Report: R.I. business taxes above national average

RHODE ISLAND'S ratio of business taxes to its gross state product is 5.4 percent, according to a report from Ernst & Young conducted with the Council on State Taxation and State Research Tax Institute. / COURTESY ERNST & YOUNG
RHODE ISLAND'S ratio of business taxes to its gross state product is 5.4 percent, according to a report from Ernst & Young conducted with the Council on State Taxation and State Research Tax Institute. / COURTESY ERNST & YOUNG

PROVIDENCE – Rhode Island’s ratio of business taxes to its gross state product is 5.4 percent, placing the Ocean State above the U.S. average of 4.6 percent, according to the 14th annual report released recently from Ernst & Young LLP conducted with the Council on State Taxation and State Research Tax Institute.

Alaska, Connecticut and North Dakota were tied for the lowest ratio at 3.5 percent, while North Dakota had the highest at 9.9 percent. The GSP represents the total value of a state’s annual production of goods and services by the private sector.

In Rhode Island, the report said the business share of state taxes is 39.4 percent, while the business share of local taxes is 48.4 percent. The business share of state and local taxes combined is 43.4 percent, below the national average of 44.1 percent.

Rhode Island businesses paid $1.4 billion in state taxes, and $1.3 billion in local taxes, for a total of $2.7 billion. Total tax revenue amounts to $6.1 billion in the Ocean State.
The report is based on fiscal 2015 tax data.

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Businesses throughout the nation paid more than $707.5 billion in state and local taxes in fiscal 2015, an increase of 1.9 percent from fiscal 2014.

State business taxes grew less quickly than local taxes, with state taxes growing 1 percent compared with local tax growth of 2.9 percent, the report said.

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