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art.005/9/005/8/005/7/005/6/005/5/005/4/005/3/005/2/005/1

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     ARTICLE 5 AS AMENDED

RELATING TO TAXES, REVENUES AND FEES

     SECTION 1. Section 19-14-4 of the General Laws in Chapter 19-14 entitled "Licensed

Activities" is hereby amended to read as follows:

     19-14-4. Annual fee.

     (a) Each licensee shall pay an annual license fee as follows:

     (1) Each small-loan lender license and each branch certificate, the sum of five hundred fifty

dollars ($550);

     (2) Each loan-broker license and each branch certificate, the sum of five hundred fifty

dollars ($550);

     (3) Each lender license and each branch certificate, the sum of one thousand one hundred

dollars ($1,100);

     (4) Each sale of checks license, the sum of three hundred sixty dollars ($360);

     (5) Each check cashing license, the sum of three hundred sixty dollars ($360);

     (6) Each electronic money transfer license, the sum of three hundred sixty dollars ($360);

     (7) Each registration to provide debt-management services, the sum of two hundred dollars

($200);

     (8) Each mortgage-loan originator license, the sum of one four hundred dollars ($100 400);

and

     (9) Each third-party loan-servicer license and each branch certificate, the sum of one

thousand one hundred dollars ($1,100).

     (b) Any licensee who shall not pay the annual fee by December 31 of each year shall be

subject to a daily penalty of twenty-five dollars ($25) per day, subject to a maximum of seven

hundred fifty dollars ($750). The penalty shall be paid to the director to, and for the use of, the

state. The penalty may be waived for good cause by the director, or the director's designee, upon

written request.

     SECTION 2. Section 19-14.9-12 of the General Laws in Chapter 19-14.9 entitled "Rhode

Island Fair Debt Collection Practices Act" is hereby amended to read as follows:

     19-14.9-12. Registration required.

     (1) After July 1, 2008, no person shall engage within this state in the business of a debt

collector, or engage in soliciting the right to collect or receive payment for another of an account,

bill, or other indebtedness, or advertise for or solicit in print the right to collect or receive payment

for another of an account, bill, or other indebtedness, without first registering with the director, or

the director's designee.

     (2) The application for registration shall be in writing; shall contain information as the

director may determine; and shall be accompanied by a registration fee of one seven hundred fifty

dollars ($100 750).

     (3) The registration shall be for a period of one year. Each registration shall plainly state

the name of the registrant and the city or town with the name of the street and number, if any, of

the place where the business is to be carried on; provided that the business shall at all times be

conducted in the name of the registrant as it appears on the registration.

     (4) No person registered to act within this state as a debt collector shall do so under any

other name or at any other place of business than that named in the registration. The registration

shall be for a single location but may, with notification to the director, be moved to a different

location. A registration shall not be transferable or assignable.

     (5) This section shall not apply:

     (a) To the servicer of a debt by a mortgage; or

     (b) To any debt collector located out of this state, provided that the debt collector:

     (1) Is collecting debts on behalf of an out-of-state creditor for a debt that was incurred out

of state; and

     (2) Only collects debts in this state using interstate communication methods, including

telephone, facsimile, or mail.

     (c) To any regulated institution as defined under § 19-1-1, national banking association,

federal savings bank, federal savings and loan association, federal credit union, or any bank, trust

company, savings bank, savings and loan association, or credit union organized under the laws of

this state, or any other state of the United States, or any subsidiary of the above; but except as

provided herein, this section shall apply to a subsidiary or affiliate, as defined by the director, of an

exempted entity and of a bank holding company established in accordance with state or federal law.

     SECTION 3. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled "Licensing

of Health-Care Facilities" is hereby amended to read as follows:

     23-17-38.1. Hospitals -- Licensing fee.

     (a) There is also imposed a hospital licensing fee at the rate of five and eight hundred fifty-

six thousandths percent (5.856%) upon the net patient-services revenue of every hospital for the

hospital's first fiscal year ending on or after January 1, 2016, except that the license fee for all

hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent

(37%). The discount for Washington County hospitals is subject to approval by the Secretary of the

U.S. Department of Health and Human Services of a state plan amendment submitted by the

executive office of health and human services for the purpose of pursuing a waiver of the uniformity

requirement for the hospital license fee. This licensing fee shall be administered and collected by

the tax administrator, division of taxation within the department of revenue, and all the

administration, collection, and other provisions of chapter 51 of title 44 shall apply. Every hospital

shall pay the licensing fee to the tax administrator on or before July 10, 2018, and payments shall

be made by electronic transfer of monies to the general treasurer and deposited to the general fund.

Every hospital shall, on or before June 14, 2018, make a return to the tax administrator containing

the correct computation of net patient-services revenue for the hospital fiscal year ending

September 30, 2016, and the licensing fee due upon that amount. All returns shall be signed by the

hospital's authorized representative, subject to the pains and penalties of perjury.

     (b)(a) There is also imposed a hospital licensing fee at the rate of six percent (6%) upon

the net patient-services revenue of every hospital for the hospital's first fiscal year ending on or

after January 1, 2017, except that the license fee for all hospitals located in Washington County,

Rhode Island shall be discounted by thirty-seven percent (37%). The discount for Washington

County hospitals is subject to approval by the Secretary of the U.S. Department of Health and

Human Services of a state plan amendment submitted by the executive office of health and human

services for the purpose of pursuing a waiver of the uniformity requirement for the hospital license

fee. This licensing fee shall be administered and collected by the tax administrator, division of

taxation within the department of revenue, and all the administration, collection, and other

provisions of chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to the tax

administrator on or before July 10, 2019, and payments shall be made by electronic transfer of

monies to the general treasurer and deposited to the general fund. Every hospital shall, on or before

June 14, 2019, make a return to the tax administrator containing the correct computation of net

patient-services revenue for the hospital fiscal year ending September 30, 2017, and the licensing

fee due upon that amount. All returns shall be signed by the hospital's authorized representative,

subject to the pains and penalties of perjury.

     (b) There is also imposed a hospital licensing fee at the rate of six percent (6%) upon the

net patient-services revenue of every hospital for the hospital's first fiscal year ending on or after

January 1, 2018, except that the license fee for all hospitals located in Washington County, Rhode

Island shall be discounted by thirty-seven percent (37%). The discount for Washington County

hospitals is subject to approval by the Secretary of the U.S. Department of Health and Human

Services of a state plan amendment submitted by the executive office of health and human services

for the purpose of pursuing a waiver of the uniformity requirement for the hospital license fee. This

licensing fee shall be administered and collected by the tax administrator, division of taxation

within the department of revenue, and all the administration, collection, and other provisions of

chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to the tax administrator

on or before July 13, 2020, and payments shall be made by electronic transfer of monies to the

general treasurer and deposited to the general fund. Every hospital shall, on or before June 15,

2020, make a return to the tax administrator containing the correct computation of net patient-

services revenue for the hospital fiscal year ending September 30, 2018, and the licensing fee due

upon that amount. All returns shall be signed by the hospital's authorized representative, subject to

the pains and penalties of perjury.

     (c) There is also imposed a hospital licensing fee for state fiscal year 2021 against each

hospital in the state. The hospital licensing fee is equal to five percent (5.0%) of the net patient-

services revenue of every hospital for the hospital's first fiscal year ending on or after January 1,

2018, except that the license fee for all hospitals located in Washington County, Rhode Island shall

be discounted by thirty-seven percent (37%). The discount for Washington County hospitals is

subject to approval by the Secretary of the U.S. Department of Health and Human Services of a

state plan amendment submitted by the executive office of health and human services for the

purpose of pursuing a waiver of the uniformity requirement for the hospital license fee. This

licensing fee shall be administered and collected by the tax administrator, division of taxation

within the department of revenue, and all the administration, collection, and other provisions of

chapter 51 of title 44 shall apply. Every hospital shall pay the licensing fee to the tax administrator

on or before July 13, 2021, and payments shall be made by electronic transfer of monies to the

general treasurer and deposited to the general fund. Every hospital shall, on or before June 15,

2020, make a return to the tax administrator containing the correct computation of net patient-

services revenue for the hospital fiscal year ending September 30, 2018, and the licensing fee due

upon that amount. All returns shall be signed by the hospital's authorized representative, subject to

the pains and penalties of perjury.

     (c)(d) For purposes of this section the following words and phrases have the following

meanings:

     (1) "Hospital" means the actual facilities and buildings in existence in Rhode Island,

licensed pursuant to § 23-17-1 et seq. on June 30, 2010, and thereafter any premises included on

that license, regardless of changes in licensure status pursuant to chapter 17.14 of title 23 (hospital

conversions) and § 23-17-6(b) (change in effective control), that provides short-term acute inpatient

and/or outpatient care to persons who require definitive diagnosis and treatment for injury, illness,

disabilities, or pregnancy. Notwithstanding the preceding language, the negotiated Medicaid

managed care payment rates for a court-approved purchaser that acquires a hospital through

receivership, special mastership, or other similar state insolvency proceedings (which court-

approved purchaser is issued a hospital license after January 1, 2013) shall be based upon the newly

negotiated rates between the court-approved purchaser and the health plan, and such rates shall be

effective as of the date that the court-approved purchaser and the health plan execute the initial

agreement containing the newly negotiated rate. The rate-setting methodology for inpatient hospital

payments and outpatient hospital payments set forth in §§ 40-8-13.4(b) and 40-8-13.4(b)(2),

respectively, shall thereafter apply to negotiated increases for each annual twelve-month (12)

period as of July 1 following the completion of the first full year of the court-approved purchaser's

initial Medicaid managed care contract.

     (2) "Gross patient-services revenue" means the gross revenue related to patient care

services.

     (3) "Net patient-services revenue" means the charges related to patient care services less

(i) charges attributable to charity care; (ii) bad debt expenses; and (iii) contractual allowances.

