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RI restaurant industry not happy with Chafee tax proposal

February 1, 2012

Rhode Island’s restaurant and hospitality industry is wasting no time in denouncing Governor Lincoln Chafee’s proposal to hike the restaurant meals and beverage tax by two percent to finance public schools.

In an interview, Bob Bacon, a member of the board of the RI Hospitality Association and co-owner of the popular Gregg’s restaurant chain, told Rhode Island Public Radio that raising this levy would hurt Rhode Island restaurants that border Massachusetts and Connecticut, which have lower rates.

Bacon also said the Chafee hike would also put a crimp in local convention business as conventioneers look for venues in neighboring states.

“I don’t know of any state that will have a 10-percent rooms and meals tax,’’ said Bacon. “People in Rhode Island are already stretched out, particularly people with families….and the elderly.’’

 

4 Comments leave one →
  1. Mister Guy permalink
    February 1, 2012 2:52 am

    “‘I don’t know of any state that will have a 10-percent rooms and meals tax,’’ said Bacon.”

    I do…FL has a sales & tourist development tax of up to 12% for stays of 6 months or less in any hotel, motel, apartment, roominghouse, mobile home park, RV park, condominium or timeshare resort. When staying at a large hotel in Seattle, WA, the sales tax is 15.6%.

    I’m not saying that the Governor’s idea is a great one, but it’s not an absolutely unheard of rate. RI localities desperately need more financial support from the state.

  2. Will permalink
    February 1, 2012 8:19 am

    We are not Florida… not by a long-shot. There are 50 states… we don’t always have to strive to be 50th worst, or 48th worst for that matter.

    People go to Florida with their money to vacation for a while or to retire permanently, in order to escape places like Rhode Island. Florida is warm and inviting (literally and figuratively) and is a great place to have a business or to have fun all year round. While RI has many positive attributes, we’re none of the above. More importantly, you did not mention that Florida also does not have a state income tax, which more than makes up for the higher than average tax you’ve mentioned.

    By the way, the FL Tourist Development Tax you are referring to is a usually 4.5 to 5% charge on the revenue from rentals of six months or less. In other words, it’s a bed tax, intended to garner revenue from people who are not Florida residents.
    This tax is in addition to the state sales tax of 6%. Why do they do it? Because they can. Why can they? Because it’s Florida. Why can’t we? Because we aren’t. Why is that? Because I and thousands of other can drive a mile to Massachusetts and not pay it at all. Why would we do that? Because we value what little money we have.

    For instance, compare the number of restaurants in the City of East Providence, RI and Town of Seekonk, MA. Seekonk has a population only 1/4th the size of E.P., but has far more restaurants, hotels, and other similar establishments.. If you look in the parking lots of those establishments, most of them are from RI. That’s as a direct consequence of relatively bad tax policy in RI vs. MA. People respond to incentive and disincentives. Chafee’s plan would just kill off the few remaining establishments in E.P. and in similar border communities, and as a result, the anticipated revenue, as it always does in these cases, will fall short.

    Even if one accepted the premise that something like this could ever work in RI, just saying to a potential conventioneer or other out-of-state visitor that they would be looking at a double-digit meals tax in exchange for NOTHING of direct positive benefit to them is laughable on its face. How does that attract business or visitors? RI localities don’t need the equivalent of welfare or a bailout from the state. What RI localities need is to be released from mandates by the state and have the real ability to trim their increasing expenses or to reopen bad contracts. Other than that, expect more receivership filings for the foreseeable future.

    • Mister Guy permalink
      February 1, 2012 8:47 pm

      “We are not Florida”

      No, we’re not. FL gets waaaay more revenue in tourism than RI does, and they apparently tax it more as well.

      “you did not mention that Florida also does not have a state income tax”

      LOL…FL’s sales tax is a maximum of 7.5% (compared to 7% in RI) & 9% on prepared food (8% in RI). RI also exempts clothing from its sales tax…FL doesn’t. FL also taxes the sale of admissions, rental property, and the sale of services like commercial pest control & cleaning. FL also taxes various types of alcohol significantly higher than RI does.

      If you love FL so much, then go live there…enjoy the humidity & the hurricanes…good riddance…

      “compare the number of restaurants in the City of East Providence, RI and Town of Seekonk, MA. Seekonk has a population only 1/4th the size of E.P.”

      …which is exactly why they have “more restaurants, hotels, and other similar establishments”…because they have the room for them. I’m no fan at all of the way that East Providence has been run by the fools that have been in office there recently, but come on now.

      “If you look in the parking lots of those establishments, most of them are from RI.”

      You don’t know that at all.

      “RI localities don’t need the equivalent of welfare or a bailout from the state. What RI localities need is to be released from mandates by the state and have the real ability to trim their increasing expenses or to reopen bad contracts. Other than that, expect more receivership filings for the foreseeable future.”

      Baloney. What you want is the ability for state & local governments to run roughshod over negotiated union contracts & a race to the bottom on regulation that’s already failed us at the national level when it came to the financial industry. Neither is going to happen.

  3. scott mackay permalink
    February 3, 2012 9:58 pm

    Much of Florida reminds me of Bald Hill Road with palm trees. Give me New England.

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