2015 -- H 5996

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LC002044

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION -- SALES AND USE TAXES--LIABILITY AND

COMPUTATION

     

     Introduced By: Representative Scott Slater

     Date Introduced: March 27, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 44-18-7, 44-18-12.1 and 44-18-36.1 of the General Laws in

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

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read as follows:

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     44-18-7. Sales defined. -- "Sales" means and includes:

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      (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or

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otherwise, in any manner or by any means of tangible personal property for a consideration.

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"Transfer of possession", "lease", or "rental" includes transactions found by the tax administrator

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to be in lieu of a transfer of title, exchange, or barter.

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      (2) The producing, fabricating, processing, printing, or imprinting of tangible personal

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property for a consideration for consumers who furnish either directly or indirectly the materials

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used in the producing, fabricating, processing, printing, or imprinting.

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      (3) The furnishing and distributing of tangible personal property for a consideration by

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social, athletic, and similar clubs and fraternal organizations to their members or others.

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      (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks,

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including any cover, minimum, entertainment, or other charge in connection therewith.

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      (5) A transaction whereby the possession of tangible personal property is transferred, but

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the seller retains the title as security for the payment of the price.

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      (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate

 

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commerce, of tangible personal property from the place where it is located for delivery to a point

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in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental,

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conditional or otherwise, in any manner or by any means whatsoever, of the property for a

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consideration.

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      (7) A transfer for a consideration of the title or possession of tangible personal property,

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which has been produced, fabricated, or printed to the special order of the customer, or any

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publication.

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      (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam,

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refrigeration, and water.

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      (9) (i) The furnishing for consideration of intrastate, interstate and international

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telecommunications service sourced in this state in accordance with subsections 44-18.1(15) and

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(16) and all ancillary services, any maintenance services of telecommunication equipment other

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than as provided for in subdivision 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this

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title only, telecommunication service does not include service rendered using a prepaid telephone

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calling arrangement.

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      (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance

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with the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 -- 126), subject to the

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specific exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8

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and 44-18-12, mobile telecommunications services that are deemed to be provided by the

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customer's home service provider are subject to tax under this chapter if the customer's place of

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primary use is in this state regardless of where the mobile telecommunications services originate,

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terminate or pass through. Mobile telecommunications services provided to a customer, the

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charges for which are billed by or for the customer's home service provider, shall be deemed to be

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provided by the customer's home service provider.

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      (10) The furnishing of service for transmission of messages by telegraph, cable, or radio

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and the furnishing of community antenna television, subscription television, and cable television

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services.

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      (11) The rental of living quarters in any hotel, as defined in § 42-63.1-2, rooming house,

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or tourist camp.

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      (12) The transfer for consideration of prepaid telephone calling arrangements and the

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recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§

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44-18.1-11 and 44-18.1-15. "Prepaid telephone calling arrangement" means and includes prepaid

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calling service and prepaid wireless calling service.

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      (13) The sale, storage, use or other consumption of over-the-counter drugs as defined in

 

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paragraph 44-18-7.1(h)(ii).

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      (14) The sale, storage, use or other consumption of prewritten computer software

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delivered electronically or by load and leave as defined in paragraph 44-18-7.1(v).

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      (15) The sale, storage, use or other consumption of medical marijuana as defined in § 21-

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28.6-3.

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      (16) The furnishing of services in this state as defined in § 44-18-7.3.

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     44-18-12.1. "Additional measure subject to tax". -- Also included in the measure

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subject to tax under this chapter is the total amount charged for the furnishing or distributing of

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electricity, natural gas, artificial gas, steam, refrigeration, water, telecommunications, telegraph,

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cable, and radio message service, community antenna television, subscription television, and

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cable television service; provided, that the measure of tax in regard to telecommunications service

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is the total consideration received for the service as defined in § 44-18-7(9); provided, that in

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order to prevent multistate taxation of all telecommunications service, any taxpayer is allowed a

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credit or refund of sales tax upon presenting proof that a tax has been paid to another state to

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which the tax is properly due for the identical service taxed under this chapter. Furthermore,

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included in the measure of tax is the total amount charged for the rental of living quarters in any

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hotel, as defined in § 42-63.1-2, rooming house, or tourist camp.

