8/24/11

Taxing Tourism Not a Winner for RI

The targeted sales tax legislation that did become law this spring (digital software downloads, over-the-counter medicines, and a tax on tourism services) is now causing problems based on the vagueness in the language provisions of the law itself, and will undoubtedly prompt lawmakers to revisit the legislation. In doing so, they should scrap the tax on tourism services, which has been revealed to be full of holes on just what’s taxable. Taxing tourism is a bad idea to start with and is on a par with the misguided hikes in state beach parking fees. It does RI no good to make people, many of them out-of-state visitors, pay more to enjoy themselves while choosing to spend their money here. Inevitable grumbings about being shaken down by the Ocean State over special sales taxes and fees will move some of them to go elsewhere next time and influence others on not visiting us in the first place.

I wonder how clear the law about taxing software downloads is proving to be, as most people don’t understand what this entails.

Confusion and second-thoughts about less than a handful of specific sales tax increases, as we’re now seeing, are nothing in comparison to what would have happened had the General Assembly accepted the Governor’s plan to tax a host of new items and services, at two rates. In light of the tourism services sales tax bite, thanks is again in order to our legislative leaders for not taking us on that misguided path.