R.I. sales, personal income taxes down in Q1

ALBANY, N.Y. – Rhode Island is among the states facing an increasingly difficult fiscal picture due to a drop off state sales tax collections in the first quarter of 2008, a study released last week said.

Researched by the Albany, N.Y.-based Nelson A. Rockefeller Institute of Government, the report said that Rhode Island is one of 21 states that have reported collections for the quarter that decreased from the same period in 2007. In total, 36 states have reported, the study said.

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The study said that Rhode Island’s sales-tax collections fell 5.5 percent. Also troubling was news that personal income tax collections dropped 12.2 percent from the first quarter of 2007. While corporate income tax rose 2.5 percent, the study said that Rhode Island’s overall tax collections dropped 6.2 percent.

Massachusetts and Connecticut both saw their total tax collections rise during the period by 9.6 percent and 1.9 percent, respectively. While both states saw drops in sales- and corporate income-tax collections, those losses were offset by increases in personal income tax revenue.

“The widespread declines in the sales tax are a leading indicator of economic weakening, and a harbinger of further state budget troubles,” Don Boyd, one of the study’s authors, said in a statement to Bloomberg News. •