State Affairs

Rhode Island needs to be more competitive when it comes to business taxes. The Chamber is focused on demonstrating a link between a simple and predictable tax code and Rhode Island’s ability to grow our economy.
Sales Tax
The Chamber remains opposed to any broad expansion of the state’s sales tax. We firmly believe that any sales tax increase would depress spending activity in what is already a sluggish economic recovery for the state.

Corporate Income Tax
The Chamber will support a reduction or elimination of Rhode Island’s corporate income tax rate. Currently at 9%, the state’s corporate income tax rate is one of the highest in New England.

Estate Tax
Rhode Island still remains uncompetitive both with other New England states as well as states across the country in regards to the Estate Tax. The Chamber will support raising the current $850,000 exemption level.

Project Status Restoration
The Chamber would support restoration of a limited project tax sales status exemption.

Federal health care reform law mandates that each state set up a health insurance exchange by 2014 or allow the federal government to create one if they refuse to comply. In 2011, Rhode Island was the first state to secure $58 million in federal funds to create the Exchange which is intended to provide a marketplace for individuals and small businesses to purchase insurance.

The Chamber will advocate for the following principles in regards to creating an effective Health Exchange:
• Exchange should enhance, not restrict, employer choice
• The ability to purchase products outside the Exchange must be preserved
• Exchange should foster flexibility, innovative products and marketplace solutions
• Because the Exchange must be self-sustaining, the state should create the most efficient model possible to minimize employer assessments
• Retain small employer market with under 50 employees

Nursing School
The Chamber supports authorization for the construction of a new joint nursing school between the University of Rhode Island and Rhode Island College. The new school is proposed to be built in the Knowledge District.

SBIR Funding
The Chamber supports measures to enhance the number and quality of Rhode Island applicants for Small Business Innovation Research (SBIR) and Small Business Technology Transfer Program (STTR) programs, both of which are proven to spur growth and innovation for small businesses.

Student Loan Tax Credit
The Chamber supports the creation of a tax credit for state residents who attend college in Rhode Island and remain in the state upon graduation.

The Chamber will continue to work with state leaders in ensuring implementation of the pension reform measures passed last fall, which created a fiscally sound and appropriately funded pension system.

The Chamber also stands ready to partner with the Governor, Treasurer, the General Assembly and municipal leaders in continuing this reform effort at the City and Town level.

The Chamber is focused on playing a constructive role in creating and implementing a budget that will help to stimulate job creation, business development and the overall economy.

Adding table games at Twin River will be on the ballot this year for voters. Given the current economic environment and understanding that this is the third largest source of revenue for Rhode Island, the Chamber will work to understand the implications of the issue and engage our membership in formulating a response when a specific proposal.

E-verify mandate
The Chamber has opposed this measure, which was enacted by Executive Order last year, and requires Rhode Island businesses to check the immigration backgrounds of workers using the electronic program E-Verify.

Worker Protection and Job Loss Notification Act
The Chamber has historically opposed this measure, which if enacted, will impose very onerous obligations on large companies (over 75 employees) in the event that the employer was forced to implement a reduction in the workforce, including extended notice requirements with strict penalties.

Independent Contractors
The Chamber will continue to oppose any measure which will set up a definition for independent contractors unnecessarily exceeding the federal IRS definition.

Biweekly Pay
The Chamber will continue to support legislation that will allow Rhode Island employers to pay workers bi-weekly. Despite limited passage during the last legislative session, Rhode Island is the only state in the nation which mandates that all non-exempt private sector workers be compensated every seven days.

Extended Producer Responsibility
Opposed by the Chamber during the last legislative session, the measure seeks to mandate highly punitive recycling and disposal restrictions on manufacturers of certain consumer products.

To keep pace with the regional competition, Rhode Island must move forward with enhancements at TF Green Airport through the implementation of the airport’s Master Plan. The Chamber supports this effort.

