RI senators unveil $36M tax cut proposal for businesses. What's in it.

Patrick Anderson, The Providence Journal
·2 min read
The Senate Judiciary Committee heard testimony Tuesday night for a bill to allow state-funded abortion coverage in the health plans offered to both state employees and Medicaid recipients.

Senate leaders Thursday unveiled a roughly $36-million tax cut proposal for businesses that would eliminate local tangible taxes on equipment for most small businesses.

Senate President Dominick Ruggerio in Feburary said he supported a cut to local tangible property taxes and announced the plan at a Northern Rhode Island Chamber of Commerce event Thursday morning.

"This proposal will help Rhode Island’s businesses, and particularly our small businesses," Ruggerio told the Chamber, according to a copy of his prepared remarks.

More: Does Rhode Island owe you money? Check out the latest unclaimed funds database

What would the proposal do?

The proposal would exempt the first $100,000 of property from the tangible tax levied by cities and towns. According to a Senate analysis, that would mean 85% of businesses in the state would no longer have a tangible tax bill.

Municipalities levy tangible tax on non-real estate business property, including computers, furniture and other equipment.

Under the Senate plan, the state would reimburse cities and towns for their lost tangible tax collections, estimated to be $36.6 million combined.

The tangible tax cut is backed by the business-backed Rhode Island Public Expenditure Council, which said in Providence $100,000 worth of computer equipment would result in a $21,483 tax bill.

"Tangible tax is the most onerous tax on businesses," RIPEC Executive Director Michael DiBiase tweeted Thursday. "Very high rates in many communities. Applies to computers, furniture, equipment that often lose value quickly. Burdensome compliance. Uneven administration. Discourages investment.

The tax cut legislation is being introduced in the Senate by Sen. Melissa Murray, D-Woonsocket.

“The tangible tax is both a financial and administrative burden for small businesses. Complying with it is complex, and it’s also an enforcement burden for cities and towns," Murray said in a news release. "Eliminating this tax for smaller businesses will give them genuine, much needed relief. It’s a way our state can provide help for the small businesses that support our cities and towns, make our communities unique, and most importantly, employ Rhode Islanders."

This article originally appeared on The Providence Journal: Business tax cut proposal for tangible property proposed in RI