An Update from the State House
Car Excise Tax Proposal Scheduled for Hearing
Tuesday will be a big day at the State House as the Finance Committee hears testimony on H.6267, An Act Relating to Taxation – Excise on Motor Vehicles and Trailers. This is the first big step to keep a promise the Speaker made to his constituents during the election last year. The Governor applauded the effort made to address a big issue in the State; and Senate President Dominick Ruggerio filed the bill in the Senate – S.935 – signaling that the excise tax will likely be included in the budget.
Marijuana Headed for a Study Commission
While legislative issues are never 100% settled until the gavel goes down the last night of session, it does appear that marijuana will not be legalized this year. Proponents and Opponents continue to argue over the Colorado experience and what it means. If legalized and taxed, marijuana could yield significant revenue, but at the same time, could cost the State of Rhode Island up to two-thirds of the revenue raised for the purpose of paying for administration, law enforcement and treatment programs. On Tuesday, the House Judiciary Committee will vote on H.5551SubA, a study commission that is charged with reporting its findings to the legislature by March 1 2018.
Burrillville Energy Plant Scheduled for Hearing
The Senate Judiciary Committee has scheduled a hearing for Tuesday June 13th, to accept testimony on three bills: S.714, An Act Relating to Taxation – Burrillville Property Tax; S.756, An Act Relating to State Affairs and Government – Energy Facility Siting Act; and S.769, An Act Relating to State Affairs and Government – Energy Facility Siting Act. Under current law, the Town Council of Burrillville may pass a resolution or ordinance to tax the personal and real property of any energy generating facility. S.714 changes the law to say personal and real property IS TAXABLE, meaning the Town Council has no discretion on the matter. Both S.756 and S.769 look as if they are state-wide initiatives, but are really meant to stop the Burrillville Power Plant project. S.756 states that the energy facility siting board could not proceed to a final hearing or issue a final decision on the siting of a plant if any one of the agencies on the board declares it is unable to form and advisory opinion due to lack of information (which is broadly defined). S.769 changes the number of members on the energy facility siting board. There are currently three (3) members. S.769 would require that an additional two (2) members from a host community be named to the board when the board is reviewing a potential energy generation plant.
Rhode Island’s Tax Structure
The House Finance Committee met last week for 4½ hours listening to taxi cab drivers, pet service owners, advocates for women, farmers, and flea market owners all asking for relief of the sales tax burdens, leaving more than one legislator asking, “how did we get here?” Rhode Island’s sales tax policy did appear rather random as to what is taxable and what is not taxable. That said, with the State facing a sizeable budget deficit, it is difficult to see how relief might be provided to the advocates who attended the hearing, but their message certainly was heard. One proposed tax increase was H.5787, An Act Relating to Taxation – Sugary Drinks. H.5787 places a tax on drinks based on the sugar content per ounce: Tier 1: Beverages with less than five grams (5g) of sugar per twelve fluid ounces would not be taxed; Tier 2: Beverages with more than five grams (5g) but less than twenty grams (20g) of sugar per twelve fluid ounces (12 fl. oz.) would be taxed at a rate of one cent ($0.01) per ounce. Tier 3: Beverages with twenty grams (20g) of sugar or more per twelve (12) fluid ounces would be taxed at a rate of two cents ($0.02) per ounce. Medical drinks, pure fruit juices and milks are exempt. The tax is to be paid by the distributor; but if the distributor fails to pay the tax, then the retailer is responsible for payment. Many health care advocates testified in favor of the bill, citing the need to curb childhood obesity. Opponents of the bill – including the Chamber – testified against the bill pointing out the complexity of the tax and the right of individuals to choose what they want to consume. Proponents believe H.5787 would raise at least $30 million annually.
The following new bills were filed:
House Bill No. 6267, AN ACT RELATING TO TAXATION -- EXCISE ON MOTOR VEHICLES AND TRAILERS (Provides for the reduction and elimination of the motor vehicle excise tax. Also provides that cities, towns, and fire districts would be reimbursed for the revenues lost by the reduction and elimination of the excise tax.)
Senate Bill No. 922, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- REBUILD RHODE ISLAND TAX CREDIT (Adds a definition for "manufacturer" for purposes of providing a tax credit application exemption to certain projects under the RI Tax Credit Act to include occupants that are manufacturers.)
Senate Bill No. 929, AN ACT RELATING TO BUSINESSES AND PROFESSIONS – CONTRACTORS’ REGISTRATION AND LICENSING BOARD (Requires an applicant for any license or registration issued by the contractors’ registration and licensing board to undergo a national criminal records check.)
House Resolution No. 6278, HOUSE RESOLUTION CREATING A SPECIAL LEGISLATIVE COMMISSION TO BE KNOWN AS "GROWING TOURISM IN THE STATE OF RHODE ISLAND" (Creates an 18 member "Growing Tourism in the State of Rhode Island" commission to examine, evaluate and provide recommendations to manage and grow Rhode Island's tourism economy, and reports back by 1/5/19, and expires on 3/5/19.)
House Bill No. 6279, AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES (Amends from ten (10) years to twelve (12) years the period which the city of Central Falls may authorize a stabilization of taxes on qualifying property located in the city of Central Falls.)