public policy

Tax Foundation report outlines R.I. tax rates, collections

COURTESY THE TAX FOUNDATION
THE TAX FOUNDATION'S 2013 Facts and Figures report outlined Rhode Island's tax rates versus those of the other states in the nation.
Posted 4/11/13

WASHINGTON – Rhode Island’s tax rates are some of the highest in the United States, according to The Tax Foundation’s 2013 “Facts and Figures” report.

The Ocean State ranked No. 8 nationwide for the state and local tax burden per capita for the fiscal year 2010 at $4,627. Comparatively, Connecticut was No. 1 with $6,984 and Mississippi was No. 50 with $2,625.

At 10.9 percent, Rhode Island ranked No. 6 in the nation for state and local tax burden as percentage of state income in 2010. The national average was 9.9 percent.

The report also graded Rhode Island on its 2013 business tax climate index, in which it ranked No. 46 overall. Rhode Island earned the No. 25 slot for sales tax, the No. 37 slot for independent income tax, the No. 42 slot for corporate tax, No. 46 for property tax and No. 50 for unemployment insurance tax.

The state business tax climate index is a measure of how each state’s tax laws affect economic performance - the higher the rank, the more favorable the tax system.

In fiscal year 2011, the Ocean State ranked No. 18 for state tax collections per capita at $2,603. The U.S. average was $2,441.

For the same fiscal year, the state ranked No. 11 for state revenue per capita at $6,788. In this instance, revenue refers to the U.S. Census Bureau’s general revenue classification, which includes taxes, fees, licenses and intergovernmental revenue.

For the previous fiscal year, state and local revenue per capita in Rhode Island ranked No. 9 in the U.S. (with No. 1 as the highest) at $9,402. In Rhode Island, 45.6 percent of state and local tax revenue comes from property tax, 16.6 percent from general sales tax, 18.9 percent from individual income, 2.5 percent from corporate income and 16.4 percent from “other taxes,” which include excise taxes, severance taxes, stock transfer taxes, and estate and gift taxes.

Rhode Island fared slightly better regarding state individual tax collections per capita, ranked No. 14 at $966 in the 2011 fiscal year.

The Ocean State’s 7 percent state sales tax rate earned it a No. 2 ranking for states as of Jan. 1, 2013, but the fact that the was no additional local tax rate earned it the No. 20 slot for combined sales tax rate.

The state’s general sales tax collections per capita for fiscal year 2011 was $784, the No. 20 slot in the U.S. Including local figures (for the 2010 fiscal year), the state ranked No. 33 at $758.

Rhode Island had the 13th highest gasoline tax at 33 cents per gallon. Comparatively, neighboring Massachusetts ranked No. 29 with a 23.5 percent total tax per gallon.

Although Rhode Island’s cigarette excise tax rates were second highest in the U.S. at $3.50, the state’s spirit excise tax rate was No. 34 at $3.75, its wine tax rate was No. 30 at 60 cents and its beer tax rate was No. 43 at 11 cents.

Rhode Island’s state and local cell phone tax rates as of July 1, 2012, were 6th highest in the U.S. at 14.68 percent. Comparatively, Nebraska’s were highest at 18.67 percent and Oregon’s were lowest at 1.85 percent.

To see the full Tax Foundation report, visit: www.taxfoundation.org.

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