State Government Tightening the Screws: Goes After the Use Tax

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.

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