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Rhode Island to Tax Pet Care Services

Posted: Aug. 1, 2012, 7:10 p.m. EDT


By Clay Jackson
Deputy News Editor

Starting Oct. 1, 2012, Rhode Island's pet care services, such as boarding, grooming, sitting and training, will be subject to the state’s 7 percent sales tax. Veterinary and laboratory services will be exempt.

Businesses like Camelot Pet Resort in Ashaway, R.I., which boards, grooms and trains dogs and cats, are among those hit by the expansion of the sales tax.

Camelot’s pet training packages would be the service most adversely affected, owner Susan Thomas said.

“It will hurt my business and bring costs up quite a bit,” she said. “A customer might decide to opt out of a $799 training program now.”

Grooming and other pet services in Rhiode Island will be subject to sales tax this fall.
Grooming and other pet services in Rhode Island will be subject to sales tax this fall.
The $56 tax on the training package may be just enough to frighten away “the margin people who are really trying to cut corners,” she added.

Rhode Island, looking to close a $120 million budget deficit, also extended the sales tax to taxi fares and high-end clothing and footwear. The change is expected to generate $10.4 million a year, according to the Sunshine Review, a nonprofit governmental watchdog website.

Camelot had been just making ends meet as it was, Thomas said.
 
“I don’t sell things, so I don’t have to pay sales tax, but I guess I’m going to have to now,” she commented.

Rhode Island’s diminutive size may hurt Thomas as well. Connecticut and Massachusetts are a short drive away.
 
“People could go elsewhere like they already do when buying liquor, which they go to Massachusetts for, to avoid paying sales tax,” she said.

“I live right on the Rhode Island-Connecticut border, so if I’m training a dog in Connecticut, do I have to pay sales tax?” Thomas posited. “It can get complicated.”

Connecticut passed a similar tax on pet boarding, grooming and obedience services in 2011.

The new tax followed passage of an appropriations bill, H7323, in June that redefined what constituted taxable services.

“Pet care service providers have long been exempt from state sales tax, like many other service providers in Rhode Island,” said Bambi Nicole Osborne, director of government affairs at the Pet Industry Joint Advisory Council in Washington, D.C.

“We feel that this tax is excessive and find it unnecessary to single out pet care service providers,” Osborne noted. “Such a tax could impede these businesses by forcing pet care service providers to raise prices to cover taxes.”

Though the new tax goes into effect Oct. 1, supporters and opponents may weigh in until Aug. 23, 2012.

Written comments may be sent to Michael Canole, Rhode Island Division of Taxation, 1 Capitol Hill, Providence, RI 02908 or emailed to Michael.Canoloe@tax.ri.gov.

Voice messages may be left at 401-574-8729.

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