2020 -- H 7532 | |
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LC004445 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
____________ | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND | |
COMPUTATION | |
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Introduced By: Representatives Kennedy, Abney, Edwards, Azzinaro, and O'Brien | |
Date Introduced: February 12, 2020 | |
Referred To: House Finance | |
(Dept. of Revenue) | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Sections 44-18-7 and 44-18-7.1 of the General Laws in Chapter 44-18 |
2 | entitled "Sales and Use Taxes - Liability and Computation" are hereby amended to read as |
3 | follows: |
4 | 44-18-7. Sales defined. |
5 | "Sales" means and includes: |
6 | (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or |
7 | otherwise, in any manner or by any means of tangible personal property for a consideration. |
8 | "Transfer of possession," "lease," or "rental" includes transactions found by the tax administrator |
9 | to be in lieu of a transfer of title, exchange, or barter. |
10 | (2) The producing, fabricating, processing, printing, or imprinting of tangible personal |
11 | property for a consideration for consumers who furnish, either directly or indirectly, the materials |
12 | used in the producing, fabricating, processing, printing, or imprinting. |
13 | (3) The furnishing and distributing of tangible personal property for a consideration by |
14 | social, athletic, and similar clubs and fraternal organizations to their members or others. |
15 | (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks, |
16 | including any cover, minimum, entertainment, or other charge in connection therewith. |
17 | (5) A transaction whereby the possession of tangible personal property is transferred, but |
18 | the seller retains the title as security for the payment of the price. |
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1 | (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate |
2 | commerce, of tangible personal property from the place where it is located for delivery to a point |
3 | in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental, |
4 | conditional or otherwise, in any manner or by any means whatsoever, of the property for a |
5 | consideration. |
6 | (7) A transfer for a consideration of the title or possession of tangible personal property, |
7 | which has been produced, fabricated, or printed to the special order of the customer, or any |
8 | publication. |
9 | (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam, |
10 | refrigeration, and water. |
11 | (9)(i) The furnishing for consideration of intrastate, interstate, and international |
12 | telecommunications service sourced in this state in accordance with §§ 44-18.1-15 and 44-18.1- |
13 | 16 and all ancillary services, and any maintenance services of telecommunication equipment |
14 | other than as provided for in § 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this title |
15 | only, telecommunication service does not include service rendered using a prepaid telephone |
16 | calling arrangement. |
17 | (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance |
18 | with the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 -- 126), subject to the |
19 | specific exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8 |
20 | and 44-18-12, mobile telecommunications services that are deemed to be provided by the |
21 | customer's home service provider are subject to tax under this chapter if the customer's place of |
22 | primary use is in this state regardless of where the mobile telecommunications services originate, |
23 | terminate, or pass through. Mobile telecommunications services provided to a customer, the |
24 | charges for which are billed by or for the customer's home service provider, shall be deemed to be |
25 | provided by the customer's home service provider. |
26 | (10) The furnishing of service for transmission of messages by telegraph, cable, or radio |
27 | and the furnishing of community antenna television, subscription television, and cable television |
28 | services. |
29 | (11) The rental of living quarters in any hotel, rooming house, or tourist camp. |
30 | (12) The transfer for consideration of prepaid telephone calling arrangements and the |
31 | recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§ |
32 | 44-18.1-11 and 44-18.1-15. "Prepaid telephone calling arrangement" means and includes prepaid |
33 | calling service and prepaid wireless calling service. |
34 | (13) The sale, storage, use, or other consumption of over-the-counter drugs as defined in |
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1 | § 44-18-7.1(h)(ii). |
2 | (14) The sale, storage, use, or other consumption of prewritten computer software |
3 | delivered electronically or by load and leave as defined in § 44-18-7.1(g)(v). |
4 | (15) The sale, storage, use, or other consumption of vendor-hosted prewritten computer |
5 | software as defined in § 44-18-7.1(g)(vii). |
6 | (16) The sale to, or storage, use, or other consumption by an end-user of specified digital |
7 | products as defined in § 44-18-7.1(x), including the right to use the specified digital products on a |
8 | permanent or less than permanent basis and regardless of whether the purchaser is required to |
