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Providence proposes 7% sales tax on paid parking as a new local revenue option
Summary
House Bill 5314, sponsored by Rep. Kislak and advanced at Providence's request, would allow municipalities to levy the state 7% sales tax on paid parking as an optional local revenue source, with collections returned to the host community.
House Bill 5314, introduced by Rep. Kislak as part of Providence's legislative package, would enable cities and towns to apply the state's 7% sales tax to paid parking, creating a non‑property tax revenue source that proponents said municipalities could use to diversify their tax base.
Rep. Kislak said the measure is "part of the city's efforts to diversify the city's revenue sources away from property taxes," noting more than 48% of property in Providence is tax exempt. She told the committee the bill would allow host communities to implement the sales tax on parking to generate revenue that would be returned to the collecting municipality.
Mayor Smiley testified in support and said the measure "applies broadly to all paid parking" as written, and that local governments could "opt out or exclude certain facilities". He said that, as proposed, collections would be given "directly to the host communities," and noted the League of Cities and Towns and other municipalities provided letters of support.
A Department of Revenue letter with technical concerns was noted; the mayor said city and state fiscal staff were open to working on those technical issues. The committee did not vote on the measure; Rep. Kislak and the mayor said they would provide additional technical clarifications to committee staff.
