Here’s the full list of items Chafee wants sales-taxed
March 11th, 2011 at 11:07 am by Ted Nesi under General Talk
Commenter Katie asked me yesterday whether there was a full list available of which items Chafee is proposing to add to those included in the sales tax.
Yes, Katie, there is – and I’ve got it for you. The list is below and broken down into two sections.
The first section is made up of items the Chafee administration says will be newly taxed at 6%. (He is proposing to lower the basic sales tax rate from 7% to 6% as part of his plan.) The second section is made up of items that will be taxed at 1% as part of Chafee’s long-discussed proposal for that extra supplemental tax.
The full list is posted after the jump. If you have more questions about the budget, do what Katie did and leave them in the comments section for me.
I. Goods and servies to be newly taxed at 6%
- Prewritten computer software delivered electronically
- Corrective eyeglasses and contact lenses
- Nonprescription drugs including medical marijuana
- Newspapers
- Insurance proceeds from destroyed or stolen passenger car as trade-in allowance
- Property or supplies used in the processing or preparation of floral products and arrangements
- Garbage and trash collection including certain waste management and remediation services
- Taxicabs and other road transportation services
- Scenic and sightseeing transportation and support activities and package tours
- Couriers and messengers
- Moving, storage, including warehousing, and freight services
- Photo studios including photographic and portrait photography services
- Pet services except veterinary services including testing laboratories
- Data processing, hosting, and related services
- Facilities support services
- Business support services
- Investigation and security services including locksmiths
- Services to building and dwellings including domestic services, extermination and pest controls services, landscaping services and other support services from commercial providers
Employment agency services - Personal care services including hairdressing salons and personal grooming establishments, diet and weight reducing centers and other personal services
- Laundry and dry cleaning services
- Recreation and Entertainment to be Subjected to Sales and Use Tax
- Membership clubs and participant sports centers including bowling centers but excluding aircraft rental and leasing without pilots and marinas and boat storage
- Amusement parks, campgrounds, and related recreational services including fitness and recreational sports centers but excluding sales by elementary and secondary schools, tuitions and fees paid to fine arts schools and promoters of performing arts, sports and similar events
- Motion picture theaters including those of post secondary educational institutions
- Live entertainment excluding sports and promoters of performing arts, sports and similar events and independent artists, writers, and performers
- Spectator sports except elementary and secondary schools and promoters of performing arts, sports and similar events
- Museums, historical sites, zoos, parks, art galleries and libraries
- Motor vehicle including car washes
- Audio-visual, photographic and information processing equipment
- Electronic and precision equipment
- Commercial and industrial equipment except for manufacturers
- Recreational and sports equipment except for boats
- Furniture, furnishings, and floor coverings
- Household appliances
- Clothing and footwear repair, rental and alterations
- Watch, clock and jewelry repair
- Professional association dues except for alumni associations, parent-teacher organizations, booster clubs, scouting organizations, veterans membership organizations, political organizations, athletic associations, regulatory or administrative associations, property owners’ associations, condominium and homeowners’ associations, tenant associations, and cooperative owners’ associations
II. Goods and services to be newly taxed at 1%
- Agricultural products for human consumption
- Air and water pollution control facilities
- Aircraft, including aircraft rental and leasing without pilots, and aircraft parts
- Banks and Regulated Investment Companies interstate toll-free calls
- Boats or vessels brought in exclusively for winter storage, maintenance, repair or sale
- Boats or vessels generally
- Boats to nonresidents
- Building materials used to rebuild after a disaster
- Casual sales
- Clothing and footwear
- Coffins, caskets and burial garments
- Coins
- Commercial fishing vessels in excess of five net tons
- Commercial vessels of more than 50 tons burden
- Compressed air
- Containers
- Dietary supplements
- Educational institutions rental charges
- Electricity, steam and thermal energy from the Rhode Island Economic Development Corp.
- Equipment for research and development
- Farm equipment
- Farm structure construction materials
- Flags
- Heating fuels used in the heating of homes and residential premises
- Horse food products
- Jewelry display product
- Manufacturers’ machinery and equipment
- Precious metal bullion
- Promotional and product literature of boat manufacturers
- Purchases used for manufacturing purposes
- Renewable energy products
- Rhode Island Economic Development Corporation project status designees
- Rhode Island Industrial Facilities Corporation Lessees
- Sales by writers, composers and artists
- Sales in municipal economic development zones
- Sales to charitable, educational or religious organizations
- Sales of trailers ordinarily used for residential purposes
- Supplies used in on-site hazardous waste recycling, reuse or treatment
- Textbooks
- Total loss or destruction of a motor vehicle within 120 days of tax payment
- Trade-in value of boats and private passenger automobiles
- Transfers or sales made to immediate family members
- Transfers or sales related to a business dissolution or partial liquidation
- Water for residential use
Chafee opted to leave food, prescription drugs, gasoline and “durable medical equipment” (wheelchairs, I think?) off the 1% list after getting a lot of negative feedback about those during and after his campaign.
The bottom line? Rhode Islanders would pay a net $165 million in additional sales taxes in 2011-12 if all these changes passed compared with what they’d pay under current policy (including a 7% basic rate instead of Chafee’s proposed 6%).