     (d)(e) The tax administrator shall make and promulgate any rules, regulations, and

procedures not inconsistent with state law and fiscal procedures that he or she deems necessary for

the proper administration of this section and to carry out the provisions, policy, and purposes of

this section.

     (e)(f) The licensing fee imposed by this section (b) shall apply to hospitals as defined herein

that are duly licensed on July 1, 2018 2019, and shall be in addition to the inspection fee imposed

by § 23-17-38 and to any licensing fees previously imposed in accordance with § 23-17-38.1.

     (g) The licensing fee imposed by section (c) shall apply to hospitals as defined herein that

are duly licensed on July 1, 2020 and shall be in addition to the inspection fee imposed by § 23-17-

38 and to any licensing fees previously imposed in accordance with § 23-17-38.1.

     SECTION 4. Section 42-17.1-9.1 of the General Laws in Chapter 42-17.1 entitled

"Department of Environmental Management" is hereby amended to read as follows:

     42-17.1-9.1. User fees at state beaches, parks, and recreation areas.

     (a) The department of environmental management in pursuance of its administrative duties

and responsibilities may charge a user fee for any state beach, or recreational area under its

jurisdiction, and fees for the use of its services or facilities.

     (b) The fee may be on a daily or annual basis, or both, and may be based on vehicle parking

or other appropriate means. The fees may recognize the contribution of Rhode Island taxpayers to

support the facilities in relation to other users of the state's facilities. The fee structure may

acknowledge the need to provide for all people, regardless of circumstances.

     (c) An additional fee for camping and other special uses may be charged where appropriate.

Rates so charged should be comparable to equivalent commercial facilities.

     (d) All such fees shall be established after a public hearing.

     (e) All daily fees from beach parking, which shall also include fees charged and collected

at Ninigret conservation area and Charlestown breachway, shall be shared with the municipality in

which the facility is located on the basis of seventy-three percent (73%) retained by the state and

twenty-seven percent (27%) remitted to the municipality; provided, further, from July 1, 2016, until

October 1, 2016 2021, the beach fees charged and collected under this subsection shall be equal to

those in effect on June 30, 2011. Further, purchasers of season passes between May 14, 2016, and

June 30, 2016, shall be eligible to receive a credit for the difference between the amount of the July

1, 2016, fee and the amount originally paid. Said credits may be applied against the purchase of a

season pass in 2017.

     (f) Fifty percent (50%) of all user and concession fees received by the state shall be

deposited as general revenues. For the year beginning July 1, 1979, the proportion of user and

concession fees to be received by the state shall be sixty-five percent (65%); for the year beginning

July 1, 1980, eighty-five percent (85%); and for the year beginning July 1, 1981, and all years

thereafter, one hundred percent (100%). The general revenue monies appropriated are hereby

specifically dedicated to meeting the costs of development, renovation of, and acquisition of state-

owned recreation areas and for regular maintenance, repair and operation of state owned recreation

areas. Purchases of vehicles and equipment and repairs to facilities shall not exceed four hundred

thousand dollars ($400,000) annually. Notwithstanding the provisions of § 37-1-1 or any other

provision of the general laws, the director of the department of environmental management is

hereby authorized to accept any grant, devise, bequest, donation, gift, or assignment of money,

bonds, or other valuable securities for deposit in the same manner as provided above for user and

concession fees retained by the state.

     (g) No fee shall be charged to any school or other nonprofit organization provided that a

representative of the school or other organization gives written notice of the date and time of their

arrival to the facility.

     SECTION 5. Section 42-63.1-3 of the General Laws in Chapter 42-63.1 entitled "Tourism

and Development" is hereby amended to read as follows:

     42-63.1-3. Distribution of tax.

     (a) For returns and tax payments received on or before December 31, 2015, except as

provided in § 42-63.1-12, the proceeds of the hotel tax, excluding such portion of the hotel tax

collected from residential units offered for tourist or transient use through a hosting platform, shall

be distributed as follows by the division of taxation and the city of Newport:

     (1) Forty-seven percent (47%) of the tax generated by the hotels in the district, except as

otherwise provided in this chapter, shall be given to the regional tourism district wherein the hotel

is located; provided, however, that from the tax generated by the hotels in the city of Warwick,

thirty-one percent (31%) of the tax shall be given to the Warwick regional tourism district

established in § 42-63.1-5(a)(5) and sixteen percent (16%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors' Bureau established in § 42-63.1-11; and provided

further, that from the tax generated by the hotels in the city of Providence, sixteen percent (16%)

of that tax shall be given to the Greater Providence-Warwick Convention and Visitors' Bureau

established by § 42-63.1-11, and thirty-one percent (31%) of that tax shall be given to the

Convention Authority of the city of Providence established pursuant to the provisions of chapter

84 of the public laws of January, 1980; provided, however, that the receipts attributable to the

district as defined in § 42-63.1-5(a)(7) shall be deposited as general revenues, and that the receipts

attributable to the district as defined in § 42-63.1-5(a)(8) shall be given to the Rhode Island

commerce corporation as established in chapter 64 of title 42.

     (2) Twenty-five percent (25%) of the hotel tax shall be given to the city or town where the

hotel, which generated the tax, is physically located, to be used for whatever purpose the city or

town decides.

     (3) Twenty-one (21%) of the hotel tax shall be given to the Rhode Island commerce

corporation established in chapter 64 of title 42, and seven percent (7%) to the Greater Providence-

Warwick Convention and Visitors' Bureau.

     (b) For returns and tax payments received after December 31, 2015, except as provided in

§ 42-63.1-12, the proceeds of the hotel tax, excluding such portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

     (1) For the tax generated by the hotels in the Aquidneck Island district, as defined in § 42-

63.1-5, forty-two percent (42%) of the tax shall be given to the Aquidneck Island district, twenty-

five (25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-eight percent (28%) of

the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title

42.

     (2) For the tax generated by the hotels in the Providence district as defined in § 42-63.1-5,

twenty eight percent (28%) of the tax shall be given to the Providence district, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, twenty-three (23%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-four (24%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (3) For the tax generated by the hotels in the Warwick district as defined in § 42-63.1-5,

twenty-eight percent (28%) of the tax shall be given to the Warwick District, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, twenty-three percent (23%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-four (24%) of

the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title

42.

     (4) For the tax generated by the hotels in the Statewide district, as defined in § 42-63.1-5,

twenty-five percent (25%) of the tax shall be given to the city or town where the hotel, which

generated the tax, is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy

percent (70%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of title 42.

     (5) With respect to the tax generated by hotels in districts other than those set forth in

subdivisions (b)(1) through (b)(4), forty-two percent (42%) of the tax shall be given to the regional

tourism district, as defined in § 42-63.1-5, wherein the hotel is located, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick Convention

and Visitors Bureau established in § 42-63.1-11, and twenty-eight (28%) of the tax shall be given

to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (c) The For returns and tax payments received before July 1, 2019, the proceeds of the hotel

tax collected from residential units offered for tourist or transient use through a hosting platform

shall be distributed as follows by the division of taxation and the city of Newport: twenty-five

percent (25%) of the tax shall be given to the city or town where the residential unit, which

generated the tax, is physically located, and seventy-five percent (75%) of the tax shall be given to

the Rhode Island commerce corporation established in chapter 64 of title 42.

     (d) The Rhode Island commerce corporation shall be required in each fiscal year to spend

on the promotion and marketing of Rhode Island as a destination for tourists or businesses an

amount of money of no less than the total proceeds of the hotel tax it receives pursuant to this

chapter for such fiscal year.

     (e) Notwithstanding the foregoing provisions of this section, for returns and tax payments

received on or after July 1, 2016, and on or before June 30, 2017, except as provided in § 42-63.1-

12, the proceeds of the hotel tax, excluding such portion of the hotel tax collected from residential

units offered for tourist or transient use through a hosting platform, shall be distributed in

accordance with the distribution percentages established in subsections (a)(1) through (a)(3) of this

section by the division of taxation and the city of Newport.

     (f) For returns and tax payments received on or after July 1, 2018, except as provided in §

42-63.1-12, the proceeds of the hotel tax, excluding such portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

     (1) For the tax generated by the hotels in the Aquidneck Island district, as defined in § 42-

63.1-5, forty-five percent (45%) of the tax shall be given to the Aquidneck Island district, twenty-

five (25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five percent (25%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (2) For the tax generated by the hotels in the Providence district as defined in § 42-63.1-5,

thirty percent (30%) of the tax shall be given to the Providence district, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, twenty-four (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one (21%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (3) For the tax generated by the hotels in the Warwick district as defined in § 42-63.1-5,

thirty percent (30%) of the tax shall be given to the Warwick District, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one (21%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (4) For the tax generated by the hotels in the Statewide district, as defined in § 42-63.1-5,

twenty-five percent (25%) of the tax shall be given to the city or town where the hotel, which

generated the tax, is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy

percent (70%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of title 42.

     (5) With respect to the tax generated by hotels in districts other than those set forth in

subdivisions (b)(1) through (b)(4), forty-five percent (45%) of the tax shall be given to the regional

tourism district, as defined in § 42-63.1-5, wherein the hotel is located, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick Convention

and Visitors Bureau established in § 42-63.1-11, and twenty-five (25%) of the tax shall be given to

the Rhode Island commerce corporation established in chapter 64 of title 42.

     (g) For returns and tax payments received on or after July 1, 2019, except as provided in §

42-63.1-12, the proceeds of the hotel tax, including such portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

     (1) For the tax generated in the Aquidneck Island district, as defined in § 42-63.1-5, forty-

five percent (45%) of the tax shall be given to the Aquidneck Island district, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel or residential unit, which

generated the tax, is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five

percent (25%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of title 42.

