Five Questions With: Bruce Lane

Bruce Lane, president of the Rhode Island Association of Realtors, is among those who have criticized recent efforts to attach new taxes in Rhode Island to property transactions. A proposal to tax vacation homes exceeding $1 million was abandoned this year, but the General Assembly has approved a measure that will apply the existing 6 percent hotel tax to private home rentals of less than 30 days, as well as to rooms within private homes. Lane spoke to the Providence Business News about his concerns.

PBN: Why shouldn’t the state’s private homes, rented out for vacations, be subject to the existing hotel tax? What is the issue with the proposed law?
LANE:
You have private parties who rent these properties out. Some of them have bought them for investments. Others have owned them for years and years and need the additional funds to help defray the costs associated with owning these properties. You have to realize that the people who have bought these houses, they’re our secondary housing market. In Rhode Island, that plays a big part of our housing market.

PBN: How big of a market is this in Rhode Island?
LANE:
That’s a really good question. And we don’t know the answer. We’re hoping the governor’s office would know the answer. It will apply if you rent a house for up to 30 days. [If part of a home is rented, one or two rooms, the tax will be 13 percent, including 7 percent sales tax, 1 percent local hotel tax and 5 percent state hotel tax]

PBN: Is the biggest problem the proposed start date of July 1?
LANE: Absolutely. We don’t want to see the bill passed. If it gets passed as of July 1, it will wreak havoc in the rental community. It sends such a bad message about Rhode Island. When people are coming to Rhode Island to vacation, they have X amount of dollars. If they are losing $250 that is $250 they’re not going to spend in shops or restaurants.

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PBN: How is this handled in other New England states?
LANE: Rhode Island is one of 10 states remaining that do not have the tax. But Connecticut and Massachusetts don’t. And the Cape is our competition.

PBN: Are you advocating for the elimination of the proposal, a lowered tax, or a delay in implementation?
LANE: We don’t want it. This is about the Rhode Island housing market and the economy. [We] shouldn’t be playing with this market right now. [We] should be focused on increasing spending in Rhode Island. This delivers the wrong message.

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