RI Senate leader seeks repeal of sightseeing tax

The state Senate leader on Tuesday called for the repeal of a new sales tax on sightseeing trips just two months after she and other lawmakers voted to impose it.

Senate President Teresa Paiva Weed, D-Newport, said the tax, set to take effect Oct. 1, will hurt the state’s tourism economy and should be repealed. Paiva Weed said she’ll introduce a bill in next year’s legislative session to do it.

The General Assembly voted two months ago to impose the state’s 7 percent sales tax on tickets for sightseeing tours, including bus and boat tours.

The tax is expected to generate $1.1 million annually. It was one of several legislative actions to balance the state’s $7.7 billion budget, which had faced a deficit pegged as high as $331 million.

Although she voted for it in June, Paiva Weed said Tuesday that she now believes the tax “makes no sense.” She noted that tourism jobs represent nearly 10 percent of the state’s employment.

“We should be doing everything we can to support this vital industry,” she said in a statement. “I will work to ensure that the tax is reversed.”

Paiva Weed’s announcement was welcome news to Karen Oakley, an owner of Newport-based Viking Tours, a family-owned company that operates tourist trolleys, charter trips and bus tours. Oakley said worries about the impact of the tax prompted her to rethink plans to buy two new trolleys and hire extra employees for next summer.

“Tourism is a very competitive business, especially in this economy,” Oakley told The Associated Press. “People can easily go somewhere else, and these taxes have an impact. There could have been other ways to balance the budget without hurting this fragile industry.”

But making up for $1.1 million in lost revenue won’t be easy, said House Speaker Gordon Fox, D-Providence. Fox said he will review Paiva Weed’s proposal, but he isn’t willing to commit to repealing the tax.

Fox said lawmakers endorsed the sightseeing tax – and other new sales taxes on nonprescription drugs, software downloads and smartphone applications – only as a “last resort.”

“It’s a thin budget,” he said. “Are you going to repeal the tax and replace it with another tax? Are you going to replace it with cuts?”

Greg Pare, a spokesman for Paiva Weed, said she hasn’t proposed specific alternatives to the tax. “Obviously that’s something they’ll look at,” he said.

State Sen. Louis DiPalma, D-Middletown, joined Paiva Weed in her statement in calling for the repeal of the tax.

Article source: http://www2.turnto10.com/news/2011/aug/23/2/ri-senate-leader-seeks-repeal-sightseeing-tax-ar-701172/

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