Legislative Updates
This Week at the State House
Tuesday, May 5th
World Cup Extended Service Hours
The House of Representatives will vote on Tuesday on H 8009A, and the Seante is scheduled to vote on Thursday on S 2627A, legislation to enable extended service hours to provide public watch opportunities for certain late night FIFA World Cup Tournament matches. If enacted, licensees could apply at least two weeks in advance of certain match dates to their local licensing authority to extend indoor operating hours up to 4am and liquor service up to 3am. The eligible periods are for the following dates and continue to the early morning hours of the succeeding day: June 11, 13, 14, 16, 17, 19, 20, 22, 23, 25, 26, and 27; and July 2 and 3. A local licensing authority may grant or deny, in full or in part, any application to extend service hours under these provisions.
https://webserver.rilegislature.gov/BillText/BillText26/Proposed26/H8009A.pdf
https://webserver.rilegislature.gov/BillText/BillText26/Proposed26/S2627A.pdf
Wednesday, May 6th
Payment of Wages
The Senate Labor & Gaming Committee will convene at 4pm in Room 212 to hear various legislation impacting the payment of wages. Testimony can be emailed to: slegislation@rilegislature.gov.
Under current law, employers are not obligated to pay overtime to their executive, administrative, and professional employees who are compensated through salary rather than hourly wages, unless the salary of such employees would fall below the minimum wage. S 2166 would make additional salaried employees eligible for overtime pay. Small employers of 1-50 employees and large employers of 50 or more would be required to pay overtime to currently exempt workers if their salary falls below 1.5 times or 2 times, respectively, the minimum hourly wage for a forty-hour workweek. These triggers would increase to 2.5 times the minimum hourly wage for all employers by 2029. Many employees currently classified as exempt are compensated with higher salaries and benefits in exchange for their increased responsibilities and the expectation of flexible work hours. The relationship between employers and employes could become more transactional, shifting from a focus on results and outcomes to hourly tracking and micromanagement.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2166.pdf
Between 2020 and 2026, Rhode Island businesses experienced a 47.8% increase in minimum wage labor costs. The Bureau of Labor Statistics calculates the cost-of-living increase to be 26% over the same period. For many businesses, labor is the highest operational cost, so an increase in wage is often difficult. When wages increase, there are other costs that are directly impacted by the increase. For example, if the minimum wage is increased, the unemployment insurance premium goes up, worker’s compensation insurance premiums go up, FICA payments increase. Also, Rhode Island remains the only state in the country that requires many employers to pay premium pay to employees who work Sunday and holidays as part of their normal forty (40) hour work week. For these employers, an increase in the minimum wage rate is an even greater hardship. These additional costs of doing business are not considered as part of these proposals and are simply increases that most businesses, especially our small businesses, cannot absorb without directly impacting their ability to remain open or to expand and grow.
S 2325 & S2923 would increase the minimum wage from $17 per hour by the Consumer Price index effective January 1, 2028.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2325.pdf
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2923.pdf
S2620 & S 2930 would increase, respectively, the minimum wage commencing January 1, 2027, to be $20 or $24 per hour.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2620.pdf
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2930.pdf
S 2408 would increase the tipped minimum wage from $3.89 to $6.75 per hour, a 73.5% increase on January 1, 2027. It is important to understand that the “tipped wage” does not equate to the hourly wage paid to the employee. Both federal and state law require an employee to be paid minimum wage. If the employee does not make minimum wage when the tipped wage and customer tips are added together, the employer must make up the difference. Tips are a part of the employee's wage; tips are not windfalls over and above wages. S 2408 seeks to move the state toward the European model for restaurant wages. Those wages are higher for employees, but the model eliminates tipping. The result is a disincentive to provide good service as many who traveled have experienced.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2408.pdf
Thursday, May 7th
The House Finance Committee will convene hearings at the Rise (~5pm) in Room 35 on an array of bills proposing changes to various taxes. Testimony on these proposals can be emailed to: HouseFinance@rilegislature.gov.
