2018 -- H 7343

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LC004201

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND

COMPUTATION

     

     Introduced By: Representatives Corvese, Canario, Azzinaro, Winfield, and Handy

     Date Introduced: January 31, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-18-30B of the General Laws in Chapter 44-18 entitled "Sales

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and Use Taxes - Liability and Computation" is hereby amended to read as follows:

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

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Findings.

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

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     (1) The arts and culture are a significant asset for Rhode Island, one that generates

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revenue through increased tourism and economic activity; creates jobs and economic

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opportunities; revitalizes communities adding to quality of life and property values; and fosters

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creativity, innovation, and entrepreneurship.

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     (2) Since 1998, the establishment of arts districts, where "one-of-a-kind, limited-

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production" works of art may be sold exempt from state sales tax, has resulted in an increased

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presence for the arts in designated cities and towns, with benefits to those communities and to the

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state.

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     (3) Since the establishment of arts districts, many communities have sought legislation to

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expand the program to their city or town.

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     (4) There is value in expanding the arts district program statewide, providing incentives

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for the sale and purchase of art. This is a unique opportunity for Rhode Island to shape history,

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and gain an advantage over other states, by becoming the first-and-only state in the country to

 

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declare a statewide sales tax exemption on art. This will strengthen Rhode Island's identity as an

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arts-friendly destination and "State of the Arts".

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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 the state of Rhode Island. For the purposes of this section, a "work"

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means an original and creative work, whether written, composed, or executed for "one-of-a-kind,

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limited production" that falls into one of the following categories:

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     (i) A book of fiction or non-fiction, 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, print, photograph, 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; or

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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, commercial, 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 state of

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Rhode Island.

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     (ii) Who is determined by the tax administrator in consultation with the Rhode Island

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council on the arts, after consideration of any evidence he or she deems necessary or that is

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submitted to him or her by the individual, to have written, composed, or executed, either solely or

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jointly, a work or works that would fall into one of the categories listed in subsection (b)(1).

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     (2) This section also applies to sales by any other gallery located in the state of Rhode

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Island.

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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 that 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 State of Rhode Island that would, apart from this section, be

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

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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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     (4) The Rhode Island council on the arts will oversee the transition to a statewide arts

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district program and work with the state tourism agencies; local chambers of commerce; and

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advertising/marketing agencies to promote this program, and will coordinate its efforts with the

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city and town governments. The Rhode Island council on the arts may request, and shall receive,

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from any department, division, board, bureau, commission, or agency of the state any data,

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assistance, and resources, including additional personnel, that will enable it to properly carry out

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this program.

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     (5) The tax administrator, in cooperation with the Rhode Island council on the arts, will

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gather data to assess the overall impact of the statewide arts district program, and issue an annual

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report, including, but not be limited to, the impact of the tax exemption on employment, tourism,

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sales, and spending within the arts sector and adjacent businesses, and any other factors that

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describe the impact of the program.

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     SECTION 2. This act shall take effect upon passage.

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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 clarify that for purposes of its exemption from sales tax, a book would be

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of fiction or non-fiction.

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     This act would take effect upon passage.

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