How RI compares State and Local Taxes The Rhode Island Public Expenditure Council today released its 2004 edition of How Rhode Island Compares – State and Local Taxes. See below to read the report. This publication presents a state-by-state comparison of major sources of state and local government tax revenue, including income, sales and property taxes and looks at state and local tax trends in both Massachusetts and Rhode Island over the last two decades. In this latest report, Rhode Island’s State and local tax burden per $1,000 of personal income ranks the Ocean State 6th highest in the U.S., compared to 13th highest in FY 2000, as shown in RIPEC’s previous edition of How Rhode Island Compares. A Tale of Two States
While Rhode Island’s and Massachusetts’ State and local tax burden approximates each other in FY 1982, the data presented in this edition of How Rhode Island Compares – State and Local Taxes reveals a tale of two states that are headed in drastically different directions when state and local tax trends are compared. In FY 1982, there was little difference between Massachusetts and Rhode Island in state and local tax collections per $1,000 of personal income. In that year, Massachusetts’ tax collections per $1,000 of personal income of $120.81 ranked 9th highest or were 9.1% above the national average. In FY 1982, Rhode Island’s State and local tax burden of $119.07 per $1,000 of personal income ranked 10th highest in the United States or was 8.1% above the national average. As shown on Table 1, in FY 2002 (latest national data available from the U.S. Census Bureau), Rhode Island’s total State and local tax burden was the 6th highest in the United States or 9.3% above the average for all 50 states. However, state and local tax collections per $1,000 of personal income in Massachusetts had declined from 9th highest in FY 1982 to 40th in FY 2002. Between FY 1982 and 2002, Massachusetts’ state and local tax burden had declined from 9.1% above the U.S. average to 7.8% below the average state and local tax burden of all 50 states. It should be noted that in FY 1992 Massachusetts’ state and local tax collections ranked 28th highest per $1,000 of personal income. Massachusetts’ decline to 40th as measured per $1,000 of personal income reflects a direct decline in total state and local taxes collected in FY 2002. This decline may have been partially offset by an increase in revenues from charges and miscellaneous general revenues, which are not reflected in the tax data. Table 2 shows all state and local revenues for Rhode Island and Massachusetts per $1,000 of personal income for Rhode Island, Massachusetts and the U.S. Further, as shown on Table 1: Massachusetts’ property tax collections per $1,000 of personal income were 33.7 percent above the national average in FY 1982 and have dropped to 9.1 percent above the national average in FY 2002. In FY 1982, Rhode Island’s property tax collections per $1,000 of personal income were 47.5 percent above the national average and have dropped to 43.0 percent above the U.S. average in FY 2002.
Rhode Island’s individual income tax collections per $1,000 of personal income were 16.6 percent above the national average in FY 1982 and declined to 10.8 percent above the average in FY 2002.
In the Bay State, individual income tax collections per $1,000 of personal income remained considerably higher than Rhode Island over the last two decades. As shown on Table 1, in FY 1982, Massachusetts’ individual income tax burden per $1,000 of personal income was almost 90 percent above the national average. By FY 2002, Massachusetts’ individual income tax collections per $1,000 of personal income dropped to 36.2 percent above the average of the 43 states levying a state income tax. Sales tax collections per $1,000 of personal income in both Rhode Island and Massachusetts remained modest over the last 20 years when compared to other states. In FY 1982, Massachusetts’ sales tax collections per $1,000 of personal income were 33.3 percent below the national average and declined to 42.1 percent below the national average in FY 2002. Rhode Island’s state sales tax collections per $1,000 of personal income were at the national average in FY 1982 and have declined to 10.4 percent below the national average in FY 2002.
Highlights of Rhode Island’s State and Local Tax Collections Rhode Island’s total State and local tax collections were $113.63 per $1,000 of personal income in FY 2002. Fiscal year 2002 collections were 9.3% above the national average ($103.98), placing Rhode Island 6th highest among the 50 states.
Rhode Island’s property tax collections were $45.86 per $1,000 of personal income in FY 2002. Fiscal year 2002 collections were 43.0% above the national average ($32.07), placing Rhode Island 6th highest among the 50 states.
Rhode Island’s individual income tax collections were $25.83 per $1,000 per personal income in FY 2002. Fiscal year 2002 collections were 10.8% above the national average ($23.31), placing Rhode Island 18th highest among the 43 states that collect state and/or local individual income taxes.
Rhode Island’s general sales tax collections were $22.95 per $1,000 of personal income in FY 2002. Fiscal year 2002 collections were 10.4% below the national average ($25.62), placing Rhode Island 34th highest among the 46 states with a general sales tax.
The impact of a particular tax can also be measured on per capita basis which is shown in the attached report. One may also compare effective tax rates or use taxpayer profiles to measure tax burdens. Taxpayers should consider each measure’s limitations when comparing Rhode Island with other states. Click on a link below to read report: Table 1 - State and Local Revenues Per $1,000 of Personal Income and Per Capita - How Rhode Island Compares to the United States Average - Fiscal Year 2002 Table 2 - All State and Local Tax Collections - Per $1,000 of Personal Income - Fiscal Years 2002, 1992 and 1982 Table 3 - All State and Local Tax Collections Per Capita - Fiscal Years 2002, 1992, 1982 Table 4 - State and Local Property Tax Collections Per $1,000 of Personal Income - Fiscal Year 2002 Table 5 - State and Local Property Tax Collections Per Capita - Fiscal Year 2002 Table 6 - State and Local Individual Income Tax Collections Per $1,000 of Personal Income - Fiscal Year 2002 Table 7 - State and Local Individual Income Tax Collections Per Capita - Fiscal Year 2002 Table 8 - State and Local General Sales Tax Collections Per $1,000 of Personal Income - Fiscal Year 2002 Table 9 - State and Local General Sales Tax Collections Per Capita - Fiscal Year 2002 Data Information | 
