Rhode Island governor rolls out tax relief package
(The Center Square) – A $100 million tax relief plan proposed by the governor would benefit Rhode Island families and small businesses.
Gov. Dan McKee unveiled the proposed plan through his fiscal year 2024 budget proposal as residents deal with rising inflation through reducing taxes, preventing an increase in the gas tax, and providing energy rebates.
“Rhode Island families and businesses are ready for more tax relief and our Administration is ready to deliver,” McKee said in a release. “We know that Rhode Islanders are still dealing with rising prices at the grocery store and the gas pump. And we know that families have been forced to make difficult financial decisions because their dollar isn’t stretching as far as it used to. That’s why the budget I’ll be submitting to the General Assembly proposes more ways to help Rhode Islanders navigate these inflationary pressures, while making our state a more competitive place to do business.”
According to the release, the plan would reduce the state sales tax incrementally, beginning this year, with a decrease to 6.85% from 7%. The savings would total $35 million per year. The sales tax was increased in the 1990s during the banking crisis with the promise it would eventually be lowered.
The tax relief plan, according to the release, also would lower the corporate minimum tax to $375 from $400 in an effort to help small businesses.
In addition, the Democratic governor wants to stop an increase in the gas tax by preventing the scheduled 3-cent increase from going into effect on July 1. The move that would save $25 million over the next two years.
The plan also includes energy bill rebates, according to the release, which would grant a 4% rebate on gross receipts tax on electric bills and another 3% gross receipts tax rebate on natural gas bills to provide $35 million in total relief.
However, one state representative said there could be a better way to provide residents with relief.
Rep. David Morales, D-Mt. Pleasant, tweeted, “I just want to remind us that there are more substantive ways to provide economic relief to working people and families aside from minor reductions in taxes – lowering prescription drug costs, increasing wages, stabilizing the cost of rent, and limiting utility rate hikes.”
McKee’s plan would also invest more than $4 million into the Workers Compensation Fund in an effort to prevent premiums paid by the state’s businesses from increasing, according to the release. Also, the plan would exempt from sale and use tax for trade-in value of trucks with a gross weight of more than 14,000 pounds or less, which would save $3.7 million throughout the fiscal year.
According to the release, the plan builds on the $200 million in tax relief that was delivered to residents last year through child tax rebates, expediting the car tax phaseout, and ending tax on military pensions.
Originally published by The Center Square. Republished with permission.
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