2013 -- S 0246

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LC01332

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO TAXATION -- SALES TAX REPEAL ACT OF 2013

     Introduced By: Senators Picard, Bates, Raptakis, Walaska, and Ottiano

     Date Introduced: February 13, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 44-18-18, 44-18-18.1, 44-18-19 and 44-18-20 of the General Laws

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in Chapter 44-18 entitled "Sales and Use Taxes - Liability and Computation" are hereby amended

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to read as follows:

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     44-18-18. Sales tax imposed. -- (a) A tax is imposed upon sales at retail in this state

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including charges for rentals of living quarters in hotels as defined in section 42-63.1-2, rooming

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houses, or tourist camps, at the rate of six percent (6%) of the gross receipts of the retailer from

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the sales or rental charges; provided, that the tax imposed on charges for the rentals applies only

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to the first period of not exceeding thirty (30) consecutive calendar days of each rental; provided,

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further, that for the period commencing July 1, 1990, the tax rate is seven percent (7%); provided,

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further, that for the period commencing October 1, 2013, the tax rate is zero percent (0.0%). The

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tax is paid to the tax administrator by the retailer at the time and in the manner provided.

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Excluded from this tax are those living quarters in hotels, rooming houses, or tourist camps for

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which the occupant has a written lease for the living quarters which lease covers a rental period of

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twelve (12) months or more. In recognition of the work being performed by the Streamlined Sales

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and Use Tax Governing Board, upon any federal law which requires remote sellers to collect and

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remit taxes, effective the first (1st) day of the first (1st) state fiscal quarter following the change,

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the rate imposed under section 44-18-18 shall be six and one-half percent (6.5%).

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     (b) Effective October 1, 2013, the tax imposed in subsection 44-48-18(a) is eliminated

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and, notwithstanding the provisions of any general or public law to the contrary, all requirements

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to collect or remit tax, secure permits or file reports or returns related thereto are removed.

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Further, all regulations relating to the collection of sales tax and enforcement of collections shall

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sunset on that date and be of no force or effect on a going forward basis.

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     44-18-18.1. Local meals and beverage tax. -- (a) There is hereby levied and imposed,

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upon every purchaser of a meal and/or beverage, in addition to all other taxes and fees now

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imposed by law, a local meals and beverage tax upon each and every meal and/or beverage sold

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within the state of Rhode Island in or from an eating and/or drinking establishment, whether

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prepared in the eating and/or drinking establishment or not and whether consumed at the premises

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or not, at a rate of one percent of the gross receipts; provided, that for the period commencing

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October 1, 2013, the local meals and beverage tax is eliminated. The tax shall be paid to the tax

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administrator by the retailer at the time and in the manner provided.

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      (b) All sums received by the division of taxation under this section as taxes, penalties or

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forfeitures, interest, costs of suit and fines shall be distributed at least quarterly, credited and paid

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by the state treasurer to the city or town where the meals and beverages are delivered.

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      (c) When used in this section, the following words have the following meanings:

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      (1) "Beverage" means all nonalcoholic beverages, as well as alcoholic beverages, beer,

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lager beer, ale, porter, wine, similar fermented malt or vinous liquor.

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      (2) "Eating and/or drinking establishments" mean and include restaurants, bars, taverns,

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lounges, cafeterias, lunch counters, drive-ins, roadside ice cream and refreshment stands, fish and

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chip places, fried chicken places, pizzerias, food and drink concessions, or similar facilities in

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amusement parks, bowling alleys, clubs, caterers, drive-in theatres, industrial plants, race tracks,

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shore resorts or other locations, lunch carts, mobile canteens and other similar vehicles, and other

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like places of business which furnish or provide facilities for immediate consumption of food at

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tables, chairs or counters or from trays, plates, cups or other tableware or in parking facilities

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provided primarily for the use of patrons in consuming products purchased at the location.

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Ordinarily, eating establishments do not mean and include food stores and supermarkets. Eating

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establishments do not mean "vending machines," a self-contained automatic device that dispenses

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for sale foods, beverages, or confection products. Retailers selling prepared foods in bulk either in

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customer-furnished containers or in the seller's containers, for example "Soup and Sauce"

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establishments, are deemed to be selling prepared foods ordinarily for immediate consumption

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and, as such, are considered eating establishments.

