RI income tax reduction bill would phase in cuts over five years

PROVIDENCE, R.I. — An income tax reduction bill introduced at the Rhode Island State House would gradually lower personal income tax rates over the next several years.

The proposal, introduced by Jessica de la Cruz (R-Dist. 23, North Smithfield, Burrillville,
Glocester), calls for a phased reduction aimed at easing financial pressure on residents and improving the state’s economic competitiveness.

Plan would lower taxes over time

Under the legislation, personal income tax rates would decrease by 2 percent each year for five years, starting on January 1, 2027.

The bill also includes a review process that would allow lawmakers to monitor:

• The financial impact on the state budget
• Changes in taxpayer behavior
• Broader economic trends

Supporters say this approach allows the state to implement tax relief while maintaining oversight of its fiscal health.

Support from business community

The proposal has backing from the Greater Providence Chamber of Commerce, which says the plan could help address affordability concerns across the state.

Business leaders argue that reducing income taxes would leave more money in the hands of residents and small businesses, potentially boosting spending and investment.

They also say improving tax competitiveness could help attract and retain businesses in Rhode Island.

Focus on affordability and growth

Supporters of the bill say the phased approach is designed to balance tax relief with responsible budgeting.

They argue that lowering taxes could stimulate economic activity, support job growth, and help families manage rising costs.

Next steps

The legislation, filed as S-2672, has received bipartisan support and will be considered by lawmakers during the current legislative session.