So Long to Sales Tax (on Art)

Massholes and Connecticutians now have a new reason to head to the Ocean State: no sales tax on art. That’s right, the 7 percent price increase is gone. No more. Dead. And may it forever rest in peace.

Of course art purchasers benefit most from this abolishment, as they no longer have to pay, for example, an extra $10.50 for a work worth $150. But the question a lot of economists (and residents) are now asking is this: will it be good for Rhode Island as a whole?

“I think the answer is yes,” said Ed Mazze, professor of business at URI. “But more importantly, for Rhode Island, the art community — defined very, very broadly — is a very important economic engine. When you look at the state, we have the Rhode Island School of Design, we have various and sundry art programs from all of the colleges and universities, and many of the communities in RI have art festivals.”

Self-described as “the guy who did one of the studies on the motion picture tax credit” and “involved in the theatrical tax credit,” Mazze knows a thing or two about the Rhode Island’s artistic community — especially when discussing how that community benefits the state’s economy. And according to him, the lack of tax on art is in fact a boon for all Rhode Islanders, artistic or otherwise.

What it comes down to, he argues, is “sustainable competitive advantages.” Every state is known for industries or assets “that really are used to attract or keep people, or to attract and retain businesses.” Massachusetts has its technology industry. Connecticut has its aircraft, guns and nutmeg. Now, Rhode Island has its arts community. “But it’s definitely not the only sector,” added Mazze.

He points to Pawtucket’s revival as an example: “Pawtucket, which has already received all sorts of attention for being a community encouraging the arts — and also one of those zone areas where there was no tax in art — has really brought a lot of good attention to Rhode Island.” The destruction of sales tax on art serves only to broaden this attention by creating more artistic bastions similar to the Hope Artiste Village or Tiverton’s Four Corners, which reinvigorate and revolutionize nearby economies.

“The arts community, it’s more than photography and painting. It involves woodcraft, glassblowing, all of these other things that are really being taught at RISD and other schools. [The sale tax abolishment] is a way to keep these young people in the state, because they see a future as an artist here. It’s basically a vote of confidence in the creative arts community.”

That last bit bears repeating, as it’s the takeaway of this whole economic shift: the death of the sales tax is the local government’s “vote of confidence” in its growing arts community. It’s the bureaucratic way of saying, “Keep up the good work” and “Way to go, kid.” With this kind of change, the arts are allowed that much more financial room to flourish, and thus that much more room to attract artistic entrepreneurs and independent artists from nearby states (and beyond).

“For a lot of businesses, there’s no question that they look at [a state’s] education and medical facilities,” said Mazze, “but they are also concerned with theater and art — all of the things that make one’s life more enjoyable.”

And that is now one of Rhode Island’s sustainable competitive advantages: a humanities-minded environment in which artistic talent is nurtured and encouraged to metamorphose into financially successful creative careers.

Only time will tell if it actually works.