Tax & Accounting Blog

Rhode Island Prepared Meals Tax Increasing?

Indirect Tax, ONESOURCE, Sales and Use Tax February 14, 2012

Part of Rhode Island Governor Chafee’s budget includes a possible increase to the meals tax, increasing the rate patrons pay by 2%.  Local restaurant owners are voicing strong opinions against this tax, saying that they already have one of the highest rates in the country at 8%, and a 10% tax would be unacceptable.  They are worried about business being driven away to nearby states with lower rates on prepared food such as Massachusetts at 7% and Connecticut at 6.35%.  Cities currently receive 1% of that tax, and opposing voices say border cities will be hit hardest.