State Government Tightening the Screws: Goes After the Use Tax

justin-katz-avatar-smiling

Before one even gets to the tax-increasing provisions associated with eliminating the Sakonnet River Bridge toll, one comes upon this surprising gem in budget article 12.  It was in the governor’s original proposal, but I haven’t seen anybody comment on it.

When reporting the amount of use tax obligation on the Rhode Island personal income return, the taxpayer shall list either the actual amount (from books, records, and other sources), or an amount using a lookup table established by the tax administrator.

Many Rhode Islanders might not know it, but they’re supposed to figure out how much money they save on the sales tax by shopping out of state (or online or through catalogues) and pay that amount along with their income taxes.  Until now, it’s been a bit of a joke, so much so that I’ve previously suggested that if the state government really wants to make Rhode Islanders feel the encroachment on tyranny, officials should start trying to enforce the use tax.

Well, that’s what this new provision does.  You’ll either have to be able to document all of your out-of-state shopping, or you’ll have to pay 0.08% of your adjusted gross income ($8 per $10,000).  The governor’s budget projects $2.2 million in revenue from the provision.

What if you don’t shop out of state?  Wait for the audit, I guess, and somehow prove that you didn’t.

 

Quick addendum:

Some folks in town (a small minority, as it turned out) mocked me for reducing a relatively small property tax increase in Tiverton to zero percent increase.  But sifting through the latest version of the state budget, one gets the impression of a government trying to squeeze every possible dime out of the people who live within the borders it controls.  You’ve got another $40 or so through the now-to-be-enforced use tax.  You’ve got another $16 to register your car.  Starting next year, the gas tax will creep up with inflation.  I’m sure a closer look will find more such tax increases.

It may not seem like much to the insiders and the wealthy, but all of these costs, mounting each year and never receding, quickly begin to have a significant effect on the quality of life that most of us can enjoy.



  • I guess that me publicly calling out our state government, this past winter, about the unenforceable stupidity of our current Rhode Island "use tax" had an impact after all.

  • observer

    Justin, the one penny increase in the gasoline tax and the extra $16 for car inspection are a direct result of no tolls on SR Bridge. You won that one, so congratulations, but please don't complain about tax increases when the self interest and political pull of the people in the East Bay is the cause. Chafee is right on this one, I have to say, but that's politics.

    • MoniqueAR

      RI has the eighth highest taxes in the country. At what point do we say enough is enough and ask our elected officials to live within OUR means?

      • Tommy Cranston

        Never.
        The dopes of this state have voted Kleptocrats in for the last 80 years and I daresay they will do so for the next 80 years.
        The good news is we lose one of our Kleptocrat House members in the 2020 census and that's GREAT news for America. We had 3 when my parents were born. Now we'll be down to 1 in 5 1/2 years. Good news.

    • Warrington Faust

      Interestingly, rather than increasing fees for car inspection, many sates are eliminating the inspection. Citizens see it for what it is, a cash cow. They have found that almost no accidents are caused by faulty equipment.

  • justinkatz

    I would have opposed these taxes to pay for bridges, as well. There's plenty of money in the state's budget to reorder priorities, rather than simply take more money.

    The self-interest (and concern for the local economy) of the East Bay is behind the removal of the tolls. Government officials willingness to keep tightening the screws on the people is behind the tax increases.

  • Patrick

    As for that use tax and proving what you spent out of state…here's an idea. Set up the state tax system in a way that I'm DISINCENTIVIZED from shopping in Mass! Make it so I want to shop in RI. Based on the gas tax difference, who wouldn't prefer to buy gas in MA when there can be as much as a 10 cent per gallon difference and if you're in Attleboro or Seekonk anyway, might as well fill up there. How idiotic is that where the government has realized that people want to shop in MA because of the tax difference, so they impose ANOTHER tax on citizens to make up the difference? Why not simply make the RI tax system better than the one in MA and then people will want to shop in RI.

