Legislation Pulls the Trigger on Sales Tax Cut to 6.5%

Bill Re-Defines Trigger to Statutorily Cut the State Sales Tax Already Pulled??

Providence, RI — Suffering from a slate of retail store closings and far fewer in-state jobs than the government once estimated, Rhode Island could get an economic boost from legislation that creates an ‘already-pulled’ new trigger to reduce the state sales tax. The bill was submitted by freshman Representative George Nardone (R, Coventry) one week after the Rhode Island Center for Freedom & Prosperity issued a policy brief calling for the state to comply with The Half-Percent Promise, its own statutory requirement to lower the state sales tax to 6.5% from its current level of 7.0%. 

To create the new trigger, the legislation (H5854) simply adds three words to existing state law (General Law 44-18-18) that mandates a cu to the sales tax rate, to read “upon passage of any federal law or court decision that authorizes states to require remote sellers to collect and remit sales and use taxes …”

“The newly defined trigger in this bill has clearly been met via a 2018 US Supreme Court decision,” said Mike Stenhouse, CEO for the Center. “However, this legislation should not even be necessary, as both the Governor and the Speaker were already given the authority in by the General Assembly 2014 to fulfill the government’s promise to the people. They can comply with state law simply by inserting the reduced sales tax rate into one of their budget lines.”

To create the new trigger, the legislation (H5854) simply adds three words to existing state law (General Law 44-18-18) that mandates a cu to the sales tax rate, to read “upon passage of any federal law or court decision that authorizes states to require remote sellers to collect and remit sales and use taxes …”

“The newly defined trigger in this bill has clearly been met via a 2018 US Supreme Court decision,” said Mike Stenhouse, CEO for the Center. “However, this legislation should not even be necessary, as both the Governor and the Speaker were already given the authority in by the General Assembly 2014 to fulfill the government’s promise to the people. They can comply with state law simply by inserting the reduced sales tax rate into one of their budget lines.”

The rationale for this law was to relieve Rhode Islanders of the additional burden of imposing a sales tax on a broader range of purchased goods, by easing the tax rate. The Center, in its 6.5% Sales Tax policy brief argued, while no actual federal law had been passed, that the original trigger threshold had effectively been met by the continued expansion of the sales tax, including remote sellers.

Doomed to lose a prized US Congressional seat because of its relative population loss,the Center’s larger “Freedom Agenda“, designed to attract more families and business to the Ocean State, stands in direct contrast to the regressive policies put forth by progressive-Democrats earlier this month. The Center’s agenda calls for specific tax and regulatory cuts, more healthcare choices, and protection of constitutional rights. A policy brief on raising the state Estate Tax exemption is expected soon.

In its Zero.Zero report many years ago, the Center’s extensive research and economic modeling calling for a full repeal, or reduction to 3.0%, of the state sales tax, as the most effective way to grow jobs, gained significant legislative interest.