A new bill introduced by a Glocester/Smithfield representative would gradually drop the state’s meal and beverage tax, eventually phasing it out.
Rep. Brian Rea (D) said the effort is aimed at helping families and small businesses struggling under the weight of surging inflation. He said the 1% tax on restaurant food sales adds to the 7% sales tax on groceries and a 5.1% increase in the cost of full-service meals over the past two years.
“With extreme increases in food costs, the recent overall inflationary burdens placed on Rhode Islanders, and the large percentage of employees supported in our food industry, removing the food and beverage tax in Rhode Island is not only responsible, but I would say, necessary,” Rea said. “The hospitality industry is still feeling the ramifications from the pandemic. We need this industry to be robust, especially in sustaining our local economies.”
The bill would call for annual decreases of 0.25% of the tax rate, effective Jan. 1, 2025, running through Jan. 1, 2029. The rate is currently set at 1% on a restaurant’s taxable food sales gross receipts. The tax is collected by the state’s Division of Taxation.
Generative artificial intelligence (AI) assisted a What’sUpNewp journalist with the reporting included in this story.
