| 1/7/2008 |
Sen. Issa proposes sales tax on luxury clothing items
Legislator hopeful – in face of state’s budget crisis – that bill will pass this year and generate additional $1 million in revenue
STATE HOUSE -- Sen. Daniel J. Issa (D-Dist. 16, Central Falls, Pawtucket, Cumberland) said he has always been pleased to live in a state that exempts clothing from sales tax “because most of our citizens consider clothes a basic, human necessity, like food, and not taxing such necessities is one way government can help citizens who are already taxed pretty heavily.”
At some point, though, he said, “expensive clothing goes beyond being about filling a basic human need and becomes a luxury and I believe that luxury items, including luxury clothing items, should not be exempt from our state sales tax.”
This year, with the state facing a $450 million budget hole, may be the year the legislature passes a bill Senator Issa has introduced yearly for at least the last decade – a bill to impose a luxury tax on expensive clothing.
“I don’t mean to suggest that these aren’t important items, to some people,” said Senator Issa. “I just don’t think it is right for someone to drop $10,000 on a fur coat and be exempt from taxes on that item when there are people in our society who are scraping to put clothes on their kids’ backs and pay their heating bills at the same time.”
Senator Issa, in his legislation, (2008 - S2051), would define a luxury clothing item as a single item costing over $500. Clothing with a price tag of $500 or more would be subject to the state sales tax for the amount over $500.
“It’s still a better deal than you would get in Massachusetts, where sales tax kicks in on the amount of an item over $175, or in Connecticut, where sales tax is applied to the amount of any item over $50,” said Senator Issa.
Senator Issa said he believes enactment of his bill could generate as much as $1 million annually in sales tax revenue and correct what he thinks is a fairness issue – one that allows shoppers from nearby states to avoid their state’s luxury tax by shopping in Rhode Island.
“Most importantly, a million dollars is a figure that would have a significant impact on helping those in our state most in need.”
One important aspect of the legislation, said Senator Issa, is that it would apply the $500 limit to a single purchased item. “In other words, a family out shopping for back-to-school clothing for the children may spend more than $500 total, but there would be no tax since none of the individual items cost more than $500.”
This year, more than any other, Rhode Island lawmakers need to be open to ideas that will generate more revenue for the state, said Senator Issa. “No one wants to talk about raising taxes, and neither do I, really. But this luxury clothing tax will not have a negative impact on the majority of Rhode Island citizens. In my community, for instance, I would guess there aren’t too many residents buying a $600 pair of shoes or a $1,000 Armani suit.”
For more information, contact:
Randall T. Szyba, Publicist
State House Room 20
Providence, RI 02903
(401) 222-2457 |
LEGISLATIVE INFO
