2018 -- H 8324

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LC005876

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

____________

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - TOURISM AND

DEVELOPMENT

     Introduced By: Representatives Carson, Fogarty, Vella-Wilkinson, Ruggiero, and
Donovan

     Date Introduced: June 15, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-63.1-14 of the General Laws in Chapter 42-63.1 entitled

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

     42-63.1-14. Offering residential units through a hosting platform.

     (a) For any residential unit offered for tourist or transient use on a hosting platform that

collects and remits applicable sales and hotel taxes in compliance with § 44-18-7.3(b)(4)(i), § 44-

18-18, and § 44-18-36.1, cities, towns or municipalities shall not prohibit the owner of such

residential unit from offering the unit for tourist or transient use through such hosting platform, or

prohibit such hosting platform from providing a person or entity the means to rent, pay for or

otherwise reserve a residential unit for tourist or transient use. A hosting platform shall comply

with the requirement imposed upon room resellers in § 44-18-7.3(b)(4)(i) and § 44-18-36.1 in

order for the prohibition of this section to apply. The division of taxation shall at the request of a

city, town, or municipality confirm whether a hosting platform is registered in compliance with §

44-18-7.3(b)(4)(i).

     (b) A hosting platform, prior to allowing any person or entity to offer any property for

tourist or transient use, shall use best practices to establish that the property and the rental of the

property is in compliance with:

     (1) All applicable local, state and federal laws and regulations governing rental and use of

the property; and

     (2) All applicable local registration requirements imposed pursuant to any city or town

code or ordinance on transient guest facilities or residential units used for tourist or transient

lodging.

     (c) A hosting platform which allows any person or entity to offer any residential unit for

tourist or transient use shall provide the owner of the residential unit with a monthly accounting

of any and all tax monies collected by the hosting platform; and, provided further, that such

accounting of taxes collected shall be remitted with any residential dwelling/room rental tax

return to the division of taxation and, if applicable, to the city of Newport.

     SECTION 2. Section 44-18-7.3 of the General Laws in Chapter 44-18 entitled "Sales and

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

     44-18-7.3. Services defined.

     (a) "Services" means all activities engaged in for other persons for a fee, retainer,

commission, or other monetary charge, which activities involve the performance of a service in

this state as distinguished from selling property.

     (b) The following businesses and services performed in this state, along with the

applicable 2007 North American Industrial Classification System (NAICS) codes, are included in

the definition of services:

     (1) Taxicab and limousine services including but not limited to:

     (i) Taxicab services including taxi dispatchers (485310); and

     (ii) Limousine services (485320).

     (2) Other road transportation service including but not limited to:

     (i) Charter bus service (485510);

     (ii) "Transportation network companies" (TNC) defined as an entity that uses a digital

network to connect transportation network company riders to transportation network operators

who provide prearranged rides. Any TNC operating in this state is a retailer as provided in § 44-

18-15 and is required to file a business application and registration form and obtain a permit to

make sales at retail with the tax administrator, to charge, collect, and remit Rhode Island sales

and use tax; and

     (iii) All other transit and ground passenger transportation (485999).

     (3) Pet care services (812910) except veterinary and testing laboratories services.

     (4) (i) "Room reseller" or "reseller" means any person, except a tour operator as defined

in § 42-63.1-2, having any right, permission, license, or other authority from or through a hotel as

defined in § 42-63.1-2, to reserve, or arrange the transfer of occupancy of, accommodations the

reservation or transfer of which is subject to this chapter, such that the occupant pays all or a

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portion of the rental and other fees to the room reseller or reseller, room reseller or reseller shall

include, but not be limited to, sellers of travel packages as defined in this section and any hosting

platform pursuant to § 42-63.1-2. Notwithstanding the provisions of any other law, where said

reservation or transfer of occupancy is done using a room reseller or reseller, the application of

the sales and use tax under §§ 44-18-18 and 44-18-20, and the hotel tax under § 44-18-36.1 shall

be as follows: The room reseller or reseller is required to register with, and shall collect and pay

to, the tax administrator the sales and use and hotel taxes, with said taxes being calculated upon

the amount of rental and other fees paid by the occupant to the room reseller or reseller, less the

amount of any rental and other fees paid by the room reseller or reseller to the hotel. The hotel

shall collect and pay to the tax administrator said taxes upon the amount of rental and other fees

paid to the hotel by the room reseller or reseller and/or the occupant. No assessment shall be

made by the tax administrator against a hotel because of an incorrect remittance of the taxes

under this chapter by a room reseller or reseller. No assessment shall be made by the tax

administrator against a room reseller or reseller because of an incorrect remittance of the taxes

under this chapter by a hotel. If the hotel has paid the taxes imposed under this chapter, the

occupant and/or room reseller or reseller, as applicable, shall reimburse the hotel for said taxes. If

the room reseller or reseller has paid said taxes, the occupant shall reimburse the room reseller or

reseller for said taxes. Each hotel and room reseller or reseller shall add and collect, from the

occupant or the room reseller or the reseller, the full amount of the taxes imposed on the rental

and other fees. When added to the rental and other fees, the taxes shall be a debt owed by the

occupant to the hotel or room reseller or reseller, as applicable, and shall be recoverable at law in

the same manner as other debts. The amount of the taxes collected by the hotel and/or room

reseller or reseller from the occupant under this chapter shall be stated and charged separately

from the rental and other fees, and shall be shown separately on all records thereof, whether made

at the time the transfer of occupancy occurs, or on any evidence of the transfer issued or used by

the hotel or the room reseller or the reseller. A room reseller or reseller shall not be required to

disclose to the occupant the amount of tax charged by the hotel; provided, however, the room

reseller or reseller shall represent to the occupant that the separately stated taxes charged by the

room reseller or reseller include taxes charged by the hotel. No person shall operate a hotel in this

state, or act as a room reseller or reseller for any hotel in the state, unless the tax administrator has

issued a permit pursuant to § 44-19-1.

     (ii) "Travel package" means a room, or rooms, bundled with one or more other, separate

components of travel such as air transportation, car rental, or similar items, which travel package

is charged to the customer or occupant for a single, retail price. When the room occupancy is

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bundled for a single consideration, with other property, services, amusement charges, or any other

items, the separate sale of which would not otherwise be subject to tax under this chapter, the

entire single consideration shall be treated as the rental or other fees for room occupancy subject

to tax under this chapter; provided, however, that where the amount of the rental, or other fees for

room occupancy is stated separately from the price of such other property, services, amusement

charges, or other items, on any sales slip, invoice, receipt, or other statement given the occupant,

and such rental and other fees are determined by the tax administrator to be reasonable in relation

to the value of such other property, services, amusement charges, or other items, only such

separately stated rental and other fees will be subject to tax under this chapter. The value of the

transfer of any room, or rooms, bundled as part of a travel package may be determined by the tax

administrator from the room reseller's and/or reseller's and/or hotel's books and records that are

kept in the regular course of business.

     (c) All services as defined herein are required to file a business application and

registration form and obtain a permit to make sales at retail with the tax administrator, to charge,

collect, and remit Rhode Island sales and use tax.

     (d) The tax administrator is authorized to promulgate rules and regulations in accordance

with the provisions of chapter 42-35 to carry out the provisions, policies, and purposes of this

chapter.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - TOURISM AND

DEVELOPMENT

***

     This act would require hosting platforms of tourist and transient rental units to provide an

accounting to residential unit owners of any tax monies collected and to follow local, state and

federal laws on rental and use and requires compliance with any local registration requirements.

     This act would take effect upon passage.

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