Rhode Island is the lowest tax state in the country … when it comes to art.
We’re the only state in the nation that exempts artistic creations from sales tax. Not unlike in 1996 when we became the first state in the nation to create local tax free art districts in Providence. As of December 1, products like paintings, prints, pictures, sculptures, self-published books, plays, movies and even dances can all be bought and sold anywhere in the Ocean State without the burden giving the government a cut. (And no, you can’t claim your investment fund or new swimming pool is a work of art; artists who want to qualify for the exemption need to apply with the state.)
While such businesses aren’t the type tax foes typically fight for, they are no doubt an important driver in the Ocean State’s economy. There are between 8,000 and 10,000 independent artists in Rhode Island, local arts organizations employ more than 5,000 people and arts related businesses employ 13,000 people in Rhode Island, according to this report commissioned by Senate President Teresa Paiva Weed. And the arts industry isn’t going anywhere; in fact the creative sector grew by 6 percent in 2012, following a seven year growth trend.
This weekend, Congressman Jim Langevin came to the 16th annual open studios weekend at the Shady Lea Mill in North Kingstown to see firsthand how this slice of the economy works.
“Small business is truly the foundation of the Rhode Island economy, and lifting the tax on products created by local artists is a boon for business and our state’s economy,” Langevin said. “I hope this boost will help arts-based businesses continue to thrive and grow in the Ocean State.”
The Shady Lea Mill is one of the great quirky and clandestine economic engines in the Ocean State. There are more than 40 artists, artisans, crafters and other various small businesses located in this old mill on the Mattatuxet River, just downstream of Silver Springs and upstream from Gilbert Stuart’s birthplace. As I told the Congressman this weekend, that’s got to be one of the densest clusters of economic development in South County!
An old-timer by the name of Ambrose Reisert manufactured staples here until Bostitch bought him out in the 1980’s. A few years later a local painter Luke Randall asked if he could set up a studio in the mill, and several other artists followed suit. Today, there are painters, woodworkers, glass blowers, guitar makers, t-shirt designers, soap makers and even an arborist who is starting a forest ecology school. Not to mention this blog!
Reisert had initially wanted to start an assisted living center in the mill, but zoning and the nearby wetlands wouldn’t allow for it. It could easily be argued that an artists colony is better for the economy than an old folks home, so take that those who say environmental regulations stifle business!
Read this recent Wall Street Journal article for more on why old mills are a key lynchpin in Rhode Island’s strategy to slash sales tax on art. Here’s the lede: “Rhode Island, aiming to build on the success of some of its old industrial towns that have reinvented themselves as artists’ enclaves, has become the first U.S. state to stop collecting sales tax on original and limited-edition art sold there.”
Perhaps the best-known small business in the Mill these days is The Shady Lea Guitar Company – where you can make your own acoustic guitar! Ironically, this business is owned by Dan Collins, brother of Lanevin’s one-time primary opponent Abel Collins. Only in RI…
Langevin also stopped by the RI Future newsroom and said he’d be glad to come back to join Mark Grey and I to record a podcast after the holidays. If and when anybody comes on the podcast, I’ll be happy to show you around the mill … where you can shop sales tax free!