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     44-18-36.1. Hotel tax. -- (a) There is imposed a hotel tax of five percent (5%) upon the

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total consideration charged for occupancy of any space furnished by any hotel in this state. The

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hotel tax is in addition to any sales tax imposed. This hotel tax is administered and collected by

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

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collection, and other provisions of chapters 18 and 19 of this title apply. Nothing in this chapter

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shall be construed to limit the powers of the convention authority of the city of Providence

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established pursuant to the provisions of chapter 84 of the public laws of 1980, except that

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distribution of hotel tax receipts shall be made pursuant to chapter 63.1 of title 42 rather than

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chapter 84 of the public laws of 1980.

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      (b) There is hereby levied and imposed, upon the total consideration charged for

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occupancy of any space furnished by any hotel, as defined in § 42-63.1-2, in this state, in addition

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to all other taxes and fees now imposed by law, a local hotel tax at a rate of one percent (1%).

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The local hotel tax shall be administered and collected in accordance with subsection (a).

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      (c) All sums received by the division of taxation from the local hotel tax, 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 space for occupancy that is furnished by the

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hotel is located. 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 title shall apply.

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      (d) Notwithstanding the provisions of subsection (a) of this section, the city of Newport

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shall have the authority to collect from hotels, as defined in § 42-63.1-2, located in the city of

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Newport the tax imposed by subsection (a) of this section.

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      (1) Within ten (10) days of collection of the tax, the city of Newport shall distribute the

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tax as provided in § 42-63.1-3. No later than the first day of March and the first day of September

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in each year in which the tax is collected, the city of Newport shall submit to the division of

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taxation a report of the tax collected and distributed during the six (6) month period ending thirty

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(30) days prior to the reporting date.

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      (2) The city of Newport shall have the same authority as the division of taxation to

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recover delinquent hotel taxes pursuant to chapter 44-19, and the amount of any hotel tax, penalty

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and interest imposed by the city of Newport until collected constitutes a lien on the real property

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of the taxpayer.

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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 § 44-18-36.1(b) shall be one and one-half percent (1.5%).

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     SECTION 2. Section 42-63.1-2 of the General Laws in Chapter 42-63.1 entitled

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"Tourism and Development" is hereby amended to read as follows:

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     42-63.1-2. Definitions. -- For the purposes of this chapter:

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      (1) "Consideration" means the monetary charge for the use of space devoted to transient

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lodging accommodations.

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      (2) "Corporation" means the Rhode Island economic development corporation.

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      (3) "District" means the regional tourism districts set forth in § 42-63.1-5.

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      (4) "Hotel" means any facility offering a minimum of three (3) rooms one room or a

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portion of a room, for which the public may, for a consideration, obtain transient lodging

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accommodations. The term "hotel" shall include hotels, motels, bed and breakfasts (B&Bs),

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short-term rental units, time-shares as defined in § 34-41-1.02(13), tourist homes, tourist camps,

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lodging houses, schools renting one or more rooms to persons other than students, staff or faculty,

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and inns and shall exclude schools, hospitals, sanitariums, nursing homes, and chronic care

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centers.

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      (5) "Occupancy" means a person, firm or corporation's use of space ordinarily used for

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transient lodging accommodations not to exceed thirty (30) days. Excluded from "occupancy" is

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the use of space for which the occupant has a written lease for the space, which lease covers a

 

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rental period of twelve (12) months or more, as well as the right of a time-share owner, as defined

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in § 34-41-1.02(19), or a time-share exchange guest to use a time-share property, as defined in §

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34-41-1.02(22).

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     (6) "Short-term rental units" means a residential dwelling wherein a single room or

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portion thereof is available for rent or hire for less than thirty (30) days by guests.

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      (6)(7) "Tax" means the hotel tax imposed by subsection 44-18-36.1(a).

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     SECTION 3. This act shall take effect on July 1, 2015.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- SALES AND USE TAXES--LIABILITY AND

COMPUTATION

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     This act would expand the definition of a hotel for the purposes of liability and

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computation of the state sales and use tax.

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     This act would take effect on July 1, 2015.

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LC002044

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