WeVote
Log In

Bill

Bill

HB 7703

AN ACT RELATING TO TAXATION -- PUBLIC SERVICE CORPORATION TAX

2026 Regular Session Introduced by Jon Brien and 9 co-sponsors

The bill suspends the electric and gas gross earnings tax from 2027 to 2035, while adjusting tax rates for various public utilities.

06/02/2026 Committee recommended measure be held for further study
0
WeVote Research Nonpartisan
Bill Summary · HB 7703

Summary of HB 7703 (Rhode Island, 2026)

Purpose and intent

  • The bill amends the Public Service Corporation Tax (Chapter 44-13) to adjust tax rates on various public utility sectors and to suspend the gross earnings tax for electric and gas companies for a defined period.
  • Key goal: modify incremental tax burdens on utilities while providing a multi-year suspension for certain electricity and gas-related taxes.

Key provisions and changes

  1. Rate of taxation (section 44-13-4):

    • The bill retains existing tax categories but modifies rates and timing for several sectors:
    • (1) Steamboat/ferry, common carrier rail, street railway, common carrier dining/sleeping/chair/parlor cars, public water utilities, and toll bridge corporations: 1.25% of gross earnings.
    • (2) Electric utilities (manufacturing, selling, distributing/transmitting electricity for light/heat/motive power):
      • Base rate: 4% of gross earnings.
      • Deductions: gross earnings from transmission or sale of electricity to other public utility corporations, non-regulated power producers, or municipal utilities for resale are deductible.
      • Gas-related portion: tax measured by the portion derived from manufacture/sale of illuminating and heating gas and by-products and gas appliances is computed at 3%.
      • Scheduling change: on and after January 1, 2027, the rate for subsection (2) is suspended until January 1, 2036. (i.e., the 4% (and 3% for gas portion) would be paused during this period.)
    • (3) Express carriers on steamboats/railroads/street railways and telegraph corporations: 4% of gross earnings.
    • (4) Telecommunications service providers: 10% of gross earnings, with a multi-decade phase-down history:
      • 9% effective July 1, 1985
      • 8% effective July 1, 1986
      • 7% effective July 1, 1987
      • 6% effective July 1, 1988
      • 5% effective July 1, 1997
      • Note: The definition of “telecommunications service” includes transmission of interactive two-way communications via wire/cable/fiber/microwave/radio, excluding certain value-added non-voice services that process content.
    • (5) Public service cable corporations: 8% of gross earnings.
    • (6) Gas utilities (manufacturing, selling, distributing illuminating or heating gas to the public): 3% of gross earnings.

  2. Effective date (section 2):

    • The act takes effect on January 1, 2027.
    • The suspension of the electric and gas gross earnings tax (subsection (2)) is set to begin on January 1, 2027 and end on January 1, 2036, effectively pausing that portion of the tax for the 2027–2035 period.

Who would be affected

  • Public service corporations subject to the Rhode Island Public Service Corporation Tax, including:
    • Electric utilities (with specified deductions and gas by-product provisions)
    • Gas utilities (gas lighting/heating and by-products)
    • Water utilities
    • Toll bridge operators
    • Steamboat/ferry operators, common carriers (railroads, street railways), and express carriers on steamboats/railroads
    • Telegraph and telecommunications companies
    • Cable television/private cable operators

Procedural and timeline aspects

  • Introduced February 11, 2026 by multiple representatives; referred to House Finance.
  • Scheduled for hearing/consideration around June 2, 2026 (per action history).
  • If enacted, the revised tax rates become effective January 1, 2027.
  • The most notable procedural feature is the temporary suspension of the electric and gas gross earnings tax for a defined window (2027–2035), resuming thereafter (2036 onward unless further legislative action alters the schedule).

Potential impact and considerations

  • Short-term fiscal impact: The 2027–2035 suspension of the 4% electric gross earnings tax (and 3% gas component) would reduce tax revenue from electric and gas utilities during that period.
  • Long-term fiscal impact: Tax revenue would resume starting January 1, 2036, under current language, with potential implications for state budgeting and utility rate structures.
  • Sector-specific implications: Utilities with deductions for inter-utility transactions or gas by-product revenues may experience differing net tax burdens; telecommunications tax history shows a long gradual reduction, but current law would set the rate at 5% from 1997 onward unless amended.

Note: This summary focuses on the substantive changes proposed by HB 7703 and does not assess policy merits or potential economic impacts beyond what is specified in the bill text.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.