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      (3) "Meal" means any prepared food or beverage offered or held out for sale by an eating

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and/or drinking establishment for the purpose of being consumed by any person to satisfy the

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appetite and which is ready for immediate consumption. All such food and beverage, unless

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otherwise specifically exempted or excluded herein shall be included, whether intended to be

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consumed on the seller's premises or elsewhere, whether designated as breakfast, lunch, snack,

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dinner, supper or by some other name, and without regard to the manner, time or place of service.

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      (d) This local meals and beverage tax shall be administered and collected by the division

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of taxation and unless provided to the contrary in this chapter, all of the administration,

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collection, and other provisions of chapters 18 and 19 of this article apply.

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      In recognition of the work being performed by the Streamlined Sales and Use Tax

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Governing Board, upon any federal law which requires remote sellers to collect and remit taxes,

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effective the first (1st) day of the first (1st) state fiscal quarter following the change, the rate

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imposed under section 44-18-18.1 shall be one and one-half percent (1.5%).

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     44-18-19. Collection of sales tax by retailer. -- The retailer shall add the tax imposed by

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this chapter to the sale price or charge, and when added the tax constitutes a part of the price or

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charge, is a debt from the consumer or user to the retailer, and is recoverable at law in the same

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manner as other debts; provided, that the amount of tax that the retailer collects from the

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consumer or user is as follows:

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     Amount of Sale Amount of Tax

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     $0.01 to $ .08 inclusive No Tax

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     .09 to .24 inclusive .01

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     .25 to .41 inclusive .02

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     .42 to .58 inclusive .03

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     .59 to .74 inclusive .04

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     .75 to .91 inclusive .05

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     .92 to 1.08 inclusive .06

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     and where the amount of the sale is more than one dollar and eight cents ($1.08) the amount of

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the tax is computed at the rate of six percent (6%); provided, that the amount of tax that the

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retailer collects from the consumer or user for the period commencing July 1, 1990 is as follows:

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     Amount of Sale Amount of Tax

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     $ 0.01 to $ .07 inclusive No Tax

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     .08 to .21 inclusive .01

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     .22 to .35 inclusive .02

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     .36 to .49 inclusive .03

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     .50 to .64 inclusive .04

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     .65 to .78 inclusive .05

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     .79 to .92 inclusive .06

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     .93 to 1.07 inclusive .07

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      and where the amount of the sale is more than one dollar and seven cents ($1.07) the

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amount of the tax is computed at the rate of seven percent (7%); provided, that commencing

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October 1, 2013, the retailer shall not collect the tax imposed by this chapter nor add it to the sale

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price or charge.

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     44-18-20. Use tax imposed. -- (a) An excise tax is imposed on the storage, use, or other

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consumption in this state of tangible personal property, prewritten computer software delivered

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electronically or by load and leave or services as defined in section 44-18-7.3; including a motor

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vehicle, a boat, an airplane, or a trailer, purchased from any retailer at the rate of six percent (6%)

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of the sale price of the property.

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      (b) An excise tax is imposed on the storage, use, or other consumption in this state of a

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motor vehicle, a boat, an airplane, or a trailer purchased from other than a licensed motor vehicle

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dealer or other than a retailer of boats, airplanes, or trailers respectively, at the rate of six percent

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(6%) of the sale price of the motor vehicle, boat, airplane, or trailer.

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      (c) The word "trailer" as used in this section and in section 44-18-21 means and includes

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those defined in section 31-1-5(a) -- (e) and also includes boat trailers, camping trailers, house

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trailers, and mobile homes.

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      (d) Notwithstanding the provisions contained in this section and in section 44-18-21

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relating to the imposition of a use tax and liability for this tax on certain casual sales, no tax is

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payable in any casual sale:

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      (1) When the transferee or purchaser is the spouse, mother, father, brother, sister, or

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child of the transferor or seller;

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      (2) When the transfer or sale is made in connection with the organization, reorganization,

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dissolution, or partial liquidation of a business entity; provided:

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      (i) The last taxable sale, transfer, or use of the article being transferred or sold was

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subjected to a tax imposed by this chapter;

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      (ii) The transferee is the business entity referred to or is a stockholder, owner, member,

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or partner; and

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      (iii) Any gain or loss to the transferor is not recognized for income tax purposes under

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the provisions of the federal income tax law and treasury regulations and rulings issued

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thereunder;

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      (3) When the sale or transfer is of a trailer, other than a camping trailer, of the type

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ordinarily used for residential purposes and commonly known as a house trailer or as a mobile

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home; or

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      (4) When the transferee or purchaser is exempt under the provisions of section 44-18-30

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or other general law of this state or special act of the general assembly of this state.

