R.I. lawmaker proposes sales tax holiday

December 22, 2015 3:30 pm

By: Rebecca Turco

Email: rturco@abc6.com

PROVIDENCE, R.I. – A Rhode Island lawmaker is pushing a bill for a sales tax holiday in August.

State Rep. Joseph Solomon (D – Warwick) said he has drafted a bill to give shoppers and businesses a weekend break from Rhode Island’s seven-percent sales tax. The tax break proposed for August 6-7, 2016, the weekend before VJ Day, would be on most items costing less than $2,500. Rhode Island already has tax exemptions for clothing and footwear.

“It’s about keeping the business in Rhode Island,” Solomon explained. “So many times you hear about people from Rhode Island going to Massachusetts or Connecticut to enjoy their sales tax holiday. I think it’s about time we keep those dollars in the state of Rhode Island."

Jan Dane, owner of Stock Culinary Goods in Providence, is on-board with the plan, especially since it would take place during an otherwise slow time of the year. "I can imagine that would be a nice little incentive to get people out, a little shock to push people back into the stores,” she said. “It could be great."

This incentive would fall just a week before a similar holiday in Massachusetts, which makes Asher Schofield, the owner of Frog & Toad in Providence, feel skeptical: “I’m worried that it could perpetuate that narrative that Rhode Island is always following Massachusetts’ lead and I think it’s time that we start thinking bigger than that"

One way to do just that, Schofield said, is to instead pick a weekend that isn’t typically slow. "Why make a nominal effort at doing it,” he countered. “Let’s do it on December 20th when people are really out shopping and we could really use people shopping in Rhode Island versus Massachusetts or Connecticut."

Similar bills have been proposed in the past and failed. Speaker of the House Nicholas Mattiello believes that is because it’s costly to the state, which relies on sales tax revenues to provide essential services. “A two-day sales tax holiday would potentially lessen the amount of taxes collected by several million dollars, and we would have to weigh that loss against the benefits to the taxpayers,” he said in a statement to ABC6 News.

Solomon plans to introduce his bill on January 5, the first day of the legislative session. The holiday would not apply to sales of telecommunications, tobacco products, gas, steam, oil, electricity, motor vehicles or motorboats.