CUMBERLAND, RI – Governor Dan McKee today signed legislation that establishes a statewide exemption of $50,000 of tangible property from the tangible personal property tax. The tangible personal property tax is paid by businesses on property like computer equipment, office furniture and equipment.
“As a former small business owner, I know how much of a nuisance this tax is, and how unpopular it is across our state,” said Governor Dan McKee. “I’m glad we’re taking steps like this to make our state more economically competitive and more business friendly.”
“This is a common-sense tax cut for small businesses which will make it easier to do business in our state and incentivize entrepreneurs to invest in better equipment and technology,” said Lieutenant Governor Sabina Matos. “With today’s bill signing, we’re one step closer to an economy where any Rhode Islander with the dream and drive to start their own business can succeed.”
“The tangible tax is both a financial and administrative burden for small businesses. Complying with it is complex, and it’s also an enforcement burden for cities and towns. Eliminating this tax for smaller businesses will give them genuine, much-needed relief. It’s a way our state can provide help for the small businesses that support our cities and towns, make our communities unique, and most importantly, employ Rhode Islanders,” said Senator Murray (D-Dist. 24, Woonsocket, North Smithfield).
“In order to have a healthy and thriving Rhode Island economy, we need to do everything in our power to remove the onerous obstacles that too often choke or stifle our state’s businesses. I am pleased that this bill was included in the state budget, which in turn will eliminate a significant obstacle and frustration for the majority of our state’s small businesses, all while saving our small businesses valuable time and dollars,” said Rep. Voas (D-Dist. 57, Cumberland, Central Falls).
The legislation provides a $50,000 exemption to all tangible tax accounts beginning in the 2024 tax year. Those with more than $50,000 worth of tangible assets would have to pay the tax on the assets above $50,000 but would still receive an equal amount of tax relief. The legislation would completely wipe out the tangible tax for 75 percent of Rhode Island businesses.
Since the tangible tax is a municipal-level tax rather than a state one, the state would reimburse each city, town and fire district annually for their lost revenue, just as it does for revenue they lost from the phased-out vehicle excise tax.
The legislation also requires municipalities and fire districts to cap their tangible property tax rate at the level applied in fiscal year 2024. The tax cap would not apply in the case of municipalities and fire districts that utilize a uniform tax rate for all classes of property.
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