At Pawtucket Brewery, Raimondo Toasts Small Business Reforms
Governor keeps promise to cut red tape, reduce taxes and eliminate regulations
Keg Tax repeal clears way for growth in Rhode Island’s beer economy
PAWTUCKET, RI – Sitting at a high top bar table inside the brewery at Foolproof in Pawtucket, Governor Gina M. Raimondo raised a glass this afternoon to tout new reforms – including the elimination of the so-called “Keg Tax” — that will make it easier for small businesses to open and expand in Rhode Island. During the visit to Foolproof Brewery, the Governor also ceremonially signed two pieces of legislation approved by the General Assembly earlier this year that will streamline regulations, cut red tape and reduce fees for small businesses.
“Small businesses employ more than half of all working Rhode Islanders and are the backbone of our economy,” said Governor Raimondo. “Over the last three and half years, Rhode Island has made it easier for small business owners and that’s worth toasting. These new reforms build on our previous work – they cut red tape, cut regulations and cut taxes.”
The budget Governor Raimondo signed last month eliminates a requirement for brewers to pay sales tax on kegs they purchase to fill with beer and then sell to distributors. Eliminating this sales tax has been a priority for the Rhode Island Brewers Guild for several years and the coalition has worked closely with the Governor’s administration, the Department of Business Regulation and the legislature on the reform. In addition to touting the elimination of the keg tax, Governor Raimondo ceremonially signed a bill ( S2251 ;?? H7092 )??to reduce the alcoholic beverage manufacturing and wholesale licensing fee from $3,000 to $500 — a nearly 85 percent reduction. Earlier in her term, Governor Raimondo signed legislation that allows brewers to sell more beer directly to customers.
“Repealing the keg tax is a step in the right direction for Rhode Island. The removal of this burdensome tax aligns our beer laws more closely with those of neighboring New England states and makes it easier for Foolproof and other breweries to invest in our businesses and grow,” said Nick Garrison, President and Founder of Foolproof Brewing Company.
“I’m proud that we were able to include this tax exemption as part of the budget to ease the burden on alcoholic beverage manufacturers,” said Sen. William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket), who chairs the Senate Finance Committee. “A sales tax on specialized manufacturing equipment such as kegs and barrels is the type of financial burden that makes it difficult to do business. This will be a relief to the state’s many microbreweries.”
“A crucial part of Pawtucket’s resurgence, in both business and tourism, has been the blossoming of our craft beer and brewery scene. The inclusion of this bill in the state budget will help this growing and successful market, and it will allow these entrepreneurs to invest more money into their businesses and employees,” said Carlos E. Tobon (D-Dist. 58, Pawtucket).
“Here in Rhode Island, small business is the backbone of our economy. We want to support and encourage small business startups and business growth. Reducing high licensing fees means business owners can invest the money they save in their business to help them succeed. This is a way we can make it easier to do business in Rhode Island, foster business development and encourage job creation,” said Sen. Roger A. Picard (D-Dist. 20, Woonsocket, Cumberland).
“This is a great way to help small businesses that have some really terrific potential,” said Rep. Michael A. Morin (D-Dist. 49, Woonsocket). “Microbreweries and other manufacturers of alcoholic beverages have become an important part of this state’s economy. The exorbitant licensing fees were a terrible hindrance to their operation. Our laws should encourage the growth of small businesses and new industries, and I’m proud to help make this change.”
The Governor also ceremonially signed the Small Business Friendliness Omnibus package ( H8122a ;?? S3006 ), which eliminates a number of unnecessary and duplicative licenses, removes small application fees, and consolidates or eliminates fees for secondary business activities, including an extra fee restaurants pay in order to serve ice cream and other frozen desserts. This bill also eliminates??and an annual $100 bond requirement for brewers.
“This bill is a continuation of our ongoing efforts to strengthen Rhode Island’s economy. Simplifying our regulations and processes will help our small businesses and allow them to grow into the future,” said Rep. Marvin L. Abney, Chairman of the House Finance Committee (D-Dist. 73, Newport, Middletown).
“As a small business owner myself, I know this bill will help our small businesses by streamlining our regulatory process, allowing them to spend more time on ensuring that their businesses develop and succeed. This is another step in continuing the positive economic momentum our state has been gaining recently,” said Sen. Frank Lombardo III (D-Dist. 25, Johnston).
Since taking office, Governor Raimondo has worked with local leaders to make Rhode Island a more business friendly state. For example: In Pawtucket, opening a restaurant once required 12 forms and at least 11 visits to City Hall. After the Governor’s small business reforms and collaboration with municipal leaders, that same process now requires only four forms, all of which can be submitted electronically.
“We heard firsthand from businesses on ways in which we could alleviate the barriers for them to succeed, and I am proud to say with this bill we’ve successfully addressed many of those concerns,” said DBR Director Liz Tanner. “Our work is not yet complete, as we will always be looking for ways to improve our state’s business climate, but this is a step in the right direction.”
Since the start of 2015, Rhode Island has added nearly 20,000 jobs. The state’s unemployment rate – the highest in America as recently as 2014 — is the lowest it’s been since 2001.