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      (e) The term "casual" means a sale made by a person other than a retailer; provided, that

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in the case of a sale of a motor vehicle, the term means a sale made by a person other than a

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licensed motor vehicle dealer or an auctioneer at an auction sale. In no case is the tax imposed

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under the provisions of subsections (a) and (b) of this section on the storage, use, or other

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consumption in this state of a used motor vehicle less than the product obtained by multiplying

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the amount of the retail dollar value at the time of purchase of the motor vehicle by the applicable

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tax rate; provided, that where the amount of the sale price exceeds the amount of the retail dollar

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value, the tax is based on the sale price. The tax administrator shall use as his or her guide the

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retail dollar value as shown in the current issue of any nationally recognized used vehicle guide

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for appraisal purposes in this state. On request within thirty (30) days by the taxpayer after

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payment of the tax, if the tax administrator determines that the retail dollar value as stated in this

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subsection is inequitable or unreasonable, he or she shall, after affording the taxpayer reasonable

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opportunity to be heard, re-determine the tax.

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      (f) Every person making more than five (5) retail sales of tangible personal property or

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prewritten computer software delivered electronically or by load and leave, or services as defined

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in section 44-18-7.3 during any twelve (12) month period, including sales made in the capacity of

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assignee for the benefit of creditors or receiver or trustee in bankruptcy, is considered a retailer

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within the provisions of this chapter.

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      (g) (1) "Casual sale" includes a sale of tangible personal property not held or used by a

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seller in the course of activities for which the seller is required to hold a seller's permit or permits

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or would be required to hold a seller's permit or permits if the activities were conducted in this

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state; provided, that the sale is not one of a series of sales sufficient in number, scope, and

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character (more than five (5) in any twelve (12) month period) to constitute an activity for which

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the seller is required to hold a seller's permit or would be required to hold a seller's permit if the

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activity were conducted in this state.

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      (2) Casual sales also include sales made at bazaars, fairs, picnics, or similar events by

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nonprofit organizations, which are organized for charitable, educational, civic, religious, social,

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recreational, fraternal, or literary purposes during two (2) events not to exceed a total of six (6)

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days duration each calendar year. Each event requires the issuance of a permit by the division of

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taxation. Where sales are made at events by a vendor, which holds a sales tax permit and is not a

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nonprofit organization, the sales are in the regular course of business and are not exempt as casual

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sales.

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      (h) The use tax imposed under this section for the period commencing July 1, 1990 is at

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the rate of seven percent (7%); provided, however, that for the period commencing October 1,

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2013, the tax rate is zero percent (0.0%). In recognition of the work being performed by the

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Streamlined Sales and Use Tax Governing Board, upon any federal law which requires remote

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sellers to collect and remit taxes, effective the first (1st) day of the first (1st) state fiscal quarter

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following the change, the rate imposed under section 44-18-18 shall be six and one-half percent

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(6.5%).

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     SECTION 2. Sections 44-18-30.B and 44-18-30.C of the General Laws in Chapter 44-18

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entitled "Sales and Use Taxes - Liability and Computation" are hereby repealed.

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     44-18-30.B. Exemption from sales tax for sales by writers, composers, artists --

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Findings. -- (a) The general assembly makes the following findings of facts:

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      (1) The downtown area of the city of Providence has been characterized by blighted

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areas, and dilapidated and abandoned structures;

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      (2) As a result, the downtown area has been designated an economic development zone

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in order to stop the deterioration and stimulate economic activity;

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      (3) The capitol center area of the city of Providence has become an attractive location,

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especially with the construction of the Providence Place Mall;

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      (4) In order to promote, revitalize and redevelop the "Old Downtown" area of the city of

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Providence it is necessary to provide tax exemptions to this area as it has been designated as an

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economic development zone;

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      (5) In order to promote, revitalize, and redevelop the "Downtown or other industrial or

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manufacturing buildings" located in the City of Pawtucket, it is necessary to provide tax

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exemptions to this area as it has been designated as an economic development zone;

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      (6) The development of an active artistic community, including "artists in residence", in

