MA hikes sales tax, taxes booze

BOSTON, Mass. (WPRI) - Massachusetts' governor signed a new state budget Monday afternoon that includes a 25% sales tax increase -- and no hike on Mass Turnpike tolls. But the hike could also affect business on both sides of the RI-Mass border.

Governor Deval Patrick signed the budget shortly after 4:00 p.m., giving the state $27 billion to spend in the fiscal year that begins July 1. The budget preserves most of the state's education spending, but brings major cuts to other state services.

As of Wednesday, the sales tax jumps from 5% to 6.25%. The sales tax hike is the Bay State's biggest broad based tax hike in twenty years.

The measure also expands the sales tax to liquor. The changes go into effect August 1.

Liquor stores in Seekonk -- like Gasbarro's -- sitting right on the border are the perfect location for Rhode Islanders looking to buy alcohol tax free. Shoppers from both Rhode Island and Massachusetts seem to accept the sales tax hike as a consequence of a bad economy.

"What are you going to do with the economy? It happens," said Massachusetts shopper Ann Marshall.

"I don't think the difference is going to be that significant, that it would change my habits," said Massachusetts shopper John Petell. "I buy almost as much here as I do in Rhode Island."

Still, even though they'll be paying more in Mass., shopping there is a bargain, they say.

"Sales tax is a big issue for me. I'm here today to get a bargain," said Sidney Shaw.

The Mass State Senate says the sales tax hike will generate $633 million.

But for Rhode Islanders, who have a 7% sales tax, paying 6.25% just across the border isn't so bad.

"It's still cheaper than Rhode Island. Yes, it is," said Shaw. "And a bargain is a bargain no matter where you go."