Update: A wise reader writes in to note that the fact Rhode Island has so many sales tax exemptions is interesting in and of itself. The state has a total of 82 exemptions, 20 of which have been added over just the past 19 years, according to the Chafee administration.
More: Why Chafee’s sales tax proposal raises more money (as requested by a commenter)
Tags: budget, chafee administration, sales tax, state government
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
I hope when he taxes “coins” he makes a face value exemption. Taxing bullion might just be a bad idea altogether. Actually, a few of these seem like bad ideas. Sales to charities? Insurance proceeds? Transfers to immediate family members? Purchases used for manufacturing purposes? Particularly that one, unless I misunderstand what it means.
Newspapers isn’t a bad idea in general, although it might not be collected for very long. Though I suppose it does answer the question of whether traditional newspapers are likely to survive, at least in RI.
The whole list is quite interesting and raises a host of questions, as you point out. The attack ads write themselves. (In fact, they already did – though I guess technically the Caprio campaign wrote them.)
Between the paywall and the sales tax, this could be a very expensive year for Projo readers. Stick with Nesi’s Notes, folks, which gets subsidized by prime-time CBS programming!
Kathy Gregg asked about legal services; I forgot what the administration’s answer was. (It may have been developed by Richard Licht, a lawyer himself.) Although they’d probably note that his budget continues that 15% across-the-board reduction in legal fees from the state to outside attorneys.
Oh, but not legal services. Never legal services.
I can live with everything except (Heating fuels used in the heating of homes and residential premises)and (Water for residential use). We are getting so ripped off on these necessities of life already that the state of Rhode Island does not have to add insult to injury. Find another way!
P.S. Now the state wants to mandate (UNFUNDED) water meter changes so they can read the meter from the street! Tell them to send their lazy asses around and read the existing meters. Note: the key word here is “UNFUNDED MANDATE” for the struggling cities and towns…………
P.P.S.S. Why does the new tax structure raise more taxes than the existing tax structure?
On the P.P.S.S., good question, KoolKylde – I posted the answer to why it raises more money here:
http://blogs.wpri.com/2011/03/15/why-chafees-sales-tax-proposal-raises-more-money/
One tax I’d like to see them add to this list is political contributions. I don’t see any reason why buying politicians should be tax exempt.
How about a tax on personal injury lawsuit settlements? Plenty of jackpot to go after there.
Or even better, how about reducing spending by the state?
This new governor and the entrenched General Assembly look at working, productive people as serfs. The serfs may rebel soon.
“Transfers or sales made to immediate family members”
I guess that means I have to report any birthday money I give to the grandkids! Is Chafee gong to hire an illegal alien birthday cop to be present at every party?
Mario: Good for you! Great idea to tax political contributions!
I’m no fortune teller but I predict that more people will be making purchases out of state than ever. This state is unbelievably crooked. I say reduce politician’s salaries and pensions and we’ll save a bundle!
Now that would give them a tax write-off that they’d actually deserve.
when the he__ does he think he’s gov. of iraq
he must own a boat cause he don’t want to tax boats,time to cross the boarder
I guess we can’t equate intelligence in the formula for politician or elected official here in Rhode Island. To raise revenue and reduce spending, we shut schools, fire teachers, and we tax everything, even non-prescription drugs such as aspirin which is an over the counter drugs that doctors do in fact prescribe for those with heart problems. Surely there must be someone in that high salaried realm of state government who can justify his salary by coming up with a sensible solution that doesn’t put the burden on the middle class of Rhode Island. Let’s tax the luxuries that the average Rhode Islander cannot afford…luxury boats, second homes, vacations,luxury autos, travel, high incomes and two income families.
I’m surprised they didn’t tax the air we breathe.
This is creating a two tax tier system, the 7% (anyone who believes the tax will drop to the 6% level, I have a bridge to sell you) plus the 1% tax. This creates more layers of government, meaning bigger state government. It also means small business owners will have to pay an accountant more to make sure they are complying with the new tax code. That added cost will be passed on to the consumer. It will be cutting into the small business owner’s profit margin, and increasing his prices making him less competitive.
Remember the 1% sales tax on food from restaurants to little places like Taco Bell? Where is that money being used?
Chafee was elected for four years, the General Assembly gets elected every two, I can not see any legislator backing this plan. He/she would have to explain his or her vote in the next election cycle. There is no comprehensive plan to get the state out of the current fiscal mess, and Chafee knows it.
[...] go to the mailbag. On the topic of Chafee’s sales tax proposal, commenter KoolKlyde asked: Why does the new tax structure raise more taxes than the existing tax [...]
Do you believe that the list of services at the new 44-18-7.3 is exhaustive? The language of the statutes seems to give tax administrator leverage to expand those services in the regs.
Also, you mentioned that the administration said something about legal services. I’ve seen a few people mention that professional services, like those provided by lawyers, consultants, and accountants, are excluded, but I haven’t seen any official language backing up those statements.
I have started a group on Facebook called Rhode Islanders Opposed to Taxes On Untold Services (RIOTOUS) for service providers and Rhode Island citizens that will be adversely affected by the proposed plan to tax services. Please go to Facebook and request to join the group so that we can show the Governor and the General Assembly that we are vehemently opposed to the taxation of services.