On Tuesday, June 20, 2006, RIPEC will release its annual report, How Rhode Island Compares – 2006 Edition. This RIPEC report shows how Rhode Island’s state and local tax burden compares to the other 49 states both on a per capita basis and per $1,000 of personal income. This data is based on the most recent data published by the United States Department of Commerce, Bureau of the Census.
According to the RIPEC study, Rhode Island’s tax burden continues to be one of the highest in the United States. The reason for this is primarily due to the Ocean State’s over-reliance on the property tax, which is 45 percent above the United States average. Property taxes accounted for 42¢ of every dollar Rhode Islander paid in State and local taxes, whereas the sales tax paid took 19¢, and the State’s personal income tax accounted for almost 22¢.
Between FY 1994 and FY 2004, Rhode Island’s total tax burden increased from the 19th highest in the Nation to 7th highest. This is in sharp contrast to neighboring Massachusetts where the tax burden declined from 22nd highest in FY 1994 to 31st in FY 2004.
- In FY 2004, Rhode Island’s state and local tax collections of $120.35 per $1,000 of personal income were 9.1 percent above the United States average. Rhode Island ranked 7th highest in tax collections within the nation in FY 2004, up from 19th highest in FY 1994.
- Rhode Island’s FY 2004 property tax burden of $50.38 ranked the State 5th highest, up from 8th highest in FY 1994.
- The State’s income tax revenues of $25.77 per $1,000 of personal income ranked the State 20th highest in the nation in FY 2004, behind Connecticut and Massachusetts.
- Rhode Island’s sales tax collections ranked the Ocean State 36th highest in FY 2004, with $23.04 per $1,000 of personal income, 13.8 percent below the national average. In FY 1994, Rhode Island ranked 40th highest.
In addition to the data presented above, a separate RIPEC comments provides an analysis on the revenue data. It also gives on overview on some of the measures of relative state and local tax and financial burdens that are being used.