Policy: Budgets & Deficits

Rhode Island lawmakers pushing reduced state sales tax

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News,Business,Taxes,Budgets and Deficits

PROVIDENCE, R.I. (AP) — Two Rhode Island lawmakers are launching a push to lower the state's 7 percent sales tax in an effort they say will help the economy.

Rep. Jan Malik and Sen. Walter Felag Jr. are each introducing two bills. One would lower the tax on all items to 3 percent. The other would reduce the tax to 6 percent on most items, though it would maintain current rates for meals and hotels. It would also nix the sales tax on utilities for businesses.

Malik says Rhode Island businesses are at a disadvantage because Massachusetts and Connecticut have lower sales taxes.

The two lawmakers co-chaired a special commission that studied the possible elimination of the sales tax. The panel didn't make specific recommendations.

Rhode Island's sales tax generates $900 million a year.

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