Pecked to Death by Taxes
The broad based tax proposal predicted by many has reared its ugly head on Smith Hill. House Bill 7873, introduced by Representatives Slater, Segal, Ferri, Diaz and Almeida on Tuesday, would lower the state sales tax from 7% to 4.5% but apply to just about every service offered in the state, as well as food and clothing purchases over $150.
This tax would subject advertisers in print and radio and television to the tax. It would subject financial services, pharmaceutical services, Chambers of Commerce dues, professional association dues and other type dues to the tax. If a business outsources its web design, printing, photocopying, landscaping, public relations, advertising, cleaning services, etc, it will be taxed. This tax would also be imposed on personal services, such as haircuts, manicures, golf lessons, entertainment, marina dockings, dance lessons, etc.
… oh, medical and legal services would be exempted. (There are no attorneys serving in the legislature, are there?)
The Northern Rhode Island Chamber of Commerce, which sounded the alarm, is correctly skeptical, especially as
There is no state agency, legislator, tax official or person in general, who can give a true estimate as to how much money the state would realize if this legislation were enacted. The fact is that the fiscal staffs of the Legislature can account for a general estimate of what would be raised by including all sorts of new services subject to the sales tax, but they cannot account for how much revenue would be lost by a slowdown in purchasing, cross boarder purchasing, etc. It is not responsible right now to give a projected figure. (The Chamber maintains that the state could actually lose revenue.)
One would not have thought that this was the wisest course of action to contemplate, in view of Rhode Island’s abysmal business tax climate and ranking as the fourth highest taxed overall.
[Thanks to commenter ChuckR for bringing this development to our attention.]