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this area would promote economic development, revitalization, tourism, employment

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opportunities, and encourage business development by providing alternative commercial

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enterprises while in Providence creating a link between the Old Downtown and the Capital Center

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Area;

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      (7) There is a separate artistic community in the town of Westerly which is important to

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preserve, promote, and revitalize, and which is distinct from that in the city of Providence;

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      (8) There is a separate artistic community in the city of Woonsocket which is important

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to promote and revitalize and which is distinct from that in the cities of Providence and Pawtucket

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and the town of Westerly;

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      (9) There is a separate artistic community in the city of Warwick which is important to

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preserve, promote, and revitalize and which is distinct from that in the cities of Providence,

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Pawtucket, Woonsocket and the town of Westerly;

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      (10) There are separate artistic communities in the city of Newport and in the town of

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Tiverton which are important to promote and revitalize and which are distinct from those in the

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cities of Providence, Pawtucket, Warwick and Woonsocket and the towns of Westerly and Little

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Compton;

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      (11) There is a separate artistic community in the town of Warren which is important to

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promote and revitalize and which is distinct from that in the cities of Providence, Pawtucket,

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Newport, Warwick and Woonsocket and the towns of Westerly and Tiverton.

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      (b) (1) This section only applies to sales by writers, composers and artists residing in and

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conducting a business within a section of the defined economic development zone in the cities of

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Providence or Pawtucket, or the defined economic development zone in the town of Westerly or

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the defined economic zone in the city of Woonsocket, or the defined economic zone in the city of

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Warwick, or in those areas within the city of Newport, and the town of Little Compton, which are

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zoned "general business," "waterfront business," or "limited business" or have been designated

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by the city of Newport as part of the arts district, or in those areas of the town of Warren which

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are zoned "waterfront district," "special district," "village business district," "manufacturing

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district," "business district" or "Warren historic district," or in those areas of the town of Tiverton

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which are zoned "business commercial," "business waterfront" or "village commercial." For the

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purposes of this section, a "work" means an original and creative work, whether written,

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composed or executed for "one-of-a-kind limited" production and which falls into one of the

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following categories:

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      (i) A book or other writing;

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      (ii) A play or the performance of said play;

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      (iii) A musical composition or the performance of said composition;

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      (iv) A painting or other like picture;

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      (v) A sculpture;

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      (vi) Traditional and fine crafts;

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      (vii) The creation of a film or the acting within the film;

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      (viii) The creation of a dance or the performance of the dance.

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      (2) For the purposes of this section, a "work" includes any product generated as a result

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of any of the above categories.

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      (3) For the purposes of this section, a "work" does not apply to any piece or performance

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created or executed for industry oriented or related production.

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      (c) (1) This section applies to sales by any individual:

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      (i) Who is a resident of and has a principal place of business situated in the section of the

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economic development zone designated as the arts and entertainment district in the downtown

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area of the city of Providence or in the city of Pawtucket, or the defined economic development

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zone in the town of Westerly or the defined economic zone in the city of Woonsocket, or the

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defined economic zone in the city of Warwick, or who is a resident of and has a principal place of

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business situated in those areas within the city of Newport or the town of Little Compton, which

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are zoned "general business," "waterfront business," or "limited business," or have been

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designated by the city of Newport as part of the arts district, or who is a resident of and has a

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principal place of business situated in those areas within the town of Warren which are zoned

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"waterfront district," "special district," "village business district," "manufacturing district,"

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"business district" or "Warren historic district," or who is a resident or has a principal place of

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business situated in those areas within the town of Tiverton which are zoned "business

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commercial," "business waterfront" or "village commercial." For the purposes of this section, the

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Providence arts and entertainment district in Providence is defined as the area bounded by Pine

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Street to the southeast, Dorrance Street to the northeast, Sabin Street to the northwest and Empire

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Street to the southwest. Said Providence arts and entertainment district also includes the area

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beginning at the point of intersection of Acorn Street and Harris Avenue, then turning east onto

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Atwells Avenue to Service Road 7, then turning southerly onto Service Road 7 to Westminster

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Street, then turning westerly onto Westminster Street, continuing until Bridgham, then turning

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south onto Bridgham to Cranston Street, then turning southwesterly onto Cranston Street, then

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continuing to Messer Street, then turning north onto Messer Street to Westminster Street, turning