     (2) For the tax generated in the Providence district as defined in § 42-63.1-5, thirty percent

(30%) of the tax shall be given to the Providence district, twenty-five percent (25%) of the tax shall

be given to the city or town where the hotel or residential unit, which generated the tax, is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one percent (21%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (3) For the tax generated in the Warwick district as defined in § 42-63.1-5, thirty percent

(30%) of the tax shall be given to the Warwick District, twenty-five percent (25%) of the tax shall

be given to the city or town where the hotel or residential unit, which generated the tax, is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one percent (21%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

     (4) For the tax generated in the Statewide district, as defined in § 42-63.1-5, twenty-five

percent (25%) of the tax shall be given to the city or town where the hotel or residential unit, which

generated the tax, is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy

percent (70%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of title 42.

     (5) With respect to the tax generated in districts other than those set forth in subsections

(g)(1) through (g)(4) of this section, forty-five percent (45%) of the tax shall be given to the regional

tourism district, as defined in § 42-63.1-5, wherein the hotel or residential unit is located, twenty-

five percent (25%) of the tax shall be given to the city or town where the hotel or residential unit,

which generated the tax, is physically located, five percent (5%) of the tax shall be given to the

Greater Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and

twenty-five percent (25%) of the tax shall be given to the Rhode Island commerce corporation

established in chapter 64 of title 42.

     SECTION 6. Section 42-142-8 of the General Laws in Chapter 42-142 entitled

"Department of Revenue" is hereby amended to read as follows:

     42-142-8. Collection unit.

     (a) The director of the department of revenue is authorized to establish within the

department of revenue a collection unit for the purpose of assisting state agencies in the collection

of debts owed to the state. The director of the department of revenue may enter into an agreement

with any state agency(ies) to collect any delinquent debt owed to the state.

     (b) The director of the department of revenue shall initially implement a pilot program to

assist the agency(ies) with the collection of delinquent debts owed to the state.

     (c) The agency(ies) participating in the pilot program shall refer to the collection unit

within the department of revenue, debts owed by delinquent debtors where the nature and amount

of the debt owed has been determined and reconciled by the agency and the debt is: (i) The subject

of a written settlement agreement and/or written waiver agreement and the delinquent debtor has

failed to timely make payments under said agreement and/or waiver and is therefore in violation of

the terms of said agreement and/or waiver; (ii) The subject of a final administrative order or

decision and the debtor has not timely appealed said order or decision; (iii) The subject of final

order, judgment or decision of a court of competent jurisdiction and the debtor has not timely

appealed said order, judgment or decision. The collection unit shall not accept a referral of any

delinquent debt unless it satisfies subsection (c)(i), (ii) or (iii) of this section.

     (d) Any agency(ies) entering into an agreement with the department of revenue to allow

the collection unit of the department to collect a delinquent debt owed to the state shall indemnify

the department of revenue against injuries, actions, liabilities, or proceedings arising from the

collection, or attempted collection, by the collection unit of the debt owed to the state.

     (e) Before referring a delinquent debt to the collection unit, the agency(ies) must notify the

debtor of its intention to submit the debt to the collection unit for collection and of the debtor's right

to appeal that decision not less than thirty (30) days before the debt is submitted to the collection

unit.

     (f) At such time as the agency(ies) refers a delinquent debt to the collection unit, the agency

shall: (i) Represent in writing to the collection unit that it has complied with all applicable state and

federal laws and regulations relating to the collection of the debt, including, but not limited to, the

requirement to provide the debtor with the notice of referral to the collection unit under subsection

(e) of this section; and (ii) Provide the collection unit personnel with all relevant supporting

documentation including, but not limited to, notices, invoices, ledgers, correspondence,

agreements, waivers, decisions, orders, and judgments necessary for the collection unit to attempt

to collect the delinquent debt.

     (g) The referring agency(ies) shall assist the collection unit by providing any and all

information, expertise, and resources deemed necessary by the collection unit to collect the

delinquent debts referred to the collection unit.

     (h) Upon receipt of a referral of a delinquent debt from an agency(ies), the amount of the

delinquent debt shall accrue interest at the an annual rate of interest established by law for the

referring agency or at an annual rate of 13%, whichever percentage rate is greater. with such rate

determined by adding two percent (2%) to the prime rate which was in effect on October 1 of the

preceding year; provided however, in no event shall the rate of interest exceed twenty-one percent

(21%) per annum nor be less than eighteen percent (18%) per annum.

     (i) Upon receipt of a referral of a delinquent debt from the agency(ies), the collection unit

shall provide the delinquent debtor with a "Notice of Referral" advising the debtor that:

     (1) The delinquent debt has been referred to the collection unit for collection; and

     (2) The collection unit will initiate, in its names, any action that is available under state law

for the collection of the delinquent debt, including, but not limited to, referring the debt to a third

party to initiate said action.

     (j) Upon receipt of a referral of a delinquent debt from an agency(ies), the director of the

department of revenue shall have the authority to institute, in its name, any action(s) that are

available under state law for collection of the delinquent debt and interest, penalties, and/or fees

thereon and to, with or without suit, settle the delinquent debt.

     (k) In exercising its authority under this section, the collection unit shall comply with all

state and federal laws and regulations related to the collection of debts.

     (l) Upon the receipt of payment from a delinquent debtor, whether a full or partial payment,

the collection unit shall disburse/deposit the proceeds of said payment in the following order:

     (1) To the appropriate federal account to reimburse the federal government funds owed to

them by the state from funds recovered; and

     (2) The balance of the amount collected to the referring agency.

     (m) Notwithstanding the above, the establishment of a collection unit within the department

of revenue shall be contingent upon an annual appropriation by the general assembly of amounts

necessary and sufficient to cover the costs and expenses to establish, maintain, and operate the

collection unit including, but not limited to, computer hardware and software, maintenance of the

computer system to manage the system, and personnel to perform work within the collection unit.

     (n) In addition to the implementation of any pilot program, the collection unit shall comply

with the provisions of this section in the collection of all delinquent debts under this section.

     (o) The department of revenue is authorized to promulgate rules and regulations as it deems

appropriate with respect to the collection unit.

     (p) By September 1, 2020, and each year thereafter, the department of revenue shall

specifically assess the performance, effectiveness, and revenue impact of the collections associated

with this section, including, but not limited to, the total amounts referred and collected by each

referring agency during the previous state fiscal year to the governor, the speaker of the house of

representatives, the president of the senate, the chairpersons of the house and senate finance

committees, and the house and senate fiscal advisors. Such report shall include the net revenue

impact to the state of the collection unit.

     (q) No operations of a collection unit pursuant to this chapter shall be authorized after June

30, 2021.

     SECTION 7. Sections 44-11-2.2 and 44-11-19 of the General Laws in Chapter 44-11

entitled "Business Corporation Tax" are hereby amended to read as follows:

     44-11-2.2. Pass-through entities -- Definitions -- Withholding -- Returns.

     (a) Definitions.

     (1) “Administrative Adjustment Request” means an administrative adjustment request filed

by a partnership under IRC section 6227.

     (2) “Audited Partnership” means a partnership or an entity taxed as a partnership federally

subject to a partnership level audit resulting in a federal adjustment.

     (3) “Direct Partner” means a partner that holds an interest directly in a partnership or pass-

through entity.

     (4) “Federal Adjustment” means a change to an item or amount determined under the

Internal Revenue Code (IRC) that is used by a taxpayer to compute Rhode Island tax owed whether

that change results from action by the IRS, including a partnership level audit, or the filing of an

amended federal return, federal refund claim, or an administrative adjustment request by the

taxpayer. A federal adjustment is positive to the extent that it increases state taxable income as

determined under Rhode Island state laws and is negative to the extent that it decreases state taxable

income as determined under Rhode Island state laws.

     (5) “Final Determination Date” means if the federal adjustment arises from an IRS audit or

other action by the IRS, the final determination date is the first day on which no federal adjustments

arising from that audit or other action remain to be finally determined, whether by IRS decision

with respect to which all rights of appeal have been waived or exhausted, by agreement, or, if

appealed or contested, by a final decision with respect to which all rights of appeal have been

waived or exhausted. For agreements required to be signed by the IRS and the taxpayer, the final

determination date is the date on which the last party signed the agreement.

     (6) “Final Federal Adjustment” means a federal adjustment after the final determination

date for that federal adjustment has passed.

     (7) “Indirect Partner” means a partner in a partnership or pass-through entity that itself

holds an interest directly, or through another indirect partner, in a partnership or pass-through

entity.

     (1) "Pass-through entity" means a corporation that for the applicable tax year is treated as

an S Corporation under IRC § 1362(a) [26 U.S.C. § 1362(a)], and a general partnership, limited

partnership, limited liability partnership, trust, or limited liability company that for the applicable

tax year is not taxed as a corporation for federal tax purposes under the state's check-the-box

regulation.

     (2)(8) "Member" means an individual who is a shareholder of an S corporation; a partner

in a general partnership, a limited partnership, or a limited liability partnership; a member of a

limited liability company; or a beneficiary of a trust;

     (3)(9) "Nonresident" means an individual who is not a resident of or domiciled in the state,

a business entity that does not have its commercial domicile in the state, and a trust not organized

in the state.

     (10) “Partner” means a person that holds an interest directly or indirectly in a partnership

or other pass-through entity.

     (11) “Partnership” means an entity subject to taxation under Subchapter K of the IRC.

     (12) “Partnership Level Audit” means an examination by the IRS at the partnership level

pursuant to Subchapter C of Title 26, Subtitle F, Chapter 63 of the IRC, as enacted by the Bipartisan

Budget Act of 2015, Public Law 114-74, which results in Federal Adjustments.

     (13) "Pass-through entity" means a corporation that for the applicable tax year is treated as

an S Corporation under IRC § 1362(a) [26 U.S.C. § 1362(a)], and a general partnership, limited

partnership, limited liability partnership, trust, or limited liability company that for the applicable

tax year is not taxed as a corporation for federal tax purposes under the state's check-the-box

regulation.

