While a special joint legislative commission studies Rhode Island’s sales tax — including the question of whether to repeal it entirely — the state already has made strides in some important areas.
First, as of Dec. 1, Rhode Island became the first state in the nation to exempt original and limited edition art works from the sales tax.
There already were nine tax-free arts districts in Rhode Island, including in Newport, Tiverton and Westerly. The latest legislation expanded the exemption to cover the entire state.
The initiative, called the “State of the Arts,” is aimed at branding Rhode Island as an arts haven, supporting local artists and stimulating the local economy.
“The initiative will help bring people who are buying art into our community,” said Randall Rosenbaum, executive director of the Rhode Island State Council on the Arts.
The arts council helped to determine what types of art would be included in the exemption, which range from the expected — paintings, prints, photographs, sculptures, traditional and fine crafts — to the not-so-expected, including films, books and other writings, plays and musical compositions.
The definition is broad, and artists are urged to apply to the state Division of Taxation for the exemption if they think they might be eligible, Rosenbaum said during a recent local workshop.
Senate President M. Teresa Paiva Weed, D-Newport, who led the legislative effort, said she believes it will mean economic vitality for the state. State statistics show there has been a 16 percent growth in the creative sector in since 2011, resulting in 770 new jobs, she said. More than 13,000 people work in the arts in Rhode Island, she said.
More than $92 million is spent each year in Rhode Island on art in all its forms, Rosenbaum said. In Newport County alone, we know there are many artists and galleries that will benefit from the exemption, which went into effect just in time for the holiday shopping season.
Another exemption went into effect on Sunday aimed at making Rhode Island more competitive, particularly on its borders.
Wine and spirits bought at Rhode Island liquor stores no longer carry the 7-percent sales tax. Last summer, the state increased the excise tax on alcohol, which is generally paid by distributors who import alcohol to the state.
The state is expected to lose about $7.2 million in revenue without the sales tax on wine and spirits, but gain $6 million by increasing alcohol excise tax rates.
The General Assembly enacted the change to help Rhode Island liquor stores be more competitive with businesses in Massachusetts, which repealed its sales tax on beer, wine and liquor in 2011.
Unfortunately, in Rhode Island, the tax remains for beer and other malt beverages. We hope that is an oversight that will be corrected in the next legislative session.
The 13-member Special Joint Legislative Commission to Study the Sales Tax Repeal, which has held six hearings so far, is expected to report its findings and recommendations to the General Assembly by Feb. 6.
This editorial appeared Friday in the Newport Daily News.