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west onto Westminster Street to US Hwy 6 off ramp, then heading west on US Hwy 6 to Sheridan

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Street, then heading northeast on Sheridan Street to Aleppo Street, then turning southeast along

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Aleppo Street to Pelham Street, then heading northeast on Pelham Street to Manton Avenue, then

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continuing southeast on Manton Avenue until Delaine Street, then heading northeast on Delaine

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Street until Appleton Street, then continuing northwesterly on Appleton Street until Bowdoin

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Street, then heading north on Bowdoin Street until Barstow Street, then heading east on Barstow

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until Valley Street, then heading northeast on Valley Street to Hemlock Street, then turning

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southeast on Hemlock Street until Promenade Street, then heading east on Promenade Street to

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Acorn Street, then heading south on Acorn Street to the intersection of Acorn Street and Harris

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Avenue. The named streets are included in the Providence district; and in Pawtucket is defined as

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the area beginning at the point of intersection of Dexter Street and the Central Falls line, then east

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along the Central Falls line to the Blackstone River, then north along the city boundary on the

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Blackstone River to the Cumberland line, then west along the Pawtucket city boundary line to I-

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95, then south along I-95 to Pine Street, then north on Pine Street to AMTRAK Right of Way,

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then northwest along the AMTRAK Right of Way to Dexter Street, then north on Dexter Street to

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the Central Falls line. The named streets are included in the district. The Westerly arts and

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entertainment district is defined as assessor's plat 56, lots 1 through 24, lot 48, lots 50 through 62,

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and lots 71 through 82, and assessors plat 66, lots 22 through 26, and lots 29 through 36 the

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Woonsocket arts and entertainment district is defined as the area beginning at a point of land on

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the southwest bank of the Blackstone River abutting the bridge for the Providence & Worcester

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Railroad and proceeding northerly to a point at the intersection of Worrall Street, Clinton Street

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and Harry S. Truman Drive, then proceeding northwesterly along Worrall Street to its intersection

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with Social Street, then turning westerly on Social Street proceeding to its intersection with Main

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Street, Blackstone Street and North Main Street, then turning northwesterly and proceeding along

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Blackstone Street to its intersection with River Street, then turning northerly and proceeding

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along River Street to its intersection with the north/east bank of Blackstone River, then following

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the riverbank southerly to the bridge at Bernon Street and turning easterly crossing the Blackstone

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River via Bernon Street and proceeding to its intersection with Front Street, then turning

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northeasterly on Front Street and proceeding to its intersection with Hamlet Avenue, and to

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include the former courthouse on the southerly side of Front Street at its intersection with Hamlet

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Avenue, then turning easterly on Hamlet Avenue and proceeding to its intersection with Manville

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Road, then turning southeasterly on Manville Road and proceeding to its intersection with

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Davison Avenue, then turning northeasterly on Davison Avenue and proceeding to a point on the

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south/west bank of the Blackstone River, then turning northerly, following the southerly

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riverbank to the point of beginning. The abovementioned streets are included in the district. The

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Warwick arts district is defined as that area known as Pontiac Village, beginning on Route 5 at

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the Warwick/Cranston municipal boundary, then south to the intersection of Route 5 and the

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Pawtuxet River, then following the Pawtuxet River in an easterly and northerly direction to the

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municipal boundary in the vicinity of Knight Street, then from the intersection of Knight Street

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and the municipal boundary westerly along the Warwick/Cranston municipal boundary to the

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intersection of Route 5 and Greenwich Avenue. The above named streets are included in the

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district.

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      (ii) Who is determined by the tax administrator, after consideration of any evidence he or

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she deems necessary or which is submitted to him or her by the individual, to have written,

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composed, or executed, either solely or jointly, a work or works which would fall into one of the

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categories listed in subsection (b)(1).

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      (2) This section also applies to sales by any other gallery located in the arts and

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entertainment district described in subsection (c)(1)(i) as well as any other arts and entertainment

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district designated by the general assembly, as well as to sales by any other gallery located in

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those areas within the city of Newport, or the town of Little Compton, which are zoned "general

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business," "waterfront business," or "limited business" or have been designated by the city of

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Newport as part of the arts district, as well as to sales by any other gallery located in those areas

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within the town of Warren which are zoned "waterfront district," "special district," "village

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business district," "manufacturing district," "business district" or "Warren historic district," as

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well as to sales by any other gallery located in those areas within the town of Tiverton which are

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zoned "business commercial," "business waterfront" or "village commercial."

