Rhode Island is stuck and it is becoming harder to retain our resident tax base, let alone maintain and grow programs and services in our stagnant economy. It is time for the .5% sales tax cut that was promised by our legislators in 2011 to be enacted.
A ruling last year by the Supreme Court in South Dakota v Wayfair allowing states to impose Internet taxes, and the broadening of the line item in the Rhode Island sales tax to include Internet, remote seller and other products and services, has effectively triggered the retrofit as intended in the original legislation. I have submitted House Bill 5854, along with my colleagues Minority Leader Blake Filippi and Representative Sherry Roberts, to clarify the language intended in the legislation and spur this much needed relief in our FY20 budget.
Maintaining the highest sales tax in New England at 7% affects moderate to low-income Rhode Islanders more than their wealthier neighbors because they spend most of their income on providing for their families. Republicans want to lower taxes for families who are struggling to afford their groceries and clothes for their growing children. Republicans want to lower taxes so more families can spend their hard earned income on “non-essentials” –those items that add to their family’s quality of life-- like a day at the zoo, an evening at a sports event, or a theater experience. A lower sales tax can only help expand retail sales, retail employment, retail brick and mortar storefronts and more spending in the community. We should be promoting growth in retail spaces verses boarding these businesses up and watching them move out.
Let’s drop our tax rate to more effectively compete with our neighbors. Even with the .5% reduction we will still have the highest sales tax rates in New England (Massachusetts 6.25%, Connecticut 6.35%, Maine 5.5%, Vermont 6%, New York 4% and New Hampshire with no sales tax.) When we codify the intended rate reduction in H5854, we are truly representing the best interests of our constituents and promoting trade in the Ocean State.
This is good government. This is good policy. This is keeping a promise to those who elected us to represent them.