Guest MINDSETTER™ Rep. Solomon: The Sales Tax Holiday Weekend
Thursday, January 28, 2016
For the past couple of years, we’ve all heard a lot about what we can do, what we’ve done and what we should be doing to make Rhode Island more business-friendly.
Every idea, every scenario is fraught with debate. An effort to help businesses invariably means a hit to the state’s revenue, so we’re always looking to find a balance.
This year, I’ve submitted legislation that would create a sales tax holiday weekend — similar to the one they have in neighboring Massachusetts. For two days in August, items below $2,500 would be exempt from the state’s 7 percent sales tax.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThis idea, too, has seen its share of controversy. Some question the benefit to small business. Most want to know how the loss in revenue would be made up.
The fact is we’re already seeing a loss in sales tax revenue to the internet. Remote sales, which are usually tax free, have been experiencing double digit growth almost every year. And the ease at which those sales are made right on our phones (along with easy comparison shopping) has driven so many retail purchases out of the stores and left Main Street in the dark.
The sales tax weekend gives our legislators the opportunity to create genuine consumer incentive and send a strong message to businesses and citizens that it does matter to us where you spend your money. And in today’s world of unlimited online shopping options, those state incentives are more important than ever.
For years, Massachusetts has understood this. Even before the internet boom, they had to face the realities of living next door to tax-free New Hampshire. The result of their efforts is that people are leaving Rhode Island to make their purchases in the commonwealth. It’s time to draw people into our state rather than send them away. Here’s an instance where Rhode Island’s size can be an asset. We have two states within short driving distance. We can encourage citizens of Connecticut and Massachusetts to come here to spend their money. It will work better for us a tool to draw people into the state than it would in larger states.
Not only would this help our businesses, but it would help our people too — particularly our low-income citizens. Sales tax is regressive, no doubt about it. It disproportionately hurts low-income families that may not have credit cards or online access. Higher-income families can and do avoid sales taxes. You can just make the purchase on your phone and, presto, a 7 percent discount in the form of no sales tax, with the item being brought to your door, sometimes the very next day.
It’s no secret that sales tax laws discriminate against local employers, but until Congress grants states the authority to go after online retail sellers, it will continue to be a problem. Congress drags its feet because it’s a state problem, so they feel they don’t have to worry about it.
The fact is that a sales tax weekend can and will help sales and foot traffic for our local retailers. And the loss in revenue would be made up by the extra traffic generated in places like our restaurants, which would not be affected by this tax exemption. If you agree, then let your legislators know that this is something that’s important to business and to those who patronize those businesses.
Rep. Joseph J. Solomon Jr. is a Democrat representing District 22 in Warwick.
Related Slideshow: 25 Ways to Support Small Businesses in RI
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Grab a Snack 
Shop for Dad-
Shop for Mom 
Shop for Someone Special
Shop for a Difficult Buy
Take a Break
Grab Some Lunch
Even More Lunch!-
Do Something Creative -
Participate in and Event -
Get Some Retail Therapy -
Get Ready for a Night Out -
Grab Yourself a Treat 
Improve Your Space
Out With the Old
Gear Up
Solve a Problem
Don't Forget Fido
Grab a Drink-
Enjoy Local Atmosphere 
Enjoy a Show-
Buy Cool Memorabilia 
Bar Hop
Grab A Late Night Snack-
Pick up New Music
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