House Budget Seeks to Repeal Sales Tax Cut Statute
Center Calls on Lawmakers to Keep Promise to Taxpayers
Providence, RI — Rather than honor existing state law that specifies a reduction in the state’s sales tax rate, and deal with continued criticism for inaction, faint-hearted House leaders are instead seeking to change the law by attempting to sneak its repeal through the budget without public debate.
As a sad irony, instead of using the budget process to reduce the sales tax rate for Ocean State consumers, and comply with state law, as the RI Center for Freedom & Prosperity had previously suggested … the House decided to use the budget process to repeal the law, hoping not to raise any public attention.
“Clearly, the Speaker and House leaders recognize that our Center has been right all along about complying with this state statute,” said the Center’s CEO, Mike Stenhouse. “So, rather than honor the law, they seek to change the law. This disturbing trend of moving the goal-posts will not bring prosperity to Rhode Islanders.”
Now, the Center calls on rank-and-file lawmakers to stand-up for the promise made to taxpayers years ago and to find a way to keep the law on the books, if not demand that the law actually be followed.
The original rationale for the law was to relieve Rhode Islanders of the added burden of a sales tax imposed on a broader range of “internet” purchased goods, by easing the overall tax rate. The Center, in its 6.5% Sales Tax policy brief argued that the legal threshold had effectively been met by the continued expansion of the sales tax on internet purchases by remote sellers.
“If the political class breaks this sales tax promise, how can Rhode Islanders ever trust the promise made about not imposing tolls on our cars,” asked Stenhouse. “This loss of hope for our state’s political system is one reason why so many of our family and friends are fleeing our state.”
Suffering from a spate of retail store closings and a depressed jobs market, as compared with other states, the Center has repeatedly made the case that Rhode Island would get an economic boost from a reduced sales tax rate, in addition to providing residents with more cash in their pockets.
In its Zero.Zero report many years ago, the Center’s extensive research and economic modeling calling for a full repeal of the state sales tax, or reduction to 3.0%, as the most effective way to grow jobs. Related legislation in 2013 gained significant legislative interest, but ultimately did not advance.