For the last few years, there has been some serious debate
over Rhode Island’s
sales tax. It’s a tough decision – do we stay at 7 percent or do we lower it a
little to stay competitive with the border
states? Some people think we should just eliminate it
all together. In order to really get a good grasp on how we should attack the
issue, I think we have to think about why people really cross the border. Is it
to save on sales tax, even if there is only a 75-cent difference? Or is it
about convenience? These are fair questions to ask ourselves.
Here is what I believe: people who are trying to save money do go where they can get the best price,
especially when we’re talking about big ticket items. That means factoring in
taxes, the cost of gas to get to the store and base prices. Someone might not
think about these things when buying a pack of gum. But in our mission to be
problem solvers, we have to wonder what causes a person to go to a drugstore in
Massachusetts or Connecticut in the first place.
That’s where rebranding could come in handy. I have
introduced a bill to lower the sales tax to a reasonable 6.25 percent – on par
with our neighbor, Massachusetts
– and use a portion of the revenue from the sales tax to repair and maintain
the most essential elements of our state’s infrastructure: highways and roads.
This isn’t just about passing some sort of reform to help our taxpayers save money.
If this legislation is enacted, it has the ability to change the image of our
state. Essentially, we’re putting a “Welcome” sign on our front lawn. I think
we need to drive the point home that we are willing to stay competitive, adapt
to an ever-changing economy and rebuild the areas that are in such dire need of
a stronger foundation. If we can change the mindset of the consumers in our own
state, we can absolutely change the perception of Rhode Island from the outside. We just need
to make a few bold moves while keeping in mind the economic realities we face. With
no issue taking priority over fixing our economy, I think it is finally time to
answer the sales tax question.
The second part of my bill ensures that the first $25
million we make from the portion of the tax that comes from internet sales go
toward the Rhode Island
highway maintenance account. This piece of the legislation is contingent upon
the United States Congress passing the Marketplace Fairness Act, which would
grant individual states the authority to compel online retailers to collect
sales tax like local retailers.
We are losing massive amounts of federal dollars for
infrastructure each year because our leaders on the national stage are making
really tough decisions that affect our economic health in Rhode Island. It may seem very basic to
some, but taking care of our roads plays a huge role in our image as a tourist
destination, a business-friendly state and, in general, a place where people
want to live, work and go to school. If we want to be all of those things,
attracting business is key. We need to fix our roads so that commerce can flow
Once we come to a point of pre-recession stability, then we
can talk about moving some of that money over to our much-needed social
services and other important budget items. But most importantly, it is vital to
the survival of this state to re-invest in the two things that provide our
foundation for everything: business and infrastructure.