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President’s Message:

RISCPA Legislative Recap 2018 – 2019

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The RI Society of CPAs (RISCPA) had a challenging legislative year that included the introduction of legalized marijuana in Rhode Island, sports betting, a push to require state vendors to install transparency tracking software, a Medicaid tax on employers, “Evergreen” contracts for municipalities and new taxes on a wide variety of products and services - each of which would have created significant burdens on the Rhode Island business community. Several of the bills submitted received national attention on issues including:

  • Paid Sick Leave and Pay Equity – both created without input from employer groups or the business community.
  • Cannabis Equity Act, which would have provided taxpayer assistance to create and fund a cannabis operation for “low-income” individuals
  • New taxes on association membership fees and business services

Unfortunately, we expect anti-business efforts will continue to escalate during the next session. Maurice Mitchell, National Director of the Working Families Party visited Rhode Island recently and declared “the group will focus on efforts to influence elections and discussions on increasing the minimum wage and other actions”. Many of these “actions” will impact RISCPA and our membership; they are detrimental to economic development efforts in Rhode Island. Fortunately, our advocacy and pro-business efforts have not gone unnoticed by the employer community and state leadership. RISPCA had a number of pro-taxpayer wins that included “pass-through legislation” and defeating proposals that would have added new taxes on products or services including commercial building services, lobbying, guns, association membership fees, the Medicaid employer tax and pay equity and workplace bullying.

RISCPA Opposed H-5255 and S-0125, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- DEPARTMENT OF ADMINISTRATION This legislation would have required verification of hours worked on computers by contractors for professional or technical services rendered to the departments of transportation, health, human services, administration and commerce for contracts exceeding $100,000.). The legislation, introduced in more than 28 states this year, raised significant privacy and contracting concerns. The legislation would have required state vendors to use a software application that would track actual computer time by state vendors who bill for hours of work on computers. Monitoring by the software would include frequent screen shots and logging of keystrokes, and the referred to technology is currently only being offered by one company with questionable origins. The National Association of State Chief Information Officers NASACT said members “should be aware that the software company seeking to have the legislation passed is billing it as an important fraud prevention and accountability tool”. There was a last-minute attempt in Rhode Island to introduce the bill as “pilot program” to circumvent standard legislative vetting. RISCPA will be monitoring this situation closely. 

RISPCA Opposed H-5795 Cannabis Equity Act This legislation, if enacted, sought to provide technical support, regulatory compliance assistance, and assistance with “securing the capital necessary to begin a business will further the stated intent of this act by reducing barriers to licensure and employment in the regulated industry.” In other words, the legislation sought to provide taxpayer funds to promote the cannabis industry in Rhode Island.

RISCPA Opposed H-5437 and S-0512 (Sub A) Relating to Labor Relations-Arbitration – Continuance of Contractual Provisions – Also known as “Evergreen Contracts”, RISCPA joined municipal leaders in bipartisan opposition to this legislation that will impede negotiation efforts that will lead to higher taxes and are widely considered “anti-taxpayer”

RISCPA Opposed H-6087, Healthy Workplaces Act: RISCPA joined in opposition because of the burden this legislation would place on employers. Federal and State laws protect employees from discrimination and were concerned about the liability and additional burdens these bills would create for employers in the state and potential litigation.

RISCPA Opposed S-0798, Opioid Stewardship Act:  RISCPA joined in a letter of opposition on this bill which would require manufacturers and distributors of opioids in the state to make quarterly payments into a new “opioid stewardship fund” (tax). A major new tax on opioid manufacturers and distributors could lead to disruptions in distribution chains, impacting access for patients with sincere medical need.

RISCPA Opposed Budget Article 16, Proposal to add Medicaid Tax on Employers – RISCPA and Rhode Island business groups opposed this legislation, which was enacted in Massachusetts with “devastating” and “nightmarish” economic consequences according to multiple business organizations including the NFIB (who has been involved with MA legislation and consequences). RISPCA met with Governor Raimondo, Speaker Mattiello and several others in state leadership to not only oppose this legislation but provide an alternative which would make the program sustainable long-term.

Many of the state’s largest employers, including Raytheon, CVS, grocers, home-care providers, restaurant chains and hospitals were against the plan to charge companies with at least 300 employees a 10-percent fee on the wages of Medicaid-enrolled workers. RISCPA opposed any new tax without a full vetting but also stated that employers should be allowed to have employees sign waivers and cannot force employees to take the insurance they provide. It is widely expected the Massachusetts bill will sunset because of the unintended consequences of the legislation.

RISCPA Opposed Budget Article 13, Minimum Wage Hike RISCPA joined in opposition to the Governor’s budget proposal to increase Rhode Island’s minimum wage from the current $10.50/hr. to $11.10/hr. starting January 2020. RI’s hourly wage, already the 10th highest in the nation, has been increased every single year since 2013 (except for holding it steady in 2017); it would place RI at 4th highest wage nationally, tied with New York and Colorado. Only the states of Massachusetts, California and Washington, with much stronger economies, have a higher minimum at $12.00/hour.

S-0234 – AN ACT RELATING TO COMMERCIAL LAW-GENERAL REGULATORY PROVISIONS -- CONSUMER PRIVACY PROTECTION (Creates "Consumer Privacy Protection Act."). The bill, also known as “Privacy” legislation, was pulled by the Speaker at the request of RI Business Coalition and RISPCA, no House companion bill was submitted.

RISPCA Opposed S-0830 and H-5759 Hawkins-Slater Medical Marijuana Act: We joined in opposition to this legislation because it was deemed to provide unreasonable protections to employees creating additional burdens for business owners. As written, the legislation would enable individuals to claim “acute pain” as a “debilitating medical condition” for which medical marijuana could be prescribed, adding substantial costs to Rhode Island’s workers’ compensation system.

Further, the bill would have allowed three “limited compassion centers” to operate in Rhode Island- in addition to the three compassion centers already permitted under state law. Ultimately, the action was deemed egregious by multiple watchdog groups. The concern was echoed by both local and national news outlets, who wrote an editorial about the “triopoly” the three existing compassion centers have enjoyed with power and influence. The paper called out the Senate President, Chairman of House Labor and Chairman of Committee on Rules and Senate Majority Leader for their actions. The actions highlighted the need for increased competition and transparency with the industry and have concerns with the lack of oversight and legislative overreach.

Tax Bills:

H-5399:AN ACT RELATING TO TAXATION - PERSONAL INCOME TAX: RISCPA opposed this legislation that would have added three new income tax brackets to the RI state tax statute and ultimately result in increases to the marginal tax rates.

S-073 & 074: Sales and Use Tax, Enforcement and Collection: RISCPA supported legislation to enact a 10-year statute of limitations on any assessment of tax due and payable, or commencement of any collection action by the tax administrator for taxes owed in certain categories.

Senate Bills: S-23, S-51, S-52: Relating to Taxation-Levy and Assessment of Local Taxes:  RISCPA opposed all three bills which pertain to proposed hikes in tax levied against residential properties participating in certain federal housing programs.

H-5576, AN ACT RELATING TO TAXATION -- BUSINESS CORPORATION TAX -RISCPA supported this legislation, which ultimately passed. RISCPA’s own Grafton “Cap” Willey IV and Randy Dittmar worked closely with state leadership on the legislation that restores an important tax deduction lost through 2017 Federal Tax reform. Cap also testified before the House Small Business Committee hearings and Committee Chair Rep. Nydia M. Velázquez recently in Washington, DC

Download Document: 2018_-_2019_legislative_recap.pdf

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