Keeping Up with the Neighbors: Rhode Island Sales Tax Holiday Introduced

Connecticut does it. Massachusetts does it. In fact, more than a dozen states did it in 2015. Why shouldn’t Rhode Island do it, too?

Legislation has been introduced that would create a one-time Rhode Island sales tax holiday on August 6, 2016. If enacted, it would exempt most tangible personal property with a sales price of $2,500 or less from Rhode Island’s 7% sales tax. Certain big-ticket items, such as motorboats and vehicles, would not be eligible for the exemption. Meals, utilities and tobacco products would also remain taxable.

Representative Deb Ruggiero, sponsor of the bill (HB 7010), says there are many reasons to support it:

• It would stimulate the economy by generating revenue for local businesses
• It would help keep Rhode Island shoppers’ dollars in Rhode Island
• It would provide tax relief to ordinary Islanders

She notes that August is typically a slow period for retailers, and a sales tax holiday could help encourage Rhode Islanders to get out and shop. It may also prevent them from traveling to nearby Massachusetts or Connecticut to take advantage of those state’s sales tax holidays, which typically occur in mid-August. This is not the first time Rep. Ruggiero has introduced a sales tax holiday measure.

Sales of works by artists, composers and writers have been exempt from Rhode Island sales tax since December 1, 2014.

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