Gov. McKee wants to make drinks-to-go here to stay to help small businesses
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Gov. Dan McKee wants to permanently legalize takeout cocktails and cut the state's corporate minimum tax as part of a wide-ranging plan to help small businesses.
McKee, who has prioritized the small business community since becoming governor last year, will include a raft of ideas to boost businesses ranging from home bakeries to bars in his upcoming state budget proposal, he announced Tuesday.
Cost estimates for many of the initiatives were not immediately available.
In addition to the alcohol and tax changes, they would:
• Reduce the interest rate on delinquent taxes by 6percentage points
• Create a motorcycle trade-in sales-tax exemption
• Allow non-farmers to sell non-refrigerated food directly
• Let cities and towns grant tangible property tax breaks to companies without General Assembly permission
Post-pandemic,Rhode Island restaurants, lawmakers want to keep to-go drinks flowing
• Hire a "taxpayer steward" to help business owners and individuals navigate their tax problems
• Expand an underused 2019 tax-credit program that encourages investors to lend to small businesses
• Create a $10-million program to help minority-owned businesses
"We have been hearing from small business that there are unnecessary barriers to their success and investments that are neededfor them to thrive," state Commerce Secretary Stefan Pryor said about the rationale behind McKee's platform. "This package aims at both of those goals."
Rhode Island, like several other states, first allowed restaurant patrons to order alcohol to go under an executive order issued by the governor at the height of the spring 2020 COVID shutdown.
The practice became popular, and last year state lawmakers allowed takeout alcohol sales to continue, but only until March 1.
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At the start of this year New York Gov. Kathy Hochul, like McKee a Democrat who recently ascended from lieutenant governor, proposed permanently legalizing takeout alcohol in that state.
An estimated 65,000 Rhode Island businesses pay the state's $400 corporate minimum tax each year, and business groups have been lobbying to reduce it.
McKee's plan would trim it to $375 per year, still above Connecticut's $275 tax and well below the $465 per year Massachusetts charges.
While cutting the tax rate, McKee also wants to lower the penalty for businesses that have fallen behind on paying their taxes.
His budget will propose lowering the interest on delinquent tax bills from 18% to 12%, bringing it in line with Massachusetts'.
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McKee has special help for home bakers and motorcycle dealers.
To lower the cost of a new motorcycle, he is proposing extending the trade-in sales tax exemption now available to buyers of four-wheeled motor vehicles to the two-wheeled variety.
And he would create a new "cottage food" production license that would allow non-farmers to sell food out of their homes as long as it does not require refrigeration or other temperature control.
"Currently, Rhode Island is the only state in the country that restricts cottage food licenses to farmers," the McKee administration said in a news release.
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In 2019, state lawmakers approved the Small Business Development Fund over the objections of then-Gov. Gina Raimondo, who compared it to the ill-fated 38 Studios deal.
Three years later, the complicated program has not imploded like 38 Studios, but it has not taken off as lawmakers had hoped.
Only one firm, Enhanced Capital, has been approved for tax credits through the fund, and $45 million of the $65 million available is untouched, Pryor said.
McKee wants to expand the program, which uses insurance-premium tax credits, to other types of tax credits so smaller community-based lenders can take advantage of it, Pryor said.
Finally, the $10-million Minority Business Support Initiative would channel dollars into organizations that help minority-owned businesses with things like marketing and technical assistance.
panderson@providencejournal.com
(401) 277-7384
This article originally appeared on The Providence Journal: Gov. Dan McKee wants to make takeout cocktails permanently legal in RI