     (14) “Tiered Partner” means any partner that is a partnership or pass-through entity.

     (b) Withholding.

     (1) A pass-through entity shall withhold income tax at the highest Rhode Island

withholding tax rate provided for individuals or seven percent (7%) for corporations on the

member's share of income of the entity that is derived from or attributable to sources within this

state distributed to each nonresident member and pay the withheld amount in the manner prescribed

by the tax administrator. The pass-through entity shall be liable for the payment of the tax required

to be withheld under this section and shall not be liable to such member for the amount withheld

and paid over in compliance with this section. A member of a pass-through entity that is itself a

pass-through entity (a "lower-tier pass-through entity") shall be subject to this same requirement to

withhold and pay over income tax on the share of income distributed by the lower-tier pass-through

entity to each of its nonresident members. The tax administrator shall apply tax withheld and paid

over by a pass-through entity on distributions to a lower-tier pass-through entity to the withholding

required of that lower-tier pass-through entity.

     (2) A pass-through entity shall, at the time of payment made pursuant to this section, deliver

to the tax administrator a return upon a form prescribed by the tax administrator showing the total

amounts paid or credited to its nonresident members, the amount withheld in accordance with this

section, and any other information the tax administrator may require. A pass-through entity shall

furnish to its nonresident member annually, but not later than the fifteenth day of the third month

after the end of its taxable year, a record of the amount of tax withheld on behalf of such member

on a form prescribed by the tax administrator.

     (c) Notwithstanding subsection (b), a pass-through entity is not required to withhold tax

for a nonresident member if:

     (1) The member has a pro rata or distributive share of income of the pass-through entity

from doing business in, or deriving income from sources within, this state of less than $1,000 per

annual accounting period;

     (2) The tax administrator has determined by regulation, ruling, or instruction that the

member's income is not subject to withholding;

     (3) The member elects to have the tax due paid as part of a composite return filed by the

pass-through entity under subsection (d); or

     (4) The entity is a publicly traded partnership as defined by 26 U.S.C. § 7704(b) that is

treated as a partnership for the purposes of the Internal Revenue Code and that has agreed to file

an annual information return reporting the name, address, taxpayer identification number and other

information requested by the tax administrator of each unitholder with an income in the state in

excess of $500.

     (d) Composite return.

     (1) A pass-through entity may file a composite income tax return on behalf of electing

nonresident members reporting and paying income tax at the state's highest marginal rate on the

members' pro rata or distributive shares of income of the pass-through entity from doing business

in, or deriving income from sources within, this State.

     (2) A nonresident member whose only source of income within a state is from one or more

pass-through entities may elect to be included in a composite return filed pursuant to this section.

     (3) A nonresident member that has been included in a composite return may file an

individual income tax return and shall receive credit for tax paid on the member's behalf by the

pass-through entity.

     (e) Partnership Level Audit

     (1) A partnership shall report final federal adjustments pursuant to IRC section 6225(a)(2)

arising from a partnership level audit or an administrative adjustment request and make payments

by filing the applicable supplemental return as prescribed under § 44-11-2.2(e)(1)(ii), and as

required under § 44-11-19(b), in lieu of taxes owed by its direct and indirect partners.

     (i) Failure of the audited partnership or tiered partner to report final federal adjustments

pursuant to IRC section 6225(a) and 6225(c) or pay does not prevent the Ttax Aadministrator from

assessing the audited partnership, direct partners or indirect partners for taxes they owe, using the

best information available, in the event that a partnership or tiered partner fails to timely make any

report or payment required by § 44-11-19(b) for any reason.

     (ii) The tax administrator may promulgate rules and regulations, not inconsistent with law,

to carry into effect the provisions of this chapter.

     44-11-19. Supplemental returns -- Additional tax or refund.

     (a) Any taxpayer which fails to include in its return any items of income or assets or any

other information required by this chapter or by regulations prescribed in pursuance of this chapter

shall make a supplemental return disclosing these facts. Except in the case of final federal

adjustments that are required to be reported by a partnership and its partners using the procedures

under section (b) below, Aany taxpayer whose return to the collector of internal revenue, or whose

net income returned, shall be changed or corrected by any official of the United States government

in any respect affecting a tax imposed by this chapter including a return or other similar report filed

pursuant to IRC section 6225(c)(2), shall, within sixty (60) days after receipt of a notification of

the final adjustment and determination of the change or correction, make the supplemental return

required by this section (a).

     (b) Except for the distributive share of adjustments that have been reported as required

under section (a), partnerships and partners shall, within one hundred and eighty (180) days after

receipt of notification of the final federal adjustments arising from a partnership level audit or an

administrative adjustment, make the supplemental return and make payments as required by this

section (b).

     (b)(c) Upon the filing of a supplemental return the tax administrator shall examine the

return and shall determine any additional tax or refund that may be due and shall notify the taxpayer.

Any additional tax shall be paid within fifteen (15) days after the notification together with interest

at the annual rate provided by § 44-1-7 from the original due date of the return for the taxable year

to the date of payment of the additional tax. Any refund shall be made by the tax administrator

together with interest at the annual rate provided by § 44-1-7.1 from the date of payment of the tax

to the date of the refund.

     SECTION 8. Chapter 44-11 of the General Laws entitled "Business Corporation Tax" is

hereby amended by adding thereto the following section:

     44-11-2.3. Pass-through entities -- Election to pay state income tax at the entity level.

     (a) Definitions. As used in this section:

     (1) "Election" means the annual election to be made by the pass-through entity by filing

the prescribed tax form and remitting the appropriate tax.

     (2) "Net income" means the net ordinary income, net rental real estate income, other net

rental income, guaranteed payments, and other business income less specially allocated

depreciation and deductions allowed pursuant to § 179 of the United States Revenue Code (26

U.S.C. § 179), all of which would be reported on federal tax form schedules C and E. Net income

for purposes of this section does not include specially allocated investment income or any other

types of deductions.

     (3) "Owner" means an individual who is a shareholder of an S Corporation; a partner in a

general partnership, a limited partnership, or a limited liability partnership; a member of a limited

liability company, a beneficiary of a trust; or a sole proprietor.

     (4) "Pass-through entity" means a corporation that for the applicable tax year is treated as

an S Corporation under I.R.C. 1362(a) (26 U.S.C. § 1362(a)), or a general partnership, limited

partnership, limited liability partnership, trust, limited liability company or unincorporated sole

proprietorship that for the applicable tax year is not taxed as a corporation for federal tax purposes

under the state’s regulations.

     (5) "State tax credit" means the amount of tax paid by the pass-through entity at the entity

level which is passed through to an owner on a pro rata basis.

     (b) Elections.

     (1) For tax years beginning on or after January 1, 2019, a pass-through entity may elect to

pay the state tax at the entity level at the rate of five and ninety-nine hundredths percent (5.99%).

     (2) If a pass-through entity elects to pay an entity tax under this subsection, the entity shall

not have to comply with the provisions of § 44-11-2.2 regarding withholding on non-resident

owners. In that instance, the entity shall not have to comply with the provisions of § 44-11-2.2

regarding withholding on non-resident owners.

     (c) Reporting.

     (1) The pass-through entity shall report the pro rata share of the state income taxes paid by

the entity which sums will be allowed as a state tax credit for an owner on his or her personal

income tax return.

     (2) The pass-through entity shall also report the pro rata share of the state income taxes

paid by the entity as an income (addition) modification to be reported by an owner on his or her

personal income tax returns.

     (d) State tax credit shall be the amount of tax paid by the pass-through entity, at the entity

level, which is passed through to the owners, on a pro rata basis.

     (e) A similar type of tax imposed by another state on the owners' income paid at the state

entity level shall be deemed to be allowed as a credit for taxes paid to another jurisdiction in

accordance with the provisions of § 44-30-18.

     (f) "Combined reporting" as set forth in § 44-11-4.1 shall not apply to reporting under this

section.

     SECTION 9. Sections 44-18-7, 44-18-7.1, 44-18-7.3, 44-18-8, 44-18-15, 44-18-15.2, 44-

18-18, 44-18-18.1, 44-18-20, 44-18-21, 44-18-22, 44-18-23, 44-18-25 and 44-18-36.1 of the

General Laws in Chapter 44-18 entitled "Sales and Use Taxes - Liability and Computation" are

hereby amended to read as follows:

     44-18-7. Sales defined.

     "Sales" means and includes:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

consideration.

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

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

publication.

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

refrigeration, and water.

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

telecommunications service sourced in this state in accordance with §§ 44-18.1-15 and 44-18.1-16

and all ancillary services, and any maintenance services of telecommunication equipment other

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

telecommunication service does not include service rendered using a prepaid telephone calling

arrangement.

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

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

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

12, mobile telecommunications services that are deemed to be provided by the customer's home

service provider are subject to tax under this chapter if the customer's place of primary use is in this

state regardless of where the mobile telecommunications services originate, terminate, or pass

through. Mobile telecommunications services provided to a customer, the charges for which are

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

customer's home service provider.

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

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

services.

     (11) The rental of living quarters in any hotel, rooming house, or tourist camp.

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

recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§ 44-

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

calling service and prepaid wireless calling service.

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

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

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

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

     (15) The sale, storage, use, or other consumption of vendor-hosted prewritten computer

software as defined in § 44-18-7.1(g)(vii).

     (16) The sale, storage, use, or other consumption of specified digital products as defined in

44-18-7.1(x).

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

28.6-3.

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

     44-18-7.1. Additional definitions.

     (a) "Agreement" means the streamlined sales and use tax agreement.

     (b) "Alcoholic beverages" means beverages that are suitable for human consumption and

contain one-half of one percent (.5%) or more of alcohol by volume.

