Proposed Sales Tax Holiday in Rhode Island

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Wednesday, March 09, 2011

GoLocalProv Business Team

While Governor Lincoln Chafee is proposing expanding the sales tax, one legislator is proposing a sales tax holiday. Representative Lisa Baldelli Hunt, a Democrat who represents District 49 in Woonsocket has proposed legislation that would allow RI to have two sales tax holidays each year to match sales tax holidays declared in our neighboring states.

In the proposed legislation (2011-H 5607), when Massachusetts or Connecticut declare a tax holiday, RI will also have a sales tax holiday. This will happen for up two days a year.

The bill aims to protect Rhode Island’s retailers from losing sales to stores in neighboring states. The Woonsocket representative claims the effect of sales tax holidays in Connecticut and Massachusetts hurts communities near our borders.

RI peer to MA & CT

“Every place in our state is within a one-hour drive to Massachusetts or Connecticut. If one of those states is having a tax holiday, there’s no doubt that our stores are losing sales to them. This legislation would not only prevent that loss, but would also provide some incentive for Rhode Islanders to stimulate the local economy, support local stores and make purchases that might otherwise be a little out of reach,” stated Representative Baldelli Hunt.

Baldelli Hunt attempted to push similar legislation last year when Massachusetts declared a holiday last August. Connecticut enjoys a week once a year during which clothing and footwear items priced below $300 do not have a sales tax.

“Sales tax holidays do get people shopping, and our local businesses could really use a boost. What they definitely don’t need is for shoppers to run to Massachusetts or Connecticut for a sales tax holiday that they can’t match,” said Baldelli Hunt. “This would be a shot in the arm for local businesses, many of which suffer from slow sales in the summer.”