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      (3) The tax administrator shall not make a determination unless:

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      (i) The individual(s) concerned duly make(s) an application to the tax administrator for

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the sales tax exemption which applies to the works defined in this section; and

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      (ii) The individual has complied and continues to comply with any and all requests made

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by the tax administrator.

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      (d) Any individual to whom this section applies and who makes an application to the tax

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administrator is entitled to a sales tax exemption for the sale of a work or works sold from the

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individual's business located in the economic development zone which would, apart from this

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section, be subject to the tax rate imposed by the state of Rhode Island.

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      (e) When an individual makes a request for the exemption, the tax administrator is

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entitled to all books, documents, or other evidence relating to the publication, production or

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creation of the works that may be deemed necessary by the tax administrator for the purposes of

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the exemption. The time period in which to provide this information is in the sole discretion of

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the tax administrator and specified in the notice.

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      (f) In addition to the information required in subsection (e), the tax administrator may

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require the individual(s) to submit an annual certified accounting of the numbers of works sold,

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the type of work sold, and the date of the sale. Failure to file this report may, in the sole discretion

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of the tax administrator, terminate the individual's eligibility for the exemption.

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      (g) Any person storing, using, or otherwise consuming in this state any work or works

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which is deemed to be exempt from the sales tax pursuant to this section is not liable for the use

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tax on the work or works.

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      (h) Notwithstanding the provisions of this section, any individual to whom this section

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may apply shall comply with all the administration, collection, and other provisions of chapters

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18 and 19 of this title.

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     44-18-30.C. Exemption from or stabilization of sales and use taxes for municipal

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economic development zones -- West Warwick. -- (a) Findings. - The general assembly makes

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the following findings of fact:

11-71

      (1) Various sections of several towns in the state, including, but not limited to, the town

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of West Warwick, are deteriorated, blighted areas which have created very difficult challenges to

11-73

economic development;

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      (2) Several areas of the state are in a distressed financial condition as defined by section

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45-13-12(b) and cannot finance economic development projects on its own without the

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participation of private enterprise;

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      (3) The general assembly has found that it is nearly impossible for private enterprise

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alone to meet these challenges;

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      (4) In certain sections of financially distressed communities, the serious challenges of

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economic development and/or redevelopment have not been met by private enterprise alone and

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the impact is being felt throughout the community;

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      (5) Legislation enacted to encourage redevelopment of the deteriorated, blighted areas

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through the formation of local redevelopment agencies has had very limited success;

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      (6) Various states, such as New Jersey, Pennsylvania and Michigan have had a great deal

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of success in generating economic development by exercising the authority to exempt and/or

11-86

stabilize taxes;

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      (7) The state of Rhode Island has generated economic growth by redirecting and/or

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exempting certain commercial and retail activity from the imposition of sales, use and income

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taxes with recent examples being the Providence Place Mall, the Arts Districts in the cities of

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Providence, Pawtucket and Westerly, and financial services and acquaculture industries;

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      (8) Most recently, municipalities in our state have had great success in attracting large

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commercial development, including financial services, manufacturing, and major energy

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facilities, due in large part to the authority to exempt and/or stabilize property, tangible and/or

11-94

inventory taxes;

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      (9) Attracting large non-residential developments or encouraging expansion of existing

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commercial entities can be extremely important to municipalities, where the quality of public

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education is largely dependent on the local tax base, thereby expanding the commercial tax base

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and reducing reliance upon the residential tax base;

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      (10) The ability to attract this development and increase the non-residential tax base, in

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turn, improves municipalities' ability to finance school systems, municipal services and

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infrastructure, thereby improving the quality of life;

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      (11) In addition to increasing the local non-residential tax base, this development creates

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construction jobs, permanent jobs, and spurs additional investment by private enterprises; and

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      (12) Providing authority to offer tax exemptions from, or to stabilize, the imposition of

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sales and use taxes will attract and assist in expanding, revitalizing and redeveloping the tax base

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in our municipalities, thereby providing long-term economic benefits and development.

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      (b) Exemption or stabilization of sales and use taxes imposed on sales from businesses

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located in a municipal economic development zone.

