AN ACT RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND COMPUTATION

SB 416 phases out Rhode Island's 1% local meals and beverage tax by gradually reducing it 0.25% annually starting in 2026, eliminating the tax entirely by January 1, 2029. The bill directly affects restaurants, bars, and other eating establishments that currently collect this tax on meals and beverages sold for immediate consumption. Key provisions include annual tax reductions beginning January 1, 2026, with the tax fully expiring on January 1, 2029. This change will end local revenue from this tax source for cities and towns that previously received quarterly distributions. The bill takes effect upon passage but is currently under further study in committee.