 Rhode Island's taxes were appreciably higher than neighboring states, because Rhode Island's income tax was based on 25% of the payer's federal income tax payment.Former Governor Donald Carcieri claimed that the higher tax rate had an inhibitory effect on business growth in the state and called for reductions to increase the competitiveness of the state's business environment.In 2010, the Rhode Island General Assembly passed a new state income tax structure that was then signed into law on June 9, 2010 by Governor Carcieri.