PROVIDENCE – The R.I. Department of Revenue today released an analysis of U.S. Census Bureau data for fiscal year 2006 that places the state 11th-highest in the nation in terms of the state and local tax burden as a percentage of personal income, driven in large measure by the state’s property tax levels.
The report, released by the Office of Revenue Analysis (ORA) under the direction of Gary S. Sasse, director of the Revenue Department, ranks Massachusetts 37th highest in terms of total tax burden, while Connecticut placed 20th in the analysis.
In breaking down the numbers, the ORA found that while $119.79 of every $1,000 of personal income went to the state and municipalities through income, property and sales taxes (including state and local corporate income taxes), the taxes that ranked the state the highest relative to the rest of the nation were property taxes. As a percentage of $1,000 of personal income, property taxes yielded $48.32 for the government, putting Rhode Island at sixth place in the nation. That compares with $37.36 in Massachusetts (17th place) and $43.76 in Connecticut (eighth place).
The state and local individual income tax collected 2.61 percent of personal income, putting the state in 24th place nationwide. Massachusetts individual income taxes totaled 3.62 percent of personal income (good for seventh place), while Connecticut personal income tax came to 3.34 percent (11th place).
General sales taxes took $21.87 of every $1,000 of personal income in Rhode Island, good for 38th place in the nation. Massachusetts residents saw $13.83 of every $1,000 in income go to sales tax (46th place), while Connecticut residents contributed $17.59 of every $1,000 in personal income to the state’s coffers in sales tax (41st place).
The final group of taxes measured – state and local corporate income taxes – saw Rhode Island land in the middle of the 50 states and Washington, D.C., with $4.35 of every $1,000 in personal income allocated to the government, ranking the state 28th. Massachusetts collected $6.41 of every $1,000 in personal income in corporate tax (10th place), and Connecticut collected $3.67 (36th place).
Gov. Donald L. Carcieri, in commenting on the study, said that, “While Rhode Island’s tax burden is still far too high, especially in comparison to our neighbors in Connecticut and Massachusetts, we have begun to gain a little ground … Rhode Island’s elected leaders must now build on this progress and continue working to reduce the state’s overall tax burden. … We must eventually bring our tax burden more into line with our primary competitors.”
The study comes nearly a week after a similar report in Wisconsin ranked Rhode Island 12th-highest in the nation for the percentage of personal income given to state and local government in taxes (READ MORE).