     (c) "Bundled transaction" is the retail sale of two or more products, except real property

and services to real property, where (1) The products are otherwise distinct and identifiable, and

(2) The products are sold for one non-itemized price. A "bundled transaction" does not include the

sale of any products in which the "sales price" varies, or is negotiable, based on the selection by

the purchaser of the products included in the transaction.

     (i) "Distinct and identifiable products" does not include:

     (A) Packaging -- such as containers, boxes, sacks, bags, and bottles -- or other materials --

such as wrapping, labels, tags, and instruction guides -- that accompany the "retail sale" of the

products and are incidental or immaterial to the "retail sale" thereof. Examples of packaging that

are incidental or immaterial include grocery sacks, shoeboxes, dry cleaning garment bags, and

express delivery envelopes and boxes.

     (B) A product provided free of charge with the required purchase of another product. A

product is "provided free of charge" if the "sales price" of the product purchased does not vary

depending on the inclusion of the products "provided free of charge."

     (C) Items included in the member state's definition of "sales price," pursuant to appendix

C of the agreement.

     (ii) The term "one non-itemized price" does not include a price that is separately identified

by product on binding sales or other supporting sales-related documentation made available to the

customer in paper or electronic form including, but not limited to, an invoice, bill of sale, receipt,

contract, service agreement, lease agreement, periodic notice of rates and services, rate card, or

price list.

     (iii) A transaction that otherwise meets the definition of a "bundled transaction" as defined

above, is not a "bundled transaction" if it is:

     (A) The "retail sale" of tangible personal property and a service where the tangible personal

property is essential to the use of the service, and is provided exclusively in connection with the

service, and the true object of the transaction is the service; or

     (B) The "retail sale" of services where one service is provided that is essential to the use or

receipt of a second service and the first service is provided exclusively in connection with the

second service and the true object of the transaction is the second service; or

     (C) A transaction that includes taxable products and nontaxable products and the "purchase

price" or "sales price" of the taxable products is de minimis.

     1. De minimis means the seller's "purchase price" or "sales price" of the taxable products

is ten percent (10%) or less of the total "purchase price" or "sales price" of the bundled products.

     2. Sellers shall use either the "purchase price" or the "sales price" of the products to

determine if the taxable products are de minimis. Sellers may not use a combination of the

"purchase price" and "sales price" of the products to determine if the taxable products are de

minimis.

     3. Sellers shall use the full term of a service contract to determine if the taxable products

are de minimis; or

     (D) The "retail sale" of exempt tangible personal property and taxable tangible personal

property where:

     1. The transaction includes "food and food ingredients", "drugs", "durable medical

equipment", "mobility enhancing equipment", "over-the-counter drugs", "prosthetic devices" (all

as defined in this section) or medical supplies; and

     2. Where the seller's "purchase price" or "sales price" of the taxable tangible personal

property is fifty percent (50%) or less of the total "purchase price" or "sales price" of the bundled

tangible personal property. Sellers may not use a combination of the "purchase price" and "sales

price" of the tangible personal property when making the fifty percent (50%) determination for a

transaction.

     (d) "Certified automated system (CAS)" means software certified under the agreement to

calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit

to the appropriate state, and maintain a record of the transaction.

     (e) "Certified service provider (CSP)" means an agent certified under the agreement to

perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on

its own purchases.

     (f) Clothing and related items.

     (i) "Clothing" means all human wearing apparel suitable for general use.

     (ii) "Clothing accessories or equipment" means incidental items worn on the person or in

conjunction with "clothing." "Clothing accessories or equipment" does not include "clothing",

"sport or recreational equipment", or "protective equipment."

     (iii) "Protective equipment" means items for human wear and designed as protection of the

wearer against injury or disease or as protections against damage or injury of other persons or

property but not suitable for general use. "Protective equipment" does not include "clothing",

"clothing accessories or equipment", and "sport or recreational equipment."

     (iv) "Sport or recreational equipment" means items designed for human use and worn in

conjunction with an athletic or recreational activity that are not suitable for general use. "Sport or

recreational equipment" does not include "clothing", "clothing accessories or equipment", and

"protective equipment."

     (g) Computer and related items.

     (i) "Computer" means an electronic device that accepts information in digital or similar

form and manipulates it for a result based on a sequence of instructions.

     (ii) "Computer software" means a set of coded instructions designed to cause a "computer"

or automatic data processing equipment to perform a task.

     (iii) "Delivered electronically" means delivered to the purchaser by means other than

tangible storage media.

     (iv) "Electronic" means relating to technology having electrical, digital, magnetic, wireless,

optical, electromagnetic, or similar capabilities.

     (v) "Load and leave" means delivery to the purchaser by use of a tangible storage media

where the tangible storage media is not physically transferred to the purchaser.

     (vi) "Prewritten computer software" means "computer software," including prewritten

upgrades, that is not designed and developed by the author or other creator to the specifications of

a specific purchaser. The combining of two (2) or more "prewritten computer software" programs

or prewritten portions thereof does not cause the combination to be other than "prewritten computer

software." "Prewritten computer software" includes software designed and developed by the author

or other creator to the specifications of a specific purchaser when it is sold to a person other than

the specific purchaser. Where a person modifies or enhances "computer software" of which the

person is not the author or creator, the person shall be deemed to be the author or creator only of

such person's modifications or enhancements. "Prewritten computer software" or a prewritten

portion thereof that is modified or enhanced to any degree, where such modification or

enhancement is designed and developed to the specifications of a specific purchaser, remains

"prewritten computer software"; provided, however, that where there is a reasonable, separately

stated charge or an invoice or other statement of the price given to the purchaser for such

modification or enhancement, such modification or enhancement shall not constitute "prewritten

computer software."

     (vii) "Vendor-hosted prewritten computer software" means prewritten computer software

that is accessed through the internet and/or a vendor-hosted server regardless of whether the access

is permanent or temporary and regardless of whether any downloading occurs.

     (h) Drugs and related items.

     (i) "Drug" means a compound, substance, or preparation, and any component of a

compound, substance, or preparation, other than "food and food ingredients," "dietary

supplements" or "alcoholic beverages":

     (A) Recognized in the official United States Pharmacopoeia, official Homeopathic

Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them;

or

     (B) Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease;

or

     (C) Intended to affect the structure or any function of the body.

     "Drug" shall also include insulin and medical oxygen whether or not sold on prescription.

     (ii) "Over-the-counter drug" means a drug that contains a label that identifies the product

as a drug as required by 21 C.F.R. § 201.66. The "over-the-counter drug" label includes:

     (A) A "Drug Facts" panel; or

     (B) A statement of the "active ingredient(s)" with a list of those ingredients contained in

the compound, substance, or preparation.

     "Over-the-counter drug" shall not include "grooming and hygiene products."

     (iii) "Grooming and hygiene products" are soaps and cleaning solutions, shampoo,

toothpaste, mouthwash, antiperspirants, and suntan lotions and screens, regardless of whether the

items meet the definition of "over-the-counter drugs."

     (iv) "Prescription" means an order, formula, or recipe issued in any form of oral, written,

electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of

the member state.

     (i) "Delivery charges" means charges by the seller of personal property or services for

preparation and delivery to a location designated by the purchaser of personal property or services

including, but not limited to: transportation, shipping, postage, handling, crating, and packing.

     "Delivery charges" shall not include the charges for delivery of "direct mail" if the charges

are separately stated on an invoice or similar billing document given to the purchaser.

     (j) "Direct mail" means printed material delivered or distributed by United States mail or

other delivery service to a mass audience or to addressees on a mailing list provided by the

purchaser or at the direction of the purchaser when the cost of the items are not billed directly to

the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by

the purchaser to the direct mail seller for inclusion in the package containing the printed material.

"Direct mail" does not include multiple items of printed material delivered to a single address.

     (k) "Durable medical equipment" means equipment including repair and replacement parts

for same which:

     (i) Can withstand repeated use; and

     (ii) Is primarily and customarily used to serve a medical purpose; and

     (iii) Generally is not useful to a person in the absence of illness or injury; and

     (iv) Is not worn in or on the body.

     Durable medical equipment does not include mobility enhancing equipment.

     (l) Food and related items.

     (i) "Food and food ingredients" means substances, whether in liquid, concentrated, solid,

frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are

consumed for their taste or nutritional value. "Food and food ingredients" does not include

"alcoholic beverages", "tobacco", "candy", "dietary supplements", and "soft drinks."

     (ii) "Prepared food" means:

     (A) Food sold in a heated state or heated by the seller;

     (B) Two (2) or more food ingredients mixed or combined by the seller for sale as a single

item; or

     (C) Food sold with eating utensils provided by the seller, including: plates, knives, forks,

spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used

to transport the food.

     "Prepared food" in (B) does not include food that is only cut, repackaged, or pasteurized

by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring

cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part

401.11 of its Food Code so as to prevent food borne illnesses.

     (iii) "Candy" means a preparation of sugar, honey, or other natural or artificial sweeteners

in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars,

drops, or pieces. "Candy" shall not include any preparation containing flour and shall require no

refrigeration.

     (iv) "Soft drinks" means non-alcoholic beverages that contain natural or artificial

sweeteners. "Soft drinks" do not include beverages that contain milk or milk products, soy, rice,

or similar milk substitutes, or greater than fifty percent (50%) of vegetable or fruit juice by volume.

     (v) "Dietary supplement" means any product, other than "tobacco", intended to supplement

the diet that:

     (A) Contains one or more of the following dietary ingredients:

     1. A vitamin;

     2. A mineral;

     3. An herb or other botanical;

     4. An amino acid;

     5. A dietary substance for use by humans to supplement the diet by increasing the total

dietary intake; or

     6. A concentrate, metabolite, constituent, extract, or combination of any ingredient

described above; and

     (B) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or

if not intended for ingestion in such a form, is not represented as conventional food and is not

represented for use as a sole item of a meal or of the diet; and

     (C) Is required to be labeled as a dietary supplement, identifiable by the "supplemental

facts" box found on the label and as required pursuant to 21 C.F.R. § 101.36.