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      (1) In order to attract new construction and development in a municipal economic

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development zone (MED) as provided in this section, upon the designation of such a zone as set

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forth in subsection (c) of this section, all businesses engaging in qualifying sales and located in

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new construction in a MED zone (a MED zone business) shall be exempt from the requirement to

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charge and collect fifty percent (50%) of the current sales and use tax pursuant to sections 44-18-

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18 and 44-18-20 for a period of ten (10) years. Sales and use taxes collected in a MED zone shall

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be returned to the same MED zone in accordance with the provisions of this section. The ten (10)

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year exemption period for all MED zone businesses shall begin to run from the latest to occur of:

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(i) the date that is three (3) years from the effective date of the January session 2003 amendments

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[July 17, 2003] or (ii) the date that is two (2) years from the date upon which the city or town

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council designates the MED zone for its municipality; or (iii) the date the first MED zone

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business obtains a certification of exemption as set forth in subdivision (c)(6) of this section.

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      (2) For purposes of this section, "qualifying sales" for a MED zone business shall not

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include gambling activities, or the retail sales of motor vehicles, furniture, home furnishings

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including mattresses and oriental rugs, tobacco products, or packaged alcoholic beverages.

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      (3) "Qualifying sales" shall be sales at which the point of sale is located within the same

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MED zone and point of delivery is located within the same MED zone.

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      (c) Creation of the municipal economic development zone.

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      (1) The city or town council of a financially distressed community may designate in

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accordance with the provisions of this section one MED zone in the municipality, provided that

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the municipality is:

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      (i) A financially distressed community as defined by section 45-13-12(b), using the

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criteria set forth in section 45-13-12(b)(1) through (4);

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      (ii) Has a population less than fifty thousand (50,000) persons; and

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      (iii) The MED zone shall be a parcel of or contiguous parcels of land consisting in total

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of not less than ten (10) acres, but not more than thirty (30) acres in the area served by adequate

12-135

utilities and transportation facilities.

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      (2) The city or town council of any financially distressed city or town, as set forth in

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subdivision (1) of this subsection, in creating a MED zone, shall have the power and authority of

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a redevelopment agency, as provided in chapter 32 of title 45, to undertake the redevelopment of

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a MED zone.

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      (3) The city or town council, in designating a MED zone, shall after public notice,

13-141

hearing and vote as provided by section 45-32-4, comply with the plan requirements of section

13-142

45-32-8 and shall be responsible for carrying on the plan. The city or town council in

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implementing the MED zone plan shall have the power of eminent domain as set forth in section

13-144

45-32-24, and the provisions of sections 45-32-25 -- 45-32-41 shall apply to all such

13-145

condemnations.

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      (4) All sales and use taxes collected within a MED zone shall be reimbursed to the

13-147

municipality in which the MED zone is located, and may be expended by the municipality to

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implement the capital improvement component of the MED zone plan for MED zone property or

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for property located within one mile of the MED zone or for such other capital improvements as

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the municipality may determine are required to mitigate MED zone impacts.

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      (5) West Warwick. - The following area or portions of them of the town of West

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Warwick may be designated as the town's municipal economic development zone by the town

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council of the town of West Warwick after public notice, hearing and vote as provided in section

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45-32-4:

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      The area bounded generally by the East Coast Bike Path in the east, Archambault and

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Gardner Avenue in the north, Payan Street to Curson Street, Curson Street to McNiff, McNiff to

13-157

Barnes Street, Barnes Street to Nowicki Street to East Street, East Street to Blanchard Street,

13-158

Blanchard Street to West Street in the west, West Street to Washington Street, Washington Street

13-159

to Nolan Street, Nolan Street to the East Coast Bike Path in the south, all as more particularly

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described on the West Warwick municipal economic development zone map on file with the town

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clerk.

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      (6) The tax administrator shall issue a certification of exemption to the MED zone

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business at the time the business applies for its permit to make sales at retail and provides the tax

13-164

administrator with a MED zone business certificate issued by the town clerk stating that the

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business is located in new construction in the MED zone. The duration of the certificate shall be

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determined in accordance with subdivision (b)(1) of this section.

