not going to be taking in that extra revenue from taxes," said Westwood Town Clerk Dottie Powers. "We rely on local aid to pay for school services and public safety, and emergency services, just to be able to run the town at a standard that the residents are accustomed to."
A decrease in the state sales tax revenue would force the state to cut local aid to communities, according to the Coalition, as state revenue would drop by $2.5 million. To see an estimate of how much Westwood could lose if Question 3 is approved, click here.
On the flip side, those residents in Westwood suffering from financial difficulty as a result of the poor economic climate could benefit from a lower sales tax.
"It's a tough time, too," Powers said. "A lot of people are out of work, so you have people that may not make a purchase because of the extra sales tax, and just because of their finances. On that end, it's going to help some people. But on the other hand, it's going to hurt other people if local aid is cut."
Here is the exact wording of Question 3 as it appears on the November 2 ballot:
This proposed law would reduce the state sales and use tax rates (which were 6.25% as of September 2009) to 3% as of January 1, 2011. It would make the same reduction in the rate used to determine the amount to be deposited with the state Commissioner of Revenue by non-resident building contractors as security for the payment of sales and use tax on tangible personal property used in carrying out their contracts.
The proposed law provides that if the 3% rates would not produce enough revenues to satisfy any lawful pledge of sales and use tax revenues in connection with any bond, note, or other contractual obligation, then the rates would instead be reduced to the lowest level allowed by law.
The proposed law would not affect the collection of moneys due the Commonwealth for sales, storage, use or other consumption of tangible personal property or services occurring before January 1, 2011.
The proposed law states that if any of its parts were declared invalid, the other parts would stay in effect.
What Your Vote Will Do:
- A YES VOTE would reduce the state sales and use tax rates to 3%.
- A NO VOTE would make no change in the state sales and use tax rates.