STATE HOUSE — Rhode Islanders could see smaller bites taken out of their paychecks under a new tax-cut proposal unveiled at the State House.
Senate Minority Leader Jessica de la Cruz (R-Dist. 23) has introduced legislation that would gradually slash the state’s personal income tax rates over the next five years, beginning Jan. 1, 2027.
The bill, S-2672, calls for a 2% reduction in personal income tax rates each year for five years, delivering what supporters describe as an across-the-board tax cut for residents statewide.
Backed by the Greater Providence Chamber of Commerce, the measure has already attracted bipartisan support on Smith Hill.
Supporters argue the plan would ease the financial pressure many Rhode Islanders are feeling as living costs continue to climb.
“This proposal delivers across-the-board tax relief to all Rhode Islanders and represents a true affordability agenda,” said Laurie White, president of the Greater Providence Chamber of Commerce.
White said the phased approach is designed to keep the cuts within the state’s fiscal comfort zone while allowing lawmakers to review the economic impact along the way.
The legislation includes a built-in review process that would allow the General Assembly to monitor state revenues, taxpayer behavior and broader economic trends as the reductions roll out.
Business leaders say the move could also make Rhode Island more competitive with neighboring states when it comes to attracting investment.
“In a small state like Rhode Island, even modest changes in tax policy can influence where businesses choose to grow,” White said. “When businesses grow, they hire.”
De la Cruz and supporters argue the proposal would not only help families keep more of their income but could also spur economic growth by encouraging spending and business expansion across the Ocean State.
If approved, the first tax reduction would take effect January 1, 2027, with additional cuts phased in annually through 2031.
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