Rhode Island – Political Scene: Does Internet Revenue Boost Justify A Sales Tax Cut?



Lawmakers rejected most of then-Gov. Lincoln Chafee’s tax plans in 2011, but got behind one of his concepts in their annual budget — a future sales tax rate cut if the state were ever allowed to tax internet sales from the likes of Amazon.

PROVIDENCE — The year was 2011. Rhode Island was climbing out of the great recession and then-Gov. Lincoln Chafee hoped to balance the state’s budget with more than $160 million in new sales taxes from a slew of services and previously exempt items.

Lawmakers, of course, rejected most of Chafee’s tax plans, but got behind one of his concepts in their annual budget — a future sales tax rate cut if the state was ever allowed to tax internet sales from the likes of Amazon, which was growing rapidly but at the time collecting no Rhode Island sales tax.

“In recognition of the work being performed by the Streamlined Sales and Use Tax Governing Board, upon any federal law which requires remote sellers to collect and remit taxes, the rate imposed … shall be [6.5%],” the budget stated.

That future appeared to be at hand when, reacting to a U.S. Supreme Court case last year, lawmakers passed and Gov. Gina Raimondo signed into law last month a bill requiring “remote sellers,” as internet retailers are known, to collect and remit Rhode Island sales tax. The bill, which took effect immediately, is expected to raise $11.5 million next year and $13.6 million the following year.


For The Full Story: Providence Journal

Providence journal
by patrick anderson
april 28, 2019