     (m) "Food sold through vending machines" means food dispensed from a machine or other

mechanical device that accepts payment.

     (n) "Hotel" means every building or other structure kept, used, maintained, advertised as,

or held out to the public to be a place where living quarters are supplied for pay to transient or

permanent guests and tenants and includes a motel.

     (i) "Living quarters" means sleeping rooms, sleeping or housekeeping accommodations, or

any other room or accommodation in any part of the hotel, rooming house, or tourist camp that is

available for or rented out for hire in the lodging of guests.

     (ii) "Rooming house" means every house, boat, vehicle, motor court, or other structure

kept, used, maintained, advertised, or held out to the public to be a place where living quarters are

supplied for pay to transient or permanent guests or tenants, whether in one or adjoining buildings.

     (iii) "Tourist camp" means a place where tents or tent houses, or camp cottages, or cabins

or other structures are located and offered to the public or any segment thereof for human

habitation.

     (o) "Lease or rental" means any transfer of possession or control of tangible personal

property for a fixed or indeterminate term for consideration. A lease or rental may include future

options to purchase or extend. Lease or rental does not include:

     (i) A transfer of possession or control of property under a security agreement or deferred

payment plan that requires the transfer of title upon completion of the required payments;

     (ii) A transfer of possession or control of property under an agreement that requires the

transfer of title upon completion of required payments and payment of an option price does not

exceed the greater of one hundred dollars ($100) or one percent of the total required payments; or

     (iii) Providing tangible personal property along with an operator for a fixed or

indeterminate period of time. A condition of this exclusion is that the operator is necessary for the

equipment to perform as designed. For the purpose of this subsection, an operator must do more

than maintain, inspect, or set-up the tangible personal property.

     (iv) Lease or rental does include agreements covering motor vehicles and trailers where the

amount of consideration may be increased or decreased by reference to the amount realized upon

sale or disposition of the property as defined in 26 U.S.C. § 7701(h)(1).

     (v) This definition shall be used for sales and use tax purposes regardless if a transaction

is characterized as a lease or rental under generally accepted accounting principles, the Internal

Revenue Code, the Uniform Commercial Code, or other provisions of federal, state, or local law.

     (vi) This definition will be applied only prospectively from the date of adoption and will

have no retroactive impact on existing leases or rentals. This definition shall neither impact any

existing sale-leaseback exemption or exclusions that a state may have, nor preclude a state from

adopting a sale-leaseback exemption or exclusion after the effective date of the agreement.

     (p) "Mobility enhancing equipment" means equipment, including repair and replacement

parts to same, that:

     (i) Is primarily and customarily used to provide or increase the ability to move from one

place to another and that is appropriate for use either in a home or a motor vehicle; and

     (ii) Is not generally used by persons with normal mobility; and

     (iii) Does not include any motor vehicle or equipment on a motor vehicle normally

provided by a motor vehicle manufacturer.

     Mobility enhancing equipment does not include durable medical equipment.

     (q) "Model 1 Seller" means a seller that has selected a CSP as its agent to perform all the

seller's sales and use tax functions, other than the seller's obligation to remit tax on its own

purchases.

     (r) "Model 2 Seller" means a seller that has selected a CAS to perform part of its sales and

use tax functions, but retains responsibility for remitting the tax.

     (s) "Model 3 Seller" means a seller that has sales in at least five member states, has total

annual sales revenue of at least five hundred million dollars ($500,000,000), has a proprietary

system that calculates the amount of tax due each jurisdiction, and has entered into a performance

agreement with the member states that establishes a tax performance standard for the seller. As

used in this definition, a seller includes an affiliated group of sellers using the same proprietary

system.

     (t) "Prosthetic device" means a replacement, corrective, or supportive device including

repair and replacement parts for same worn on or in the body to:

     (i) Artificially replace a missing portion of the body;

     (ii) Prevent or correct physical deformity or malfunction; or

     (iii) Support a weak or deformed portion of the body.

     (u) "Purchaser" means a person to whom a sale of personal property is made or to whom a

service is furnished.

     (v) "Purchase price" applies to the measure subject to use tax and has the same meaning as

sales price.

     (w) "Seller" means a person making sales, leases, or rentals of personal property or

services.

     (x) Specified Digital Products

     (i) “Specified digital products” means electronically transferred:

     (A) “Digital Audio-Visual Works” which means a series of related images which, when

shown in succession, impart an impression of motion, together with accompanying sounds, if any;

     (B) “Digital Audio Works” which means works that result from the fixation of a series of

musical, spoken, or other sounds, including ringtones, and/or;

     (C) “Digital Books” which means works that are generally recognized in the ordinary and

usual sense as “books”.

     (ii) For purposes of the definition of “digital audio works”, “ringtones” means digitized

sound files that are downloaded onto a device and that may be used to alert the customer with

respect to a communication.

     (iii) For purposes of the definitions of “specified digital products”, “transferred

electronically” means obtained by the purchaser by means other than tangible storage media.

     (xy) "State" means any state of the United States and the District of Columbia.

     (yz) "Telecommunications" tax base/exemption terms.

     (i) Telecommunication terms shall be defined as follows:

     (A) "Ancillary services" means services that are associated with or incidental to the

provision of "telecommunications services", including, but not limited to, "detailed

telecommunications billing", "directory assistance", "vertical service", and "voice mail services".

     (B) "Conference bridging service" means an "ancillary service" that links two (2) or more

participants of an audio or video conference call and may include the provision of a telephone

number. "Conference bridging service" does not include the "telecommunications services" used

to reach the conference bridge.

     (C) "Detailed telecommunications billing service" means an "ancillary service" of

separately stating information pertaining to individual calls on a customer's billing statement.

     (D) "Directory assistance" means an "ancillary service" of providing telephone number

information, and/or address information.

     (E) "Vertical service" means an "ancillary service" that is offered in connection with one

or more "telecommunications services", which offers advanced calling features that allow

customers to identify callers and to manage multiple calls and call connections, including

"conference bridging services".

     (F) "Voice mail service" means an "ancillary service" that enables the customer to store,

send, or receive recorded messages. "Voice mail service" does not include any "vertical services"

that the customer may be required to have in order to utilize the "voice mail service".

     (G) "Telecommunications service" means the electronic transmission, conveyance, or

routing of voice, data, audio, video, or any other information or signals to a point, or between or

among points. The term "telecommunications service" includes such transmission, conveyance, or

routing in which computer processing applications are used to act on the form, code, or protocol of

the content for purposes of transmission, conveyance, or routing without regard to whether such

service is referred to as voice over internet protocol services or is classified by the Federal

Communications Commission as enhanced or value added. "Telecommunications service" does

not include:

     (1) Data processing and information services that allow data to be generated, acquired,

stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where

such purchaser's primary purpose for the underlying transaction is the processed data or

information;

     (2) Installation or maintenance of wiring or equipment on a customer's premises;

     (3) Tangible personal property;

     (4) Advertising, including, but not limited to, directory advertising;

     (5) Billing and collection services provided to third parties;

     (6) Internet access service;

     (7) Radio and television audio and video programming services, regardless of the medium,

including the furnishing of transmission, conveyance, and routing of such services by the

programming service provider. Radio and television audio and video programming services shall

include, but not be limited to, cable service as defined in 47 U.S.C. § 522(6) and audio and video

programming services delivered by commercial mobile radio service providers as defined in 47

C.F.R. § 20.3;

     (8) "Ancillary services"; or

     (9) Digital products "delivered electronically", including, but not limited to: software,

music, video, reading materials, or ring tones.

     (H) "800 service" means a "telecommunications service" that allows a caller to dial a toll-

free number without incurring a charge for the call. The service is typically marketed under the

name "800", "855", "866", "877", and "888" toll-free calling, and any subsequent numbers

designated by the Federal Communications Commission.

     (I) "900 service" means an inbound toll "telecommunications service" purchased by a

subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded

announcement or live service. "900 service" does not include the charge for: collection services

provided by the seller of the "telecommunications services" to the subscriber, or service or product

sold by the subscriber to the subscriber's customer. The service is typically marketed under the

name "900 service," and any subsequent numbers designated by the Federal Communications

Commission.

     (J) "Fixed wireless service" means a "telecommunications service" that provides radio

communication between fixed points.

     (K) "Mobile wireless service" means a "telecommunications service" that is transmitted,

conveyed, or routed regardless of the technology used, whereby the origination and/or termination

points of the transmission, conveyance, or routing are not fixed, including, by way of example only,

"telecommunications services" that are provided by a commercial mobile radio service provider.

     (L) "Paging service" means a "telecommunications service" that provides transmission of

coded radio signals for the purpose of activating specific pagers; such transmissions may include

messages and/or sounds.

     (M) "Prepaid calling service" means the right to access exclusively "telecommunications

services", which must be paid for in advance and that enables the origination of calls using an

access number or authorization code, whether manually or electronically dialed, and that is sold in

predetermined units or dollars of which the number declines with use in a known amount.

     (N) "Prepaid wireless calling service" means a "telecommunications service" that provides

the right to utilize "mobile wireless service", as well as other non-telecommunications services,

including the download of digital products "delivered electronically", content and "ancillary

services" which must be paid for in advance that is sold in predetermined units of dollars of which

the number declines with use in a known amount.

     (O) "Private communications service" means a telecommunications service that entitles the

customer to exclusive or priority use of a communications channel or group of channels between

or among termination points, regardless of the manner in which such channel or channels are

connected, and includes switching capacity, extension lines, stations, and any other associated

services that are provided in connection with the use of such channel or channels.