9 | make continued payments for such right. |
10 | (17) For the purposes of §§ 44-18-7(14) through 44-18-7(16) above, "sale" includes, but |
11 | is not limited to, any license, lease, or rental of the products enumerated in those sections. |
12 | (17)(18) The sale, storage, use, or other consumption of medical marijuana as defined in |
13 | § 21-28.6-3. |
14 | (18)(19) The furnishing of services in this state as defined in § 44-18-7.3. |
15 | 44-18-7.1. Additional definitions. |
16 | (a) "Agreement" means the streamlined sales and use tax agreement. |
17 | (b) "Alcoholic beverages" means beverages that are suitable for human consumption and |
18 | contain one-half of one percent (.5%) or more of alcohol by volume. |
19 | (c) "Bundled transaction" is the retail sale of two or more products, except real property |
20 | and services to real property, where (1) The products are otherwise distinct and identifiable, and |
21 | (2) The products are sold for one non-itemized price. A "bundled transaction" does not include |
22 | the sale of any products in which the "sales price" varies, or is negotiable, based on the selection |
23 | by the purchaser of the products included in the transaction. |
24 | (i) "Distinct and identifiable products" does not include: |
25 | (A) Packaging -- such as containers, boxes, sacks, bags, and bottles -- or other materials - |
26 | - such as wrapping, labels, tags, and instruction guides -- that accompany the "retail sale" of the |
27 | products and are incidental or immaterial to the "retail sale" thereof. Examples of packaging that |
28 | are incidental or immaterial include grocery sacks, shoeboxes, dry cleaning garment bags, and |
29 | express delivery envelopes and boxes. |
30 | (B) A product provided free of charge with the required purchase of another product. A |
31 | product is "provided free of charge" if the "sales price" of the product purchased does not vary |
32 | depending on the inclusion of the products "provided free of charge." |
33 | (C) Items included in the member state's definition of "sales price," pursuant to appendix |
34 | C of the agreement. |
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1 | (ii) The term "one non-itemized price" does not include a price that is separately |
2 | identified by product on binding sales or other supporting sales-related documentation made |
3 | available to the customer in paper or electronic form including, but not limited to, an invoice, bill |
4 | of sale, receipt, contract, service agreement, lease agreement, periodic notice of rates and |
5 | services, rate card, or price list. |
6 | (iii) A transaction that otherwise meets the definition of a "bundled transaction" as |
7 | defined above, is not a "bundled transaction" if it is: |
8 | (A) The "retail sale" of tangible personal property and a service where the tangible |
9 | personal property is essential to the use of the service, and is provided exclusively in connection |
10 | with the service, and the true object of the transaction is the service; or |
11 | (B) The "retail sale" of services where one service is provided that is essential to the use |
12 | or receipt of a second service and the first service is provided exclusively in connection with the |
13 | second service and the true object of the transaction is the second service; or |
14 | (C) A transaction that includes taxable products and nontaxable products and the |
15 | "purchase price" or "sales price" of the taxable products is de minimis. |
16 | 1. De minimis means the seller's "purchase price" or "sales price" of the taxable products |
17 | is ten percent (10%) or less of the total "purchase price" or "sales price" of the bundled products. |
18 | 2. Sellers shall use either the "purchase price" or the "sales price" of the products to |
19 | determine if the taxable products are de minimis. Sellers may not use a combination of the |
20 | "purchase price" and "sales price" of the products to determine if the taxable products are de |
21 | minimis. |
22 | 3. Sellers shall use the full term of a service contract to determine if the taxable products |
23 | are de minimis; or |
24 | (D) The "retail sale" of exempt tangible personal property and taxable tangible personal |
25 | property where: |
26 | 1. The transaction includes "food and food ingredients," "drugs," "durable medical |
27 | equipment," "mobility enhancing equipment," "over-the-counter drugs," "prosthetic devices" (all |
28 | as defined in this section) or medical supplies; and |
29 | 2. Where the seller's "purchase price" or "sales price" of the taxable tangible personal |
30 | property is fifty percent (50%) or less of the total "purchase price" or "sales price" of the bundled |
31 | tangible personal property. Sellers may not use a combination of the "purchase price" and "sales |
32 | price" of the tangible personal property when making the fifty percent (50%) determination for a |
33 | transaction. |
34 | (d) "Certified automated system (CAS)" means software certified under the agreement to |
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1 | calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to |
2 | remit to the appropriate state, and maintain a record of the transaction. |
