Rhode Island Realtors Punished in Budget

        Posted By Wayne G. Barber
Rhode Island realtors took a big hit in this year's budget with a new tax on vacation rentals -- after the National Association of Realtors pumped over $75,000 this past election cycle into a state Senate race to unseat an incumbent, and lost.

The House-approved fiscal year 2016 Rhode Island state budget contains a new 8% tax on vacation rentals, which the Rhode Island Association of Realtors (RIAR) say will "create burdens for Rhode Island's residential property owners and barriers for tourists."
The move comes after Chris Wall, President of the Board of Directors of the Greater Providence Board of Realtors, ran against incumbent Gayle Goldin, a non-profit consultant, in the Democratic primary for District 3 in Providence. Wall was aided by the National Association of Realtor Fund's $75,000 spend in support of his campaign, but ultimately came up short to Golden -- who in the waning days of the primary season pulled in several thousands of her own in PAC money which included State Senate Democrat and Leadership PACs.
Wall referred questions about the vacation tax to RIAR lobbyist Monica Staaf.
"They're killing the Golden Goose," said Staaf of the House-approved vacation rental tax.  "If I were a legislator, I'd be wary of walking in 4th of July parades in some communities this year."
Impact on Realtors, Renters
Staaf said it wasn't just the vacation rental tax - but the timing -- that was particularly problematic.
"The Senate is voting [on the budget] next Wednesday.  That will give rental agents a week to learn how to transmit reports, collect taxes, a whole host of issues that are being rushed through," said Staaf.  "Our members who are rental agents are reaching out folks who are renting this summer to let them know they should pay in full by July 1st.   No one has a lease that covers the tax. People booked these rentals as far back as last summer, and are being told they have to pay in full now, or get hit with an 8% tax."
The Rhode Island Association of Realtors is urging people on its website to call members of the Senate to postpone implementation.  "I think it's overwhelming that it wasn't postponed. We'd asked for a January 2016 implementation just to get through the rental season. It's right before the 4th of July. These renters didn't budget for an 8% increase," said Staaf.  "How does this make our state look to out-of-staters, when they find this out?  Other states have this tax up north, but Massachusetts -- and the Cape -- don't have this tax."

Efforts were made during the floor proceedings to push off the implementation date, but confusion over the impact of the July 1 start date played a factor.
Representative Karen MacBeth said she was going to introduce an amendment for a January 2016 effective date  and look to offset the revenue this year, but didn’t when she thought the impact would be minimal based on erroneous information.
“All I know is I did have an amendment that would have tried to postpone it to January [2016], but when [Chairman Gallison] said people who had contracts signed before July 1 wouldn’t be impacted, I didn’t,” said MacBeth. “I didn’t realize if they haven’t paid in full that they would be hit.”
Representative Blake Filippi, who along with Representative Anthony Giarrusso offered an unsuccessful amendment to push off the implementation date, said he was most concerned about the position it was putting renters -- and property owners - in this summer.
“We want to be business friendly.  It’s not just about taxes, it's how government operates and treats people who have invested in the state,” said Filippi.  "It’s about fair treatment.”
Realtors Win on Taylor Swift Tax
The tax comes at a time when the state found itself in an improved financial standing - the state revenue estimating conference in May showed $173 million in surplus funds not taken into account in Governor Raimondo's initial budget proposal.
One win for the realtors was seeing Raimondo’s statewide property tax proposal — dubbed the “Taylor Swift tax” — fail to gain traction.
“I think in the long run, the statewide property tax would have been more devastating,” said Staaf.  “But in the short term, this is worse.”
The big outside spending bet -- and loss -- landed the Wall-Goldin race on GoLocal's list of "most bizarre moments" in the 2014 primary election races:
It's hard to think that a candidate for a state senate race -- one of 38 Rhode Island state senators -- just got a windfall of $75,000, but that's just what Chris Wall got from the National Association of Realtors PAC on August 13.
Wall's largesse comes in a race that pits him against incumbent State Senator Gayle Golden, who 28 days before primary reported $13,814.96 cash on hand.  Meanwhile, Wall reported having nearly $20,000 cash on hand for the period ending August 11, prior to the big get.  If you see more of Wall in your Facebook ads, you know why!  Big money from out of state for a General Assembly race?
Source GoLocal Prov. News Kate Nagle