  • Brian

    I would have actually favored wider use of tolls myself. i think that is where we're headed. so i think it was wrong to single out the more pedestrian work day sakonnet river bridge from the entire state, but if we tolled 95 to pay for those mausoleums of train stations and if we used time of day rate adjustment you could actually probably make some efficiency gains given the new toll collecdtion technology. paying for focused infrastructure with more direct user fees isn't necessarily a bad idea. tying higher inspection rates to maintaining the sakonnet bridge gives no price signal.

    i'm open to those who distinguish it as part of a roadway system since we have essentially determined to make aquidneck auto accesible. there is still a ferry landing in portsmouth at the foot of the mount hope bridge. maybe we can go back. but that begs the question of how many approaches are supposed to be free. the pell/jamestown bridge boondoogle, without the highway connector from 95 to the jamestown bridge certainly isn't worth the investment. its time to build a toll road from 95 to the bridge with access to URI. or is it just quaint to have a unversity no one can get to.

    its nice to see people stand up for their parochial economic concerns and make valid arguments about being singled out, but it is a shame that they cannot make the case that the overhang of infrastructure maintenance for these bridges is a priority that should outweigh unnecessary spending, not auger more taxes. if the bikepath over the washington bridge had been canceled that would net 15 years of maintenance. if deepwater wind were canceled that would net to ratepayers $400 million in spending capacity that either would be released to augment taxes directly or at least would mitigate these tax increases.

    i assume that all the folks in portsmouth who take property taxes from prudence island so williingly will now support making the ferry free . . . that's our business lifeline and the only way to get there. oh right, that would be silly.

    • Guest

      Perhaps if the gas tax went to the roads and bridges as it was supposed to we wouldn't have these uninformed discussions.

  • John

    Patrick:

    Your idea is exactly what the General Assembly should be doing. Unfortunately, it is far, far beyond their separate AND combined mental capacity to think in those terms…IT MAKES SENSE. They don’t know anything about that.

  • Max D.

    Rumor has it that Chafee is already in negotiations with Duval Patrick to move those EZ Pass trackers to the entrances of Sam's Club and Walmart in Seekonk.

  • With regard to the question of tolls, vs. taxes, vs. whatever else is possible, technological advances, and governmental controll freak instincts probably make the total privacy nightmare of a mileage tax inevitable at some point in our relatively near future.

    • Guest

      Only if you are a sheep.

  • Dave F.

    Our ‘leaders’ on Capitol Hill are absolute experts at increasing the levels of legalized extortion. They seem like complete morons at anything else. Of course, all this extortion money is used to pay off their special interests groups (unions mainly) and thus ensure that the special interests keep voting them back in, again and again and again………. It’s a vicious cycle with no end in sight.

    • Max D

      On one level I agree with you Dave but they do what they want to the detriment of the majority yet they keep getting elected. Tell us again who the morons are?

  • Guest

    Max out your exemptions and then delay payment. Starve the beast…

  • Rhode Island will suck it out of the taxpayers, until the taxpayers are outnumbered by the takers. Then what. The General Assembly has no skill as future forecasting as to the detriment their poor decisions have on Rhode island economics. They are in way over their heads and they keep digging. Hmm.

  • Gridlocked

    It's amazing that Projo could miss this item in the budget. I don't shop out of State – and await an auditor to prove otherwise.

    Also regarding the loss of revenue from the Sakonnet toll where exactly was that money going to be spent? The Sakonnet is brand new and won't require any maintenance for a decade or more plus there must have been something in the annual budget for the maintenance of the old Sakonnet. The toll on the Sakonnet was intended to dump the maintenance costs of the Jamestown onto the East Bay.

    Brian makes a great point re DeepWater. That scam makes 38 Studios look like a great deal. 2 special State laws – one directing National Grid to accept the deal in exchange for a 3% kickback which is not allowed by deregulation law the second forcing the PUC to accept the deal plus $100 million in hidden fees for the sea to land power cable that will show up on our bills somehow.

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