Income Tax
H 7313 creates a three percent tax surcharge for persons with taxable income over $625,000, taking our State’s highest income tax rate of 5.99 percent to 8.99 percent – a fifty percent increase. This increase would place Rhode Island’s topmost income tax rate at 8th highest in the country. The Chamber is very concerned that the passage of budget proposal will stifle economic development of businesses and encourage those who can, to move to a lower cost state.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7313.pdf
H 7805 would provide for a phased reduction of personal income taxes by an aggregate 10% via 5 consecutive annual 2% reductions of tax rates from 2027 to 2031.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7805.pdf
H 8438 would carry through the federal deductions provided for qualified gratuity income up to $25,000 and overtime income up to $12,500 to the state level.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H8438.pdf
Estate Tax
Rhode Island maintains a transfer tax on the value of a decedent’s estate, including real property and interest in certain securities located in Rhode Island, before distribution to any beneficiary. It is among the 12 states and the District of Columbia that impose such a tax. For decedents dying on or after 1/1/2026 in Rhode Island the gross estate threshold is $1,838,056, prior to any deductions in value for such items as mortgages, debts, and claims, with a rate from 0.8%-16%, which is near the lowest exemption level of states with an estate tax. The estate tax disincentivize investment in Rhode Island. Aligning it to the federal estate tax exemption or eliminating it altogether would encourage wealthy individuals and their assets to stay in in Rhode Island. H 7312 would raise Rhode Island’s estate tax exemption to be aligned with the federal $15 million estate tax exemption level on January 1, 2027, as is the practice in Connecticut.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7312.pdf
Corporate Minimum Tax
Rhode Island currently imposes a minimum tax of $400 each year on corporations, including pass through S Corporations. H 7397 would repeal the minimum tax.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7397.pdf
Sales Tax Holiday
H 8199 would create a sales tax holiday for August 8 & 9, 2026. No sales tax would be collected on nonbusiness sales of tangible personal property, except for sales of telecommunications, tobacco products, gas, steam, oil, electricity, motor vehicles, motorboat, meals or a single item whose price exceeds $2,500.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H8199.pdf
Tax Amnesty
H 7398 authorizes the tax administrator to waive interest and penalties on delinquent taxes paid in full during a one-week amnesty period each year.
https://webserver.rilegislature.gov/BillText/BillText26/HouseText26/H7398.pdf
Commercial Property Tax Interest Waiver; Local Investment Tax Credit
The Senate Finance Committee will convene hearings at the Rise in Room 211. Testimony on these proposals can be emailed to: SenateFinance@rilegislature.gov.
S 2453 would allow the waiver of interest on overdue taxes for commercial properties in good standing for five prior years, similar to what is currently authorized for residential property.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2453.pdf
S 2833 provides an investment tax credit to a taxpayer that makes a qualified investment in a local qualified business of ninety-nine employees or less. The program would be funded by a Rhode Island Commerce Corporation strategic fund. The bill also anticipates the use of annual general revenue appropriations.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2833.pdf
Landlord-Tenant
The Senate Housing and Municipal Government Committee is scheduled to meet at the Rise in Room 212 to hear various bills impacting landlords and tenants. Testimony regarding these matters can be submitted to: SLegislation@rilegislature.gov.
S2271 would impose rent control, limiting rent increase to no more than 4% annually unless granted an exemption by the secretary of housing.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2271.pdf
S 3161authorizes municipalities, through ordinance, to require private real property owners to obtain a license to operate a dwelling unit as student housing. https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S3161.pdf
S 2266 would prohibit the use of algorithmic pricing by landlords to determinate the amount of rent to be charged.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2266.pdf
S 2267 imposes responsibilities on landlords and tenants with respect to the inspection and treatment of bed bugs in residential premises.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2267.pdf
S 2579 would increase the notification time about rent increases and termination of tenancy for month-to-month tenants from 30 to 60 days, or 120 days for tenants aged 62 or older.
https://webserver.rilegislature.gov/BillText/BillText26/SenateText26/S2579.pdf
New Introductions
House Bill No. 8505 BY Lombardi, Hull, Sanchez, Cruz, Potter
Protects bullying/psychological abuse in workplace inflicted upon employees by employers/co-employees/provides civil remedies to affected employees/fines against employers/imprisonment/fines against co-employees.
House Bill No. 8512 BY Cotter, Brien, Corvese
Exempts from sales tax the amount paid for food and beverages during summer restaurant week and winter restaurant week.