Lawmakers rejected most of then-Gov. Lincoln Chafee's tax plans in 2011, but got behind one of his concepts in their annual budget — a future sales tax rate cut if the state were ever allowed to tax internet sales from the likes of Amazon.

PROVIDENCE — The year was 2011. Rhode Island was climbing out of the great recession and then-Gov. Lincoln Chafee hoped to balance the state's budget with more than $160 million in new sales taxes from a slew of services and previously exempt items.

Lawmakers, of course, rejected most of Chafee's tax plans, but got behind one of his concepts in their annual budget — a future sales tax rate cut if the state was ever allowed to tax internet sales from the likes of Amazon, which was growing rapidly but at the time collecting no Rhode Island sales tax.

"In recognition of the work being performed by the Streamlined Sales and Use Tax Governing Board, upon any federal law which requires remote sellers to collect and remit taxes, the rate imposed ... shall be [6.5%]," the budget stated.

That future appeared to be at hand when, reacting to a U.S. Supreme Court case last year, lawmakers passed and Gov. Gina Raimondo signed into law last month a bill requiring "remote sellers," as internet retailers are known, to collect and remit Rhode Island sales tax. The bill, which took effect immediately, is expected to raise $11.5 million next year and $13.6 million the following year.

Republican lawmakers and conservative activists argue the 6.5% rate should already be in effect, but their complaints have met silence and legal parsing from Democratic state leaders, who say the trigger requires an Act of Congress, not the courts, to lower the rate to 6.5%.

"It is our stance that the rate-drop provision doesn’t come into effect because the [Supreme Court's South Dakota v. Wayfair] decision is not the passage of a federal law," Department of Revenue spokesman Paul Grimaldi wrote in an email.

When he was asked whether this reading was in line with the spirit of the law, as well as the letter, Grimaldi wouldn't say, referring only back to his previous comment.

Did policymakers in 2011 intend for internet sales and a 7 percent rate?

"The rate cut does not become effective unless Congress enacts a law," Greg Pare, spokesman for Senate President Dominick Ruggerio wrote in an email.

Speaking to The Journal before a House session last week, Speaker Nicholas Mattiello declined to offer an opinion on what Rhode Island's sales tax rate should be.

"I think you should go talk to the governor about it. She proposed the budget and we are analyzing it," said Mattiello, who was House majority leader in 2011. "After our analysis is done I will be happy to talk to you about it when we produce our budget. But in the meantime, go talk to the governor about it."

Did he think back in 2011 that a court ruling, rather than an Act of Congress, would invalidate the sales tax cut trigger?

"I don't know that that is a relevant question, because I don't know that I thought about that at the time."

Calls to former Rep. Helio Melo, who was chairman of the House Finance Committee in 2011, were not returned.

No matter what lawmakers thought they were approving in 2011, less than two years later, state leaders realized the trigger language was unclear and quietly slipped back into the law to change it.

In 2013, a budget amendment requested by Chafee's administration added the word "passage" before "federal law" and made it clear that the state, not the federal government, is responsible for making retailers collect state sales tax.

"The [6.5%] rate shall take effect on the date that the state requires remote sellers to collect and remit sale and use taxes," the 2013 budget added.

Rep. Brian Newberry, who was House GOP leader in 2013, said he believes adding the word "passage" to the sales tax cut trigger was a good-faith attempt to clean up ambiguous language and this year's online sales tax bill automatically triggered a 6.5% rate with or without an Act of Congress.

"Even if they can make a technical argument, it goes against the intent of the law as passed and is a breaking of a promise made to voters," Newberry said Tuesday.

Chafee, in an email last week, told The Journal the Rhode Island sales tax should now be 6.5%.

"As a longtime fiscal conservative, I have always believed that unexpected new revenues should be used to either drive down debt or for tax relief," Chafee wrote. "Since it is almost a law of physics that legislatures will quickly spend unexpected new revenues, I insisted on the provision of the [2011] budget you reference. Back then, I was optimistic that collection of online sales taxes would pass Congress."

And even though lawmakers rejected most of Chafee's sales tax expansion plan in 2011, they've steadily broadened the sales tax to new items drip by drip over the intervening eight years.

Taxicab rides, pet services, clothing and shoes over $250, vacation rentals and software are all being taxed with digital downloads and streaming services slated to follow in this year's budget plan.

Whatever their counterparts intended in 2011, lawmakers could cut the state sales tax this year (or raise it) in the upcoming state budget. Whether they can afford a sales tax cut is another question.

The Department of Revenue estimates cutting the sales tax rate from 7% to 6.5% would cost the state around $80.2 million in the year starting July 1, far more than the $11 million to $13 million in new online revenue.



Going easy on telecoms

Techies and State House watchers may remember a debate from a few years ago about how much telecommunications companies should pay cities and towns to put the next generation of cellphone transmitters on their utility poles.

Cities and towns wanted to charge phone companies as much as they could in rent, in some cases more than $1,000 per pole, to use municipal property. Providence Mayor Jorge Elorza even bought more than 15,000 streetlights with an eye toward making some money off the shift in technology.

But state lawmakers, not wishing to anger the phone giants and put Rhode Island at the back of the line for 5G, countered with a much lower set fee, initially as low as $50 per pole. They eventually settled on $150 per pole.

On Friday, Verizon announced Providence will be one of 20 cities, including Boston, to get 5G wireless service this year, an outcome lawmakers said they were hoping for.

Of course, to use this new super fast wireless, you may need to buy a new phone.

Dollars for governors

Get used to this sentence from Democratic Governor's Association spokesman David Turner: “As [Democratic Governor's Association] Chair, Governor Raimondo is committed to raising the resources necessary to elect Democratic governors across the country who will expand access to health care, create jobs and grow their states’ economies. That's the purpose of her trip. ..."

And hitting the Sunshine State earlier this month on a similar mission, on Tuesday she heads off to San Francisco to raise resources on the Left Coast. She'll return late Wednesday, said Raimondo spokesman Josh Block.

The DGA will pay for the trip, except for Raimondo's state police security detail, which the state covers.