February 21, 2014

Proposal introduced to increase the RI income tax and reverse the 2010 tax reform

As in past years, Rhode Island’s personal income tax rate is again the topic of legislation at the General Assembly. Specifically, raising taxes to the rates that existed four years ago and made RI the 5th highest income tax state in the country. Tax reform in 2010 that the Chamber was very involved with and supportive of, reduced RI’s maximum tax rate from 9.9% to 5.9%. This change instantly made RI competitive with other New England states and with the country as a whole. We went from being one of the highest income tax rate states in the country to a more reasonable and competitive “middle of the pack.” This year, the Chamber Coalition is tracking and opposing a very important piece of legislation in the House of Representatives. The recently introduced legislation (link below) would increase the tax imposed on the income of certain individuals and reverse the “income tax reform” of 2010. The proposal would raise the rate by 2% leading to an inconsistent tax policy and a change in our national competitiveness rankings. The legislation is especially troubling for LLCs, SCorps and other “mom and pop” type pass-through entities/businesses. The Chamber Coalition will vigorously oppose this bill and all bills similar to it.

House bill number 7245
Click here for legislation related to taxation -proposal to increase income tax

(This bill would increase the tax imposed on the income of certain individuals and reverse the income tax reform of 2010. The reform enacted in 2010 is a highly regarded policy decision praised in regional and national publications as a competitive step forward for RI’s tax environment, helping the state retain and attract businesses, employees and residents. Reversing the reform would have a negative impact on RI’s already fragile economic climate.)

·         Chamber testifies in favor of Governor Chafee’s budget proposal to reduce the corporate income tax rate from 9% to 6%

Article 14 of Governor Chafee’s proposed state budget for Fiscal Year (FY) 2014 seeks to reduce the corporate tax rate from 9% to 6%. Alaska, Illinois, Iowa, Minnesota, New Jersey and Pennsylvania are the only states in the country to have an equal or higher corporate tax rate than Rhode Island. By instituting the change, RI’s corporate tax rate will be the lowest in New England and will be very competitive on a nationwide basis. The budget article can be found by clicking here.

·         Legislation to effectively limit work on state, municipal and quasi-government projects to UNION MEMBERS ONLY has the Chamber Coalition’s full attention and opposition

This legislation (Click here for Senate version) is very troubling and was not introduced (as is the claim by certain trade unions) to strengthen safety, increase educational and workforce opportunities or create jobs. Rather, the legislation was written to effectively eliminate all non-union (building trades) contractors from bidding/working on any kind of state, municipal or quasi government project.                                                                                          

Your Chamber Coalition will continue to update you on the status of this and all the above mentioned proposals.

The Rhode Island General Assembly will be back from its annual winter recess on Tuesday, February 25^th, which means your Chamber of Commerce Coalition will also be back advocating on your behalf.

Where in particular will your Chamber Coalition be at the State House next week? Here is the schedule to date:

Remember: The Chamber of Commerce Coalition is your voice at the Rhode Island State House. If you have any concerns, questions or comments, please do not hesitate to contact David Carlin, Vice President of Government Affairs for the Northern RI Chamber of Commerce and Chamber of Commerce Coalition coordinator and lobbyist at (401) 334-1000 ext. 107 or by email at dcarlin@nrichamber.com