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      (7) No business shall be permitted to become a MED zone business or to receive a

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certificate of exemption pursuant to subdivision (6) of this subsection by relocating from any area

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within the state of Rhode Island but outside the MED zone to new construction within the MED

13-170

zone, unless the relocation results in the creation of new permanent employment positions that

14-1

increase the total employment of the business by not less than fifty percent (50%) of its average

14-2

total employment for the two (2) year period immediately preceding the year in which it applies

14-3

for its certificate of exemption. Any business that expands its operations by adding a new location

14-4

within the MED zone and then ceases to operate any of its locations within the state of Rhode

14-5

Island that existed prior to the establishment of the MED zone location shall immediately have its

14-6

certificate of exemption for the MED zone location revoked.

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     SECTION 3. Section 44-19-1 of the General Laws in Chapter 44-19 entitled "Sales and

14-8

Use Taxes - Enforcement and Collection" is hereby amended to read as follows:

14-9

     44-19-1. Annual permit required -- Retail business subject to sales tax -- Promotion

14-10

of shows -- Revocation of show permit. -- (a) (1) Every person desiring to engage in or conduct

14-11

within this state a business of making sales at retail, or engage in a business of renting living

14-12

quarters in any hotel, rooming house, or tourist camp, the gross receipts from which sales or

14-13

rental charges are required to be included in the measure of the tax imposed under chapter 18 of

14-14

this title, shall file with the tax administrator an application for a permit for each place of

14-15

business. The application shall be in a form, include information, and bear any signatures that the

14-16

tax administrator may require. At the time of making an application, the applicant shall pay to the

14-17

tax administrator a permit fee of ten dollars ($10.00) for each permit. Every permit issued under

14-18

this chapter expires on June 30 of each year.

14-19

      (2) Every permit holder shall annually, on or before February 1 of each year, renew its

14-20

permit by filing an application for renewal along with a ten dollar ($10.00) renewal fee. The

14-21

renewal permit is valid for the period July 1 of that calendar year through June 30 of the

14-22

subsequent calendar year unless otherwise canceled, suspended or revoked. All fees received

14-23

under this section are allocated to the tax administrator for enforcement and collection of all

14-24

taxes.

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      (b) Every promoter of a show shall, at least ten (10) days prior to the opening of each

14-26

show, file with the tax administrator a notice stating the location and dates of the show, in a form

14-27

prescribed by the tax administrator.

14-28

      (2) The tax administrator shall, within five (5) days after the receipt of that notice, issue

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to the promoter, without charge, a permit to operate the show, unless the provisions of

14-30

subdivision (5) of this subsection have been applied to the promoter. No promoter may operate a

14-31

show without obtaining the permit. The permit shall be prominently displayed at the main

14-32

entrance of the show.

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      (3) Any promoter who is a retailer shall comply with all of the provisions of this chapter

14-34

and chapter 18 relating to retailers, in addition to all of the provisions of this chapter relating to

15-1

promoters.

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      (4) A promoter may not permit any person to display or sell tangible personal property,

15-3

services, or food and drink at a show unless that person is registered under subsection (a) of this

15-4

section and displays his or her permit in accordance with the provisions of subsection (a) of this

15-5

section.

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      (5) Any promoter who permits any person to display or sell tangible personal property,

15-7

services, or food and drink at a show who is not registered, or does not display a permit, or fails

15-8

to keep a record or file a monthly report of the name, address and permit number of every person

15-9

whom the promoter permitted to sell or display tangible personal property, services, or food and

15-10

drink at a show, is subject to revocation of all existing permits issued pursuant to this section to

15-11

operate a show, and to the denial of a permit to operate any show for a period of not more than

15-12

two (2) years, in addition to the provisions of section 44-19-31.

15-13

     (c) Notwithstanding the forgoing, the provisions of this section and of chapter 44-19 in its

15-14

entirety shall be of no force or effect as applied to any period during which the rate of tax

15-15

imposed under section 44-18-18 is zero (0). However, if a permit fee has been paid by a taxpayer

15-16

pursuant to subdivision (a)(2) above, the subsequent reduction of the tax rate to zero (0) or other

15-17

repeal of the tax during the period for which the permit applies shall not result in a rebate or

15-18

credit for the amount of any pro rata portion of the permit fee paid by a taxpayer.

15-19

     SECTION 4. This act shall take effect on October 1, 2013.

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LC01332

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION -- SALES TAX REPEAL ACT OF 2013

***

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     This act would repeal the Rhode Island sales tax.

16-2

     This act would take effect on October 1, 2013.

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LC01332

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