Rhode Island Capitol Update

February 3, 2025

If Tax Hikes Are on the Table…Small Businesses Become the Meal

In a recent interview addressing how the state will reconcile a projected $300-330 million budget deficit, Speaker Shekarchi said “everything is on the table. I say that literally, including tax hikes and cuts in spending.”

While spending cuts would be the optimal solution, Rhode Island lawmakers are already hinting at revisiting legislation that will raise income tax rates. Last session several bills were filed to add new income tax brackets and create an income tax surcharge similar to Massachusetts’ disastrous “millionaires’ tax”. While these bills thankfully failed to advance, they are all expected to be refiled again for the current legislative session.

NFIB testified against bills that purported to target higher income earners last year, noting this meant tax hikes for the vast majority of small businesses that file their taxes as pass-through entities. Countless S-corps, LLCs, and partnerships across the state all file their taxes as individuals, and their profits are not just an employers’ earnings, but rather money reinvested in the business through job creation and economic growth.

NFIB asks that you help educate lawmakers on how income tax hikes are also tax increases on small businesses. Please take a moment to use our Action Alert to contact your elected officials.