RELATING TO TAXATION -- PUBLIC SERVICE CORPORATION TAX
Summary
H7703 amends Rhode Island’s public service corporation tax law to temporarily suspend the gross earnings tax imposed on electric and gas companies. Under current law, electric utilities are taxed at 4% of gross earnings and gas utilities at 3%; this bill would suspend the tax rate for the electric/gas utility category beginning January 1, 2027, and keep that suspension in place until January 1, 2036. The bill does not change the tax rates for other public service corporations, such as telecommunications, cable, rail, ferry, water, or toll bridge companies.
The measure is a targeted tax change affecting regulated utility companies that sell or distribute electricity and illuminating or heating gas to the public. By suspending the gross earnings tax for nearly nine years, the bill would reduce tax liability for those utilities and potentially affect state revenue collected under Chapter 44-13. The act is set to take effect on January 1, 2027.
Impact
This bill would amend Rhode Island General Laws § 44-13-4, which sets gross earnings tax rates for public service corporations, by adding a temporary suspension for the tax on electric and gas companies. It would leave the statutory rates for other utility and transportation-related corporations unchanged, but would effectively remove the gross earnings tax burden on electric and gas utilities for the suspension period. The change would likely reduce state tax receipts from those companies and could affect utility rate-setting, utility finances, and state revenue planning.
Sentiment
Based on the bill text and available context, the bill appears to be framed as a policy change favorable to electric and gas utilities, with no recorded committee transcript or vote history provided to show formal debate. The introduction by multiple House members suggests some legislative support or interest, but there is no evidence in the supplied materials of opposition, amendment, or recorded sentiment from committee discussion. Overall, the available record is neutral to mildly supportive, with the bill presented as a straightforward tax suspension measure.
Contention
The main point of contention likely concerns the fiscal impact of suspending a tax on electric and gas companies, including the resulting loss of state revenue and whether the relief is justified. Supporters would likely emphasize utility tax relief and possible downstream effects on customer costs or utility investment, while critics may question granting a long suspension to regulated utilities and the effect on the state budget. No specific objections or named opponents are included in the provided materials, so any contention is inferred from the policy change itself rather than documented debate.
Exempts from taxation the real and tangible personal property of Amos House, provided it remains a qualified tax-exempt corporation pursuant to §501(c)(3) of the Internal Revenue Code.
Exempts from taxation the real and tangible personal property of Codac, Inc., a Rhode Island nonprofit domestic corporation, located at 45 Royal Little Drive in Providence, Rhode Island.
Exempts from taxation the non-commercial real and tangible personal property of Southside Community Land Trust, a Rhode Island domestic nonprofit corporation, located in Providence, Rhode Island.
Exempts from taxation the real and tangible personal property of Codac, Inc., a Rhode Island nonprofit domestic corporation, located at 45 Royal Little Drive in Providence, Rhode Island.
Exempts from taxation real and tangible personal property of Little Flower Home, provided it remains a qualified tax-exempt corporation pursuant to § 501(c)(3) of the Internal Revenue Code, by amending the address from former location to current location.