R.I. commission explores eliminating state sales tax

RHODE ISLAND'S 7 percent sales tax is higher than in Massachusetts (6.25 percent) or Connecticut (6.35 percent). A new state commission will examine what would happen if Rhode Island lowered or eliminated its sales tax.
RHODE ISLAND'S 7 percent sales tax is higher than in Massachusetts (6.25 percent) or Connecticut (6.35 percent). A new state commission will examine what would happen if Rhode Island lowered or eliminated its sales tax.

PROVIDENCE — A state commission created by the Rhode Island General Assembly is exploring the feasibility of reducing or eliminating the state’s 7 percent sales tax, the Associated Press reported Thursday.

The panel, which includes law makers, business leaders and government officials, held its first meeting Thursday at the Statehouse.

Rep. Jan P. Malik, D-Warren, who chairs the commission, says Rhode Island businesses subject to the state sales tax can’t compete with businesses in Massachusetts or Connecticut, where sales taxes are lower.

In addition to weighing the possibility of eliminating the sales tax altogether, the commission will also consider the consequences of lowering the tax or changing the types of products that are subject to it.

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The sales tax generates $900 million for Rhode Island each year, according to the AP report, and eliminating the tax entirely would likely require raising other taxes or cutting state services.

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