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NEW: Lawmakers Seek to Repeal Sightseeing Tour Tax

Wednesday, February 15, 2012

 

Rep. Karen L. MacBeth and Rep. James N. McLaughlin have introduced legislation to repeal a tax on package tours and scenic and sightseeing transportation services.

The pair said they sponsored the legislation because of the negative effect the tax could have on tours offered by the Blackstone Valley Tourism Council.

“In an economy like the current one, we need to encourage people to visit Rhode Island, to experience the cultural institutions and history, all the while supporting the businesses that employ our citizens and pay taxes that support our state,” said Representative MacBeth (D-Dist. 52, Cumberland). “This tax on those tours is only going to discourage visitors by raising the cost of a visit to our area. And that hurts more than just those who offer tours – lost visitors mean fewer hotel stays, fewer meals bought at local restaurants, and fewer dollars spent at countless other businesses that serve the public.”

The 2011 budget extended the state’s 7-percent sales tax to package tours and scenic and sightseeing transportation services that take place in whole or in part in Rhode Island, effective Oct. 1, 2011. (Transportation that does not involve sightseeing is not subject to the tax.)

The legislation ((2012-H 7199) would repeal the addition of tours and sightseeing packages to the statute on sales and use tax.

Particularly in the Blackstone Valley, which stretches across the state line into Massachusetts, the tax puts Rhode Island businesses at a competitive disadvantage, the legislators said. Rhode Island has the highest such taxes in New England. Massachusetts charges a similar tax, applicable to packaged tours in Boston, at a rate of 5 percent, and Vermont charges 6 percent. Connecticut, Maine and New Hampshire do not levy a sales tax on packaged tours.

“The state is hurting itself with this tax. At a time when we desperately need small businesses to grow, a new tax on businesses that is higher than our neighbors’ tax is only going to make it harder for our businesses to compete,” said Representative McLaughlin (D-Dist. 57, Cumberland, Central Falls).

 

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