The Yearly Ritual of Proposing a Sales Tax Expansion

In an addendum to his original post, Marc noted that the House bill to extend that sales tax to almost every business transaction in the state is likely to die a quiet death today. (Currently, most services are exempted from the Rhode Island sales tax). Allow me to offer a quick footnote on this matter.

Every year for the past several years, Representative Thomas Slater (D–Providence) and a changing cast of co-sponsors have proposed a sales-tax expansion similar to this year's proposal. The 2006 version of the bill was H6930. The 2005 version was H6025. And there are other tax-increase proposals introduced to the General Assembly as annual rituals. For instance, for each of the past three years, Reps. Slater (again!), Grace Diaz (D-Providence) and Joseph Almeida (D-Providence) have introduced a bill that would remove the sales tax exemption for daily newspapers (H5228 [2007], H6990 [2006], H5531 [2005]).

These proposals have never gone anywhere in past years, and even with the deficit troubles faced by the state, they probably won’t be going anywhere this year.

There is, however, one significant difference between this year’s version of the sales tax expansion and the previous years’ version that is worth noting. The 2005/2006 sales-tax bills called for extending the sales tax ONLY to medical and legal services, while the current bill would expand the sales tax to every service BUT medical and legal services. I wonder if Representative Slater got a few more lawyers to sign on to his broaden-the-sales-tax coalition by promising to tax everyone but them!