Ruggerio bill would repeal clothing tax
STATE HOUSE — Senate Majority Leader Dominick J. Ruggerio (D-Dist. 4, Providence, North Providence) has introduced legislation to repeal all taxes on clothing and footwear in Rhode Island.
Under current law, clothing or footwear that costs more than $250 per item is subject to Rhode Island’s sales tax. However, current statute also provides that enactment of federal legislation authorizing states to require online retailers collect and remit sales taxes would trigger an unlimited exemption on the clothing and footwear sales tax. Legislation was not enacted at the federal level, but online retail giant Amazon entered into an agreement in January to collect and remit Rhode Island sales taxes as of February 1. Additionally, Article 9 of the Governor’s budget proposal is aimed at collecting taxes from other online retailers and remote sellers.
The legislation (2017-S-0468) removes the conditional language making repeal of the tax conditional upon passage of federal legislation, and reinstates the unlimited exemption that had been in place prior to October 2012.
“Traditionally, Rhode Island has not taxed clothing,” said Leader Ruggerio (D – Dist. 4, Providence, North Providence). “The intent of existing law is that the clothing tax be repealed when the state begins capturing online sales taxes, which is happening. In light of the new revenue now coming in from Amazon and anticipated from other online retailers, it is time to return to the tradition of no sales taxes on clothing.”
He continued, “Removal of the tax would give Rhode Island retailers a competitive advantage over retailers in neighboring states. It would also remove a burden facing some individuals who may have difficulty affording it, such as a young professional just starting out who needs an appropriate wardrobe for the workplace.”
The bill, which is cosponsored by Senate Minority Leader Dennis L. Algiere (R – Dist. 38, Westerly, Charlestown, South Kingstown) and Senators Michael J. McCaffrey (D – Dist. 29, Warwick), Hanna M. Gallo (D – Dist. 27, Cranston, West Warwick), and Erin Lynch Prata (D – Dist. 31, Warwick, Cranston), has been referred to the Senate Committee on Finance.
For more information, contact:
Greg Pare, Press Secretary for the Senate
State House Room 314
Providence, RI 02903