3 | (e) "Certified service provider (CSP)" means an agent certified under the agreement to |
4 | perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on |
5 | its own purchases. |
6 | (f) Clothing and related items. |
7 | (i) "Clothing" means all human wearing apparel suitable for general use. |
8 | (ii) "Clothing accessories or equipment" means incidental items worn on the person or in |
9 | conjunction with "clothing." "Clothing accessories or equipment" does not include "clothing," |
10 | "sport or recreational equipment," or "protective equipment." |
11 | (iii) "Protective equipment" means items for human wear and designed as protection of |
12 | the wearer against injury or disease or as protections against damage or injury of other persons or |
13 | property but not suitable for general use. "Protective equipment" does not include "clothing," |
14 | "clothing accessories or equipment," and "sport or recreational equipment." |
15 | (iv) "Sport or recreational equipment" means items designed for human use and worn in |
16 | conjunction with an athletic or recreational activity that are not suitable for general use. "Sport or |
17 | recreational equipment" does not include "clothing," "clothing accessories or equipment," and |
18 | "protective equipment." |
19 | (g) Computer and related items. |
20 | (i) "Computer" means an electronic device that accepts information in digital or similar |
21 | form and manipulates it for a result based on a sequence of instructions. |
22 | (ii) "Computer software" means a set of coded instructions designed to cause a |
23 | "computer" or automatic data processing equipment to perform a task. |
24 | (iii) "Delivered electronically" means delivered to the purchaser by means other than |
25 | tangible storage media. |
26 | (iv) "Electronic" means relating to technology having electrical, digital, magnetic, |
27 | wireless, optical, electromagnetic, or similar capabilities. |
28 | (v) "Load and leave" means delivery to the purchaser by use of a tangible storage media |
29 | where the tangible storage media is not physically transferred to the purchaser. |
30 | (vi) "Prewritten computer software" means "computer software," including prewritten |
31 | upgrades, that is not designed and developed by the author or other creator to the specifications of |
32 | a specific purchaser. The combining of two (2) or more "prewritten computer software" |
33 | programs or prewritten portions thereof does not cause the combination to be other than |
34 | "prewritten computer software." "Prewritten computer software" includes software designed and |
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1 | developed by the author or other creator to the specifications of a specific purchaser when it is |
2 | sold to a person other than the specific purchaser. Where a person modifies or enhances |
3 | "computer software" of which the person is not the author or creator, the person shall be deemed |
4 | to be the author or creator only of such person's modifications or enhancements. "Prewritten |
5 | computer software" or a prewritten portion thereof that is modified or enhanced to any degree, |
6 | where such modification or enhancement is designed and developed to the specifications of a |
7 | specific purchaser, remains "prewritten computer software"; provided, however, that where there |
8 | is a reasonable, separately stated charge or an invoice or other statement of the price given to the |
9 | purchaser for such modification or enhancement, such modification or enhancement shall not |
10 | constitute "prewritten computer software." |
11 | (vii) "Vendor-hosted prewritten computer software" means prewritten computer software |
12 | that is accessed through the internet and/or a vendor-hosted server regardless of whether the |
13 | access is permanent or temporary and regardless of whether any downloading occurs. |
14 | (h) Drugs and related items. |
15 | (i) "Drug" means a compound, substance, or preparation, and any component of a |
16 | compound, substance, or preparation, other than "food and food ingredients," "dietary |
17 | supplements" or "alcoholic beverages": |
18 | (A) Recognized in the official United States Pharmacopoeia, official Homeopathic |
19 | Pharmacopoeia of the United States, or official National Formulary, and supplement to any of |
20 | them; or |
21 | (B) Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of |
22 | disease; or |
23 | (C) Intended to affect the structure or any function of the body. |
24 | "Drug" shall also include insulin and medical oxygen whether or not sold on prescription. |
25 | (ii) "Over-the-counter drug" means a drug that contains a label that identifies the product |
26 | as a drug as required by 21 C.F.R. § 201.66. The "over-the-counter drug" label includes: |
27 | (A) A "Drug Facts" panel; or |
28 | (B) A statement of the "active ingredient(s)" with a list of those ingredients contained in |
29 | the compound, substance, or preparation. |
30 | "Over-the-counter drug" shall not include "grooming and hygiene products." |
31 | (iii) "Grooming and hygiene products" are soaps and cleaning solutions, shampoo, |
32 | toothpaste, mouthwash, antiperspirants, and suntan lotions and screens, regardless of whether the |
