2011-09-01 / News

Paiva Weed wants to eliminate tax from tourism

Newport’s delegation to the Rhode Island Senate – President of the Senate M. Teresa Paiva Weed and Senator Louis P. DiPalma – recently announced that they will work to eliminate the sales tax placed on scenic tour and transportation services included in the Fiscal Year 2012 budget and enacted into law in June.

The senators noted that the $1.1 million provision impacts one of the state’s most important industries: travel and tourism. The budget extends 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.

The Senate weighs the merits of the state budget in its entirety, and the sales tax expansion was among the package of tough decisions included.

“The budget enacted in June represents many difficult decisions,” Paiva Weed said. “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.”

If tourism didn’t exist in Rhode Island, each household would pay $1,349 more in taxes to maintain the current level of state and local tax receipts, the Global Insight study concludes. Each visitor creates about $134 in tax receipts, $78 of which go to state and local authorities. It takes only 185 visitors to pay for one Rhode Island public school student for a year.

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