Rhode Island Senate Bill S3135

Rhode Island 2024 Regular Session

• Introduced: 6/4/24
• Refer: 6/4/24

Caption

Allocates five percent (5%) of revenues from the local meals and beverage tax to the Rhode Island Semiquincentennial (R.I. 250) Commission for the execution of its duties from July 1, 2024 to December 31, 2026.

Impact

The passage of S3135 is set to primarily affect the financial obligations of restaurant owners and consumers in Rhode Island. By imposing an additional 1% tax on meals and beverages, the bill seeks to generate funds which will be directly allocated to supporting the Rhode Island Semiquincentennial Commission. This commission is tasked with organizing activities commemorating the state's 250 years of history, which is a significant milestone for the community and encourages local engagement in larger state-centric celebrations.

Summary

Senate Bill S3135 introduces amendments to the existing sales tax framework in Rhode Island, specifically targeting the local meals and beverage tax. Introduced by Senators McKenney and Burke, this bill stipulates that a local meals and beverage tax will be levied at a rate of 1% on the gross receipts of all meals and beverages sold within eating and drinking establishments across the state. The implementation of this tax aims to increase revenue streams for both local governments and state initiatives, enabling better financial support for various community programs.

Execution

The actual collection and administration of this new tax will fall under the purview of the Rhode Island Division of Taxation. The bill is designed to commence operations on July 1, 2024, and remains effective until December 31, 2026, during which the specified percentage of collected taxes will be periodically distributed to fund the commissioned activities. This structured timeline gives local officials and businesses a clear understanding of when to prepare for these changes.

Contention

While proponents of S3135 argue that the bill provides much-needed funding for statewide celebrations and local activities that would typically be beyond the capabilities of small towns to finance alone, there may be pushback from local businesses concerned about the increased tax burden. By adding to the existing sales tax, there could be implications for consumer spending habits in the hospitality sector, potentially leading to reduced patronage in local establishments. Discussions are likely to arise about balancing community support with the economic viability of local businesses.