R.I. business groups unite against proposed tax hikes

RHODE ISLAND'S BUSINESS COMMUNITY sent letters of opposition regarding proposed tax hikes that would impact some pass-through business owners to the General Assembly on Monday. / PBN FILE PHOTO NICOLE DOTZENROD

PROVIDENCE The Rhode Island business community is voicing displeasure over legislation proposed in the House and Senate that is aimed at raising personal income taxes on some of the highest earners in the state.

One such bill, House bill H.5229, would create a new income tax bracket of 6.99% on taxable income over $500,000. The legislation is sponsored by Rep. Gregg Amore, D-East Providence, who introduced it to the House Finance Committee in late January.

The legislation calls for any tax collected on the income to be deposited into a restricted receipt account to be expended on educational needs for kindergarten through the 12th grade.

The legislation in both chambers would add an income tax bracket for the purposes of state income taxation.

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Since personal income taxes are applicable tax structure for pass-through entities or companies, those business owners who receive income greater than $500,000 would be taxed at the rate of 6.99%.

Another bill being considered, H.5227, sponsored by Rep. Karen Alzate, D-Pawtucket, would add a new state tax bracket with a rate of 8.99% on taxable income over $475,000, effective Jan. 1, 2022. A similar proposal in the Senate, S.326, sponsored by Melissa A. Murray,  D-Woonsocket, is also being considered.

Also in the Senate, there is the proposed bill S.362, sponsored by Tiara Mack, D-Providence, which would add a new bracket with a rate of 10.99% on taxable income over $475.000, effective Jan. 1, 2022.

A coalition of more than 20 business organizations, including 10 chambers of commerce, delivered letters on Monday to members of the House and Senate finance committees, voicing opposition to the proposed income tax hikes. The letters follow testimony from dozens of Rhode Islanders who spoke in opposition to the tax increases last week in House and Senate finance committee hearings.

“With this week’s revenue forecast more than $300 million higher than expected, these tax hikes are completely unnecessary,” said Laurie White, president of the Greater Providence Chamber of Commerce. “We need to focus on building our economy up, getting our workforce back to work and making Rhode Island a desirable place to move or start a business. These tax hikes would have a chilling effect on our recovery and hurt our ability to compete.”

“As a small-business owner, I cannot emphasize how raising taxes now or in the future on already vulnerable small businesses and their owners is absolutely the wrong approach,” said Michael Mancuso, owner of Cartridge World RI and Office Recycling Solutions and chair of the Rhode Island Chamber Coalition. “These tax hikes are aimed at small business owners and will put jobs at risk and threaten to undo the hard-fought gains we’ve made as we struggle to stay afloat.”

“Now is not the time to add an additional tax burden to Rhode Island business and individuals,” said John Simmons, executive director of the Rhode Island Business Coalition. “This tax hike is not needed as the state revenue projections have increased by nearly $342 million over two years. These new estimates show that we don’t need a tax hike – and we certainly don’t need to implement the draconian [Paycheck Protection Program] penalty that [Gov. Daniel J.] McKee has proposed.”

The letters to the House and Senate finance committees were signed by the following organizations:

  • American Council of Engineering
  • Associated Builders and Contractors of Rhode Island
  • Central RI Chamber of Commerce
  • East Bay Chamber of Commerce
  • East Greenwich Chamber of Commerce
  • East Providence Chamber of Commerce
  • Greater Newport Chamber of Commerce
  • Greater Providence Chamber of Commerce
  • Narragansett Chamber of Commerce
  • National Federation of Independent Business
  • Northern RI Chamber of Commerce
  • North Kingstown Chamber of Commerce
  • Partnership for Rhode Island (corporate members)
  • Rhode Island Builders Association
  • Rhode Island Business Group on Health
  • Rhode Island Hospitality Association
  • Rhode Island Lumber and Building Materials Dealers Association
  • Rhode Island Manufacturers Association
  • Rhode Island Partnership for Home Care
  • Rhode Island Public Expenditure Council
  • Rhode Island Society of Certified Public Accountants
  • Rhode Island Staffing Association
  • Southern Rhode Island Chamber of Commerce

Cassius Shuman is a PBN staff writer. Contact him at Shuman@PBN.com.

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