Rhode Island Considers Dumping Sales Tax

TaxConnections Blogger Annette Nellen Posts about Rhode Island maybe dumping sales taxThe State of Rhode Island has a special legislative commission to study the possible repeal of sales tax! That should sound shocking since states with a sales tax typically generate at least 25% of their General Fund revenues from the sales tax. What might lead a state to consider dumping a longstanding revenue generator? Well, we do hear a lot about problems with the sales tax including:

♦ It’s eroding base of tangible personal property in a digital/services world of today.

♦ It’s tax gap generated from e-commerce and catalog sales where many vendors have physical presence (and thus tax collection obligations) in only one or just a few states.

I don’t think these problems are reasons to repeal the tax though, but instead to reform it.

In accordance with Circular 230 Disclosure

Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.

Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.

Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.

Prior to joining SJSU, Annette was with Ernst & Young and the IRS.

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