     (P) "Value-added non-voice data service" means a service that otherwise meets the

definition of "telecommunications services" in which computer processing applications are used to

act on the form, content, code, or protocol of the information or data primarily for a purpose other

than transmission, conveyance, or routing.

     (ii) "Modifiers of Sales Tax Base/Exemption Terms" -- the following terms can be used to

further delineate the type of "telecommunications service" to be taxed or exempted. The terms

would be used with the broader terms and subcategories delineated above.

     (A) "Coin-operated telephone service" means a "telecommunications service" paid for by

inserting money into a telephone accepting direct deposits of money to operate.

     (B) "International" means a "telecommunications service" that originates or terminates in

the United States and terminates or originates outside the United States, respectively. United States

includes the District of Columbia or a U.S. territory or possession.

     (C) "Interstate" means a "telecommunications service" that originates in one United States

state, or a United States territory or possession, and terminates in a different United States state or

a United States territory or possession.

     (D) "Intrastate" means a "telecommunications service" that originates in one United States

state or a United States territory or possession, and terminates in the same United States state or a

United States territory or possession.

     (E) "Pay telephone service" means a "telecommunications service" provided through any

pay telephone.

     (F) "Residential telecommunications service" means a "telecommunications service" or

"ancillary services" provided to an individual for personal use at a residential address, including an

individual dwelling unit such as an apartment. In the case of institutions where individuals reside,

such as schools or nursing homes, "telecommunications service" is considered residential if it is

provided to and paid for by an individual resident rather than the institution.

     The terms "ancillary services" and "telecommunications service" are defined as a broad

range of services. The terms "ancillary services" and "telecommunications service" are broader

than the sum of the subcategories. Definitions of subcategories of "ancillary services" and

"telecommunications service" can be used by a member state alone or in combination with other

subcategories to define a narrower tax base than the definitions of "ancillary services" and

"telecommunications service" would imply. The subcategories can also be used by a member state

to provide exemptions for certain subcategories of the more broadly defined terms.

     A member state that specifically imposes tax on, or exempts from tax, local telephone or

local telecommunications service may define "local service" in any manner in accordance with §

44-18.1-28, except as limited by other sections of this Agreement.

     (zaa) "Tobacco" means cigarettes, cigars, chewing, or pipe tobacco, or any other item that

contains tobacco.

     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 2017 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 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. 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

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.

     (5) Investigation, Guard, and Armored Car Services (56161 561611, 561612 & 561613).

     (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 35 of title 42 to carry out the provisions, policies, and purposes of

this chapter.

     44-18-8. Retail sale or sale at retail defined.

     A "retail sale" or "sale at retail" means any sale, lease, or rentals of tangible personal

property, prewritten computer software delivered electronically or by load and leave, vendor-hosted

prewritten computer software, specified digital products, or services as defined in § 44-18-7.3 for

any purpose other than resale, sublease, or subrent in the regular course of business. The sale of

tangible personal property to be used for purposes of rental in the regular course of business is

considered to be a sale for resale. In regard to telecommunications service as defined in § 44-18-

7(9), retail sale does not include the purchase of telecommunications service by a

telecommunications provider from another telecommunication provider for resale to the ultimate

consumer; provided, that the purchaser submits to the seller a certificate attesting to the

applicability of this exclusion, upon receipt of which the seller is relieved of any tax liability for

the sale.

     44-18-15. "Retailer" defined.

     (a) "Retailer" includes:

     (1) Every person engaged in the business of making sales at retail including prewritten

computer software delivered electronically or by load and leave, vendor-hosted prewritten

computer software, specified digital products, sales of services as defined in § 44-18-7.3, and sales

at auction of tangible personal property owned by the person or others.

     (2) Every person making sales of tangible personal property including prewritten computer

software delivered electronically or by load and leave, or vendor-hosted prewritten computer

software or specified digital products, or sales of services as defined in § 44-18-7.3, through an

independent contractor or other representative, if the retailer enters into an agreement with a

resident of this state, under which the resident, for a commission or other consideration, directly or

indirectly refers potential customers, whether by a link on an internet website or otherwise, to the

retailer, provided the cumulative gross receipts from sales by the retailer to customers in the state

who are referred to the retailer by all residents with this type of an agreement with the retailer, is

in excess of five thousand dollars ($5,000) during the preceding four (4) quarterly periods ending

on the last day of March, June, September and December. Such retailer shall be presumed to be

soliciting business through such independent contractor or other representative, which presumption

may be rebutted by proof that the resident with whom the retailer has an agreement did not engage

in any solicitation in the state on behalf of the retailer that would satisfy the nexus requirement of

the United States Constitution during such four (4) quarterly periods.

     (3) Every person engaged in the business of making sales for storage, use, or other

consumption of: (i) tangible personal property, (ii) sales at auction of tangible personal property

owned by the person or others, (iii) prewritten computer software delivered electronically or by

load and leave, (iv) vendor-hosted prewritten computer software, (v) specified digital products, and

(vvi) services as defined in § 44-18-7.3.

     (4) A person conducting a horse race meeting with respect to horses, which are claimed

during the meeting.

     (5) Every person engaged in the business of renting any living quarters in any hotel as

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

     (6) Every person maintaining a business within or outside of this state who engages in the

regular or systematic solicitation of sales of tangible personal property, prewritten computer

software delivered electronically or by load and leave, vendor-hosted prewritten computer

software, and/or specified digital products in this State by means of:

     (i) Advertising in newspapers, magazines, and other periodicals published in this state, sold

over the counter in this state or sold by subscription to residents of this state, billboards located in

this state, airborne advertising messages produced or transported in the airspace above this state,

display cards and posters on common carriers or any other means of public conveyance

incorporated or operated primarily in this state, brochures, catalogs, circulars, coupons, pamphlets,

samples, and similar advertising material mailed to, or distributed within this state to residents of

this state;

     (ii) Telephone;

     (iii) Computer assisted shopping networks; and

     (iv) Television, radio or any other electronic media, which is intended to be broadcast to

consumers located in this state.

     (b) When the tax administrator determines that it is necessary for the proper administration

of chapters 18 and 19 of this title to regard any salespersons, representatives, truckers, peddlers, or

canvassers as the agents of the dealers, distributors, supervisors, employers, or persons under whom

they operate or from whom they obtain the tangible personal property sold by them, irrespective of

whether they are making sales on their own behalf or on behalf of the dealers, distributors,

supervisors, or employers, the tax administrator may so regard them and may regard the dealers,

distributors, supervisors, or employers as retailers for purposes of chapters 18 and 19 of this title.

     44-18-15.2. "Remote seller" and "remote sale" defined -- Collection of sales and use

tax by remote seller.

     (a) As used in this section:

     (1) "Remote seller" means any seller, other than a marketplace facilitator or referrer, who

does not have a physical presence in this state and makes retail sales to purchasers.

     (b) Upon passage of any federal law authorizing states to require remote sellers to collect

and remit sales and use taxes, this state will require a remote seller making remote sales in the state

to pay, collect, and remit sales and use taxes at the rate imposed under § 44-18-18, and in

accordance with the provisions of this article, chapters 18.1 and 19 of this title, and applicable

federal law.

     44-18-18. Sales tax imposed.

     A tax is imposed upon sales at retail in this state including charges for rentals of living

quarters in hotels as defined in § 42-63.1-2, rooming houses, or tourist camps, at the rate of six

percent (6%) of the gross receipts of the retailer from the sales or rental charges; provided, that the

tax imposed on charges for the rentals applies only to the first period of not exceeding thirty (30)

consecutive calendar days of each rental; provided, further, that for the period commencing July 1,

1990, the tax rate is seven percent (7%). The tax is paid to the tax administrator by the retailer at

the time and in the manner provided. Excluded from this tax are those living quarters in hotels,

rooming houses, or tourist camps for which the occupant has a written lease for the living quarters

which lease covers a rental period of twelve (12) months or more. In recognition of the work being

performed by the streamlined sales and use tax governing board, upon passage of any federal law

that authorizes states to require remote sellers to collect and remit sales and use taxes, the rate

imposed under this section shall be reduced from seven percent (7%) to six and one-half percent

(6.5%). The six and one-half percent (6.5%) rate shall take effect on the date that the state requires

remote sellers to collect and remit sale and use taxes.

     44-18-18.1. Local meals and beverage tax.

     (a) There is hereby levied and imposed, upon every purchaser of a meal and/or beverage,

in addition to all other taxes and fees now imposed by law, a local meals and beverage tax upon

each and every meal and/or beverage sold within the state of Rhode Island in or from an eating

and/or drinking establishment, whether prepared in the eating and/or drinking establishment or not

and whether consumed at the premises or not, at a rate of one percent of the gross receipts. The tax

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

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

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

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

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

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

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

     (2) "Eating and/or drinking establishment" means and includes restaurants, bars, taverns,

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

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

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

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

like places of business that furnish or provide facilities for immediate consumption of food at tables,

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

primarily for the use of patrons in consuming products purchased at the location. Ordinarily, eating

establishment does not mean and include food stores and supermarkets. Eating establishments does

not mean "vending machines," a self-contained automatic device that dispenses for sale foods,

beverages, or confection products. Retailers selling prepared foods in bulk, either in customer-

furnished containers or in the seller's containers, for example "Soup and Sauce" establishments, are

deemed to be selling prepared foods ordinarily for immediate consumption and, as such, are

considered eating establishments.

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

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

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

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

the seller's premises or elsewhere, whether designated as breakfast, lunch, snack, dinner, supper, or

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

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

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

and other provisions of chapters 18 and 19 of this title apply.

     In recognition of the work being performed by the streamlined sales and use tax governing

board, upon passage of any federal law that authorizes states to require remote sellers to collect and

remit sales and use taxes, the rate imposed under this section shall be increased from one percent

(1%) to one and one-half percent (1.5%). The one and one-half percent (1.5%) rate shall take effect

on the date that the state requires remote sellers to collect and remit sales and use taxes.