GPCC’s Government Affairs Team advocated on behalf of pro-business legislation or amendments regarding a number of bills that were considered in the 2011 legislative session—bills that had the potential to profoundly affect the Rhode Island business community.We would like to take a moment to reflect upon the status of proposed legislation and the ultimate outcomes

Sales Tax Expansion of $165 Million: Not Enacted

Strongly opposed by the Chamber, the sales tax expansion was limited to five new items, totaling only $17 million. The corporate minimum tax, however, is now extended to LLPs and LLCs.

Combined Reporting Taxation: Not Enacted

Strongly opposed by the Chamber, the tax measure would have hurt local companies with multi-state affiliates that employ significant numbers of people in Rhode Island and have property or headquarters operations.

Taxation of Digital Goods and Services: Not Enacted With Overreaching Language

Strongly opposed by the Chamber, the original measure would have placed Rhode Island as the very worst state in the nation regarding sales tax policy on digital goods and digital automated services typical to cloud computing.

Route 195 Development Commission: Enacted

Strongly supported by the Chamber in its amended form, the legislation will allow an expedited framework for growing the knowledge economy in Providence in accordance with local zoning and development regulations. Further, the measure allows Johnson and Wales University to purchase irregularly shaped surplus highway parcels and begin immediate construction in the Knowledge District.

Job Development Act Repeal: Not Enacted

Strongly opposed by the Chamber, the measure would have nullified prior agreements with major employers that grow and create jobs in Rhode Island.

Personal Income Tax Hike: Not Enacted

Strongly opposed by the Chamber, the measure would have turned the clock back on the significant progress made over the last few years in driving down the punishing personal income tax rates paid by Rhode Island’s high wage earners.

Heath Benefit Exchange: Not Enacted

Supported by the Chamber, preliminary planning to lay the ground work for the 2014 implementation of mandatory federal health care legislation was stalled over abortion language.

Education Funding Formula: Enacted

Strongly supported by the Chamber, the measure affirms the redesign of local aid apportionment to fund public schools.

Extended Producer Responsibility: Not Enacted

Strongly opposed by the Chamber, the measure would have mandated highly punitive recycling and disposal restrictions on manufacturers of certain consumer products.

Bi-weekly Pay – Enacted (on a limited basis)

Supported by the Chamber, the measure will allow certain private sector companies to adopt the same bi-weekly payment practices as the public sector.

Independent Contractors Definition: Not Enacted

Strongly opposed by the Chamber, the measure would have set up a definition for independent contractors unnecessarily exceeding the federal IRS definition.

Retiree Health Care For Public Employees: Enacted

Supported by the Chamber, the measure will allow cities and towns to move age-eligible municipal retirees onto Medicare, thus generating significant cost savings for taxpayers. Providence, in particular, will save more than $11 million annually.

Pension and Disability Reform: Enacted

Supported by the Chamber, the measure will add more stringent provisions to disability pensions and give cities and towns the tools to enact meaningful pension reform.

Unemployment Insurance Reform: Enacted

Supported by the Chamber in its amended version, the measure will remedy the now depleted unemployment insurance trust fund by aligning benefit levels with Massachusetts and Connecticut while mitigating wholesale new tax increases on Rhode Island employers. The original version of the legislation had been much more punitive to employers.

Gaming Revenue Constitutional Amendment: Enacted

Supported by the Chamber, the measure will allow a public referendum on expanding casino operations to include table games.

Estate Tax Exemptions: Not Enacted

Supported by the Chamber, the measure would have set graduated tax rates for estates that reach and exceed the $850,000 benchmark.

Project Status Repeal: Enacted

Opposed by the Chamber, the measure eliminates certain tax incentives for company expansion.c

The General Assembly will reconvene in the Fall to consider issues relative to General Treasurer Gina Raimondo’s pension reform plan. Please be sure to stay engaged in the discussion and familiarize yourselves with the key issues of equity, fairness and transparency being studied over the course of the summer. Further information can be found at SecurePathRI.org.