Rhode Island must modernize its antiquated sales tax to maintain investments in public services that improve our quality of life, protect our families and businesses, and help grow our economy. Today, we have one of the narrowest sales tax bases in the country, and our collections from this important source of revenue are well below the national average.
The Governor’s proposal to broaden the sales tax base and lower the rate is a logical and necessary response to a changing economy and shifting consumption patterns. When Rhode Island’s sales tax law was passed in 1947, the drafters could have never foreseen how our economy would change over time. Back then, people bought more goods than services and they bought those goods at local stores. Today, we consume more services than goods and we buy more things online, where purchases can escape taxation.