     44-18-20. Use tax imposed.

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

tangible personal property; prewritten computer software delivered electronically or by load and

leave; vendor-hosted prewritten computer software; specified digital products; or services as

defined in § 44-18-7.3, including a motor vehicle, a boat, an airplane, or a trailer, purchased from

any retailer at the rate of six percent (6%) of the sale price of the property.

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

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

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

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

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

defined in § 31-1-5(a) -- (f) and also includes boat trailers, camping trailers, house trailers, and

mobile homes.

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

the imposition of a use tax and liability for this tax on certain casual sales, no tax is payable in any

casual sale:

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

of the transferor or seller;

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

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

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

to a tax imposed by this chapter;

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

partner; and

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

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

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

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

home; or

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

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

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

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

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

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

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

retail dollar value at the time of purchase of the motor vehicle by the applicable tax rate; provided,

that where the amount of the sale price exceeds the amount of the retail dollar value, the tax is

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

shown in the current issue of any nationally recognized, used-vehicle guide for appraisal purposes

in this state. On request within thirty (30) days by the taxpayer after payment of the tax, if the tax

administrator determines that the retail dollar value as stated in this subsection is inequitable or

unreasonable, he or she shall, after affording the taxpayer reasonable opportunity to be heard, re-

determine the tax.

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

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or specified digital products, or services as defined in § 44-18-7.3

during any twelve-month (12) period, including sales made in the capacity of assignee for the

benefit of creditors or receiver or trustee in bankruptcy, is considered a retailer within the provisions

of this chapter.

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

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

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

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

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

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

conducted in this state.

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

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

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

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

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

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

sales.

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

the rate of seven percent (7%). In recognition of the work being performed by the streamlined sales

and use tax governing board, upon passage of any federal law that authorizes states to require

remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the first (1st)

state fiscal quarter following the change, the rate imposed under § 44-18-18 shall be reduced from

seven percent (7.0%) to six and one-half percent (6.5%). The six and one- half percent (6.5%) rate

shall take effect on the date that the state requires remote sellers to collect and remit sales and use

taxes.

     44-18-21. Liability for use tax.

     (a) Every person storing, using, or consuming in this state tangible personal property,

including a motor vehicle, boat, airplane, or trailer, purchased from a retailer, and a motor vehicle,

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

retailer of boats, airplanes, or trailers respectively; or storing, using or consuming specified

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or specified digital products, or services as defined in § 44-18-7.3 is

liable for the use tax. The person's liability is not extinguished until the tax has been paid to this

state, except that a receipt from a retailer engaging in business in this state or from a retailer who

is authorized by the tax administrator to collect the tax under rules and regulations that he or she

may prescribe, given to the purchaser pursuant to the provisions of § 44-18-22, is sufficient to

relieve the purchaser from further liability for the tax to which the receipt refers.

     (b) Each person before obtaining an original or transferral registration for any article or

commodity in this state, which article or commodity is required to be licensed or registered in the

state, shall furnish satisfactory evidence to the tax administrator that any tax due under this chapter

with reference to the article or commodity has been paid, and for the purpose of effecting

compliance, the tax administrator, in addition to any other powers granted to him or her, may invoke

the provisions of § 31-3-4 in the case of a motor vehicle. The tax administrator, when he or she

deems it to be for the convenience of the general public, may authorize any agency of the state

concerned with the licensing or registering of these articles or commodities to collect the use tax

on any articles or commodities which the purchaser is required by this chapter to pay before

receiving an original or transferral registration. The general assembly shall annually appropriate a

sum that it deems necessary to carry out the purposes of this section. Notwithstanding the

provisions of §§ 44-18-19, 44-18-22, and 44-18-24, the sales or use tax on any motor vehicle and/or

recreational vehicle requiring registration by the administrator of the division of motor vehicles

shall not be added by the retailer to the sale price or charge but shall be paid directly by the

purchaser to the tax administrator, or his or her authorized deputy or agent as provided in this

section.

     (c) In cases involving total loss or destruction of a motor vehicle occurring within one

hundred twenty (120) days from the date of purchase and upon which the purchaser has paid the

use tax, the amount of the tax constitutes an overpayment. The amount of the overpayment may be

credited against the amount of use tax on any subsequent vehicle which the owner acquires to

replace the lost or destroyed vehicle or may be refunded, in whole or in part.

     44-18-22. Collection of use tax by retailer.

     Every retailer engaging in business in this state and making sales of tangible personal

property or prewritten computer software delivered electronically or by load and leave, or vendor-

hosted prewritten computer software, or specified digital products, or services as defined in § 44-

18-7.3, for storage, use, or other consumption in this state, not exempted under this chapter shall,

at the time of making the sales, or if the storage, use, or other consumption of the tangible personal

property, prewritten computer software delivered electronically or by load and leave, vendor-hosted

prewritten computer software, or specified digital products, or services as defined in § 44-18-7.3,

is not then taxable under this chapter, at the time the storage, use, or other consumption becomes

taxable, collect the tax from the purchaser and give to the purchaser a receipt in the manner and

form prescribed by the tax administrator.

     44-18-23. "Engaging in business" defined.

     As used in §§ 44-18-21 and 44-18-22 the term "engaging in business in this state" means

the selling or delivering in this state, or any activity in this state related to the selling or delivering

in this state of tangible personal property or prewritten computer software delivered electronically

or by load and leave, or vendor-hosted prewritten computer software, or specified digital products,

for storage, use, or other consumption in this state; or services as defined in § 44-18-7.3 in this

state. This term includes, but is not limited to, the following acts or methods of transacting business:

     (1) Maintaining, occupying, or using in this state permanently or temporarily, directly or

indirectly or through a subsidiary, representative, or agent by whatever name called and whether or

not qualified to do business in this state, any office, place of distribution, sales or sample room or

place, warehouse or storage place, or other place of business;

     (2) Having any subsidiary, representative, agent, salesperson, canvasser, or solicitor

permanently or temporarily, and whether or not the subsidiary, representative, or agent is qualified

to do business in this state, operate in this state for the purpose of selling, delivering, or the taking

of orders for any tangible personal property, or prewritten computer software delivered

electronically or by load and leave, or vendor-hosted prewritten computer software, or specified

digital products, or services as defined in § 44-18-7.3;

     (3) The regular or systematic solicitation of sales of tangible personal property, or

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or specified digital products, or services as defined in § 44-18-7.3,

in this state by means of:

     (i) Advertising in newspapers, magazines, and other periodicals published in this state, sold

over the counter in this state or sold by subscription to residents of this state, billboards located in

this state, airborne advertising messages produced or transported in the air space above this state,

display cards and posters on common carriers or any other means of public conveyance

incorporated or operating primarily in this state, brochures, catalogs, circulars, coupons, pamphlets,

samples, and similar advertising material mailed to, or distributed within this state to residents of

this state;

     (ii) Telephone;

     (iii) Computer-assisted shopping networks; and

     (iv) Television, radio or any other electronic media, which is intended to be broadcast to

consumers located in this state.

     44-18-25. Presumption that sale is for storage, use, or consumption -- Resale

certificate.

     It is presumed that all gross receipts are subject to the sales tax, and that the use of all

tangible personal property, or prewritten computer software delivered electronically or by load and

leave, or vendor-hosted prewritten computer software, or specified digital products, or services as

defined in § 44-18-7.3, are subject to the use tax, and that all tangible personal property, or

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or specified digital products, or services as defined in § 44-18-7.3,

sold or in processing or intended for delivery or delivered in this state is sold or delivered for

storage, use, or other consumption in this state, until the contrary is established to the satisfaction

of the tax administrator. The burden of proving the contrary is upon the person who makes the sale

and the purchaser, unless the person who makes the sale takes from the purchaser a certificate to

the effect that the purchase was for resale. The certificate shall contain any information and be in

the form that the tax administrator may require.

     44-18-30. Gross receipts exempt from sales and use taxes.

     There are exempted from the taxes imposed by this chapter the following gross receipts:

     (1) Sales and uses beyond constitutional power of state. From the sale and from the storage,

use, or other consumption in this state of tangible personal property the gross receipts from the sale

of which, or the storage, use, or other consumption of which, this state is prohibited from taxing

under the Constitution of the United States or under the constitution of this state.

     (2) Newspapers.

     (i) From the sale and from the storage, use, or other consumption in this state of any

newspaper.

     (ii) "Newspaper" means an unbound publication printed on newsprint that contains news,

editorial comment, opinions, features, advertising matter, and other matters of public interest.

     (iii) "Newspaper" does not include a magazine, handbill, circular, flyer, sales catalog, or

similar item unless the item is printed for, and distributed as, a part of a newspaper.

     (3) School meals. From the sale and from the storage, use, or other consumption in this

state of meals served by public, private, or parochial schools, school districts, colleges, universities,

student organizations, and parent-teacher associations to the students or teachers of a school,

college, or university whether the meals are served by the educational institutions or by a food

service or management entity under contract to the educational institutions.

     (4) Containers.

     (i) From the sale and from the storage, use, or other consumption in this state of:

     (A) Non-returnable containers, including boxes, paper bags, and wrapping materials that

are biodegradable and all bags and wrapping materials utilized in the medical and healing arts,

when sold without the contents to persons who place the contents in the container and sell the

contents with the container.

     (B) Containers when sold with the contents if the sale price of the contents is not required

to be included in the measure of the taxes imposed by this chapter.

     (C) Returnable containers when sold with the contents in connection with a retail sale of

the contents or when resold for refilling.

     (D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage

producers who place the alcoholic beverages in the containers.

     (ii) As used in this subdivision, the term "returnable containers" means containers of a kind

customarily returned by the buyer of the contents for reuse. All other containers are "non-returnable