2012-07-12 / News

New taxes take effect this month

While the tax on package tours and sightseeing services disappeared on June 30, a slew of new taxes took effect the following day that will affect Rhode Islanders.

Under new legislation passed by the General Assembly and signed into law by Gov. Lincoln Chafee, the tax on cigarettes has increased 4 cents. The tax is now $3.50 for a pack of 20 cigarettes. Also, more cigars will be treated as little cigars for tax purposes, due to a change in the definition of “little cigars.” In Rhode Island, little cigars are treated the same as cigarettes and have an identical tax.

Aside from tobacco products, taxes on rental cars have also increased. The rental vehicle surcharge will now be 8 percent, up 2 percent from its former rate. Finally, the beverage-container tax was expanded to include sports drinks, iced teas and iced coffees. The tax is levied on each case sold by a beverage wholesaler. It is then collected and remitted to the tax division by the wholesaler.

The 7 percent tax on package tours and sightseeing services that went into effect in October was repealed under legislation approved by the General Assembly and signed into law by Chafee.

Other taxes will take effect Oct. 1, including the extension of sales tax to clothing and footwear priced at more than $250, certain pet-care services, and taxicab, limousine and charter-bus services.

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