NEW: Newport Senators Call for End to ‘Tourism Tax’
Tuesday, August 23, 2011
The two state senators representing Newport are calling for the elimination of the new sales tax imposed on scenic tours and transportation services, saying the move adversely affects one of Rhode Island’s most important industries—travel and tourism.
“The budget enacted in June represents many difficult decisions. While this revenue helped to close the budget gap, in the months since enactment of the budget we have heard from many in the tourism industry about the unintended consequences of this provision. I will be introducing legislation to repeal this provision early in the 2012 legislative session, and advocating for its passage,” said Senate President Teresa Paiva Weed, D-Newport.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTUnder the new budget—which passed the Senate—$1.1 million in new revenues would be raised by extending the state’s one percent sales tax to package tours as well as sight-seeing transportation services. It takes effect Oct. 1.
Tourism critical to economy, state budget
Paiva Weed noted that travel and tourism make up 5 percent of the state’s GDP and 9.2 percent of total employment. “Instituting a tax detrimental to tourism makes no sense, and I will work to ensure that the tax is reversed,” she said.
“Rhode Island can boast of more than 100 beaches and 400 miles of shoreline, one of the largest concentrations of historic landmarks in the United States, a first-rate arts scene and some of the finest dining in the world. It is little wonder that tourism is one of our major industries,” added Senator Lou DiPalma, D-Newport.
“Investment in this industry pays dividends as dollars from out of state flow into our world class destinations, such as Newport, and support local and state priorities while alleviating pressure on local and state taxpayers. The tax on tour packages presents a disadvantage to local tour companies, and we should be giving them every advantage we can.”
The two senators publicized results for a Global Insight study which shows that without a tourism industry, each Ocean State household $1,349 to maintain the current level of state revenues. Each visitor results in $134 in tax receipts, $78 which go to state and local authorities. Put another way: each batch of 185 visitors pays for one public school student for a year.
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