Rep. Solomon Bill Would Set August Tax Holiday

Warwick, RI — Rep. Joseph J. Solomon Jr. (D-Dist. 22, Warwick) announced Tuesday that he’ll pre-file legislation establishing a sales tax holiday for the weekend of Aug. 6-7, 2016.

The tax holiday, designed to give local businesses an economic boost, means no excise or sales taxes would be collected on sales of tangible personal property, according to a release from the Legislative Press and Public Information Bureau.

“It’s time that we give something back to the people of Rhode Island,” said Solomon. “A Rhode Island tax holiday would attract many to the state, and the loss in tax revenue would be made up by the money those people would spend in places such as restaurants, which would not be tax exempt.”

Solomon’s bill, which he plans to introduce on the first day of session Jan. 5, would exempt items below $2,500 from the state’s 7 percent sales tax. The holiday would not apply to sales of telecommunications, tobacco products, gas, steam, oil, electricity, motor vehicles or motorboats.

Several states currently have sales tax holidays, including Massachusetts, which also falls on an August weekend.

Most jurisdictions use the holiday to exempt clothing and back-to-school supplies from sales tax. Since clothing is already sales tax-exempt inRhode Island, Solomon’s legislation would be modeled on the Massachusetts tax holiday, which currently exempts all taxable items below $2,500. 

“A sales tax holiday can provide a well needed break for people to buy some necessities,” said Representative Solomon. “And it benefits business people by sparking economic activity. We all know that Rhode Island is a difficult place for small business. We’ve committed ourselves to doing what we can for small business owners. The loss of a weekend of tax revenue would be worth it for the small businesses in this state who continue to struggle.”