33 | items meet the definition of "over-the-counter drugs." |
34 | (iv) "Prescription" means an order, formula, or recipe issued in any form of oral, written, |
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1 | electronic, or other means of transmission by a duly licensed practitioner authorized by the laws |
2 | of the member state. |
3 | (i) "Delivery charges" means charges by the seller of personal property or services for |
4 | preparation and delivery to a location designated by the purchaser of personal property or services |
5 | including, but not limited to: transportation, shipping, postage, handling, crating, and packing. |
6 | "Delivery charges" shall not include the charges for delivery of "direct mail" if the |
7 | charges are separately stated on an invoice or similar billing document given to the purchaser. |
8 | (j) "Direct mail" means printed material delivered or distributed by United States mail or |
9 | other delivery service to a mass audience or to addressees on a mailing list provided by the |
10 | purchaser or at the direction of the purchaser when the cost of the items are not billed directly to |
11 | the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by |
12 | the purchaser to the direct mail seller for inclusion in the package containing the printed material. |
13 | "Direct mail" does not include multiple items of printed material delivered to a single address. |
14 | (k) "Durable medical equipment" means equipment including repair and replacement |
15 | parts for same which: |
16 | (i) Can withstand repeated use; and |
17 | (ii) Is primarily and customarily used to serve a medical purpose; and |
18 | (iii) Generally is not useful to a person in the absence of illness or injury; and |
19 | (iv) Is not worn in or on the body. |
20 | Durable medical equipment does not include mobility enhancing equipment. |
21 | (l) Food and related items. |
22 | (i) "Food and food ingredients" means substances, whether in liquid, concentrated, solid, |
23 | frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are |
24 | consumed for their taste or nutritional value. "Food and food ingredients" does not include |
25 | "alcoholic beverages," "tobacco," "candy," "dietary supplements," and "soft drinks." |
26 | (ii) "Prepared food" means: |
27 | (A) Food sold in a heated state or heated by the seller; |
28 | (B) Two (2) or more food ingredients mixed or combined by the seller for sale as a single |
29 | item; or |
30 | (C) Food sold with eating utensils provided by the seller, including: plates, knives, forks, |
31 | spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used |
32 | to transport the food. |
33 | "Prepared food" in (B) does not include food that is only cut, repackaged, or pasteurized |
34 | by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring |
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1 | cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, |
2 | part 401.11 of its Food Code so as to prevent food borne illnesses. |
3 | (iii) "Candy" means a preparation of sugar, honey, or other natural or artificial sweeteners |
4 | in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, |
5 | drops, or pieces. "Candy" shall not include any preparation containing flour and shall require no |
6 | refrigeration. |
7 | (iv) "Soft drinks" means non-alcoholic beverages that contain natural or artificial |
8 | sweeteners. "Soft drinks" do not include beverages that contain milk or milk products, soy, rice, |
9 | or similar milk substitutes, or greater than fifty percent (50%) of vegetable or fruit juice by |
10 | volume. |
11 | (v) "Dietary supplement" means any product, other than "tobacco," intended to |
12 | supplement the diet that: |
13 | (A) Contains one or more of the following dietary ingredients: |
14 | 1. A vitamin; |
15 | 2. A mineral; |
16 | 3. An herb or other botanical; |
17 | 4. An amino acid; |
18 | 5. A dietary substance for use by humans to supplement the diet by increasing the total |
19 | dietary intake; or |
20 | 6. A concentrate, metabolite, constituent, extract, or combination of any ingredient |
21 | described above; and |
22 | (B) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or |
23 | if not intended for ingestion in such a form, is not represented as conventional food and is not |
24 | represented for use as a sole item of a meal or of the diet; and |
25 | (C) Is required to be labeled as a dietary supplement, identifiable by the "supplemental |
26 | facts" box found on the label and as required pursuant to 21 C.F.R. § 101.36. |
27 | (m) "Food sold through vending machines" means food dispensed from a machine or |
28 | other mechanical device that accepts payment. |
29 | (n) "Hotel" means every building or other structure kept, used, maintained, advertised as, |
30 | or held out to the public to be a place where living quarters are supplied for pay to transient or |
31 | permanent guests and tenants and includes a motel. |
32 | (i) "Living quarters" means sleeping rooms, sleeping or housekeeping accommodations, |
33 | or any other room or accommodation in any part of the hotel, rooming house, or tourist camp that |
34 | is available for or rented out for hire in the lodging of guests. |
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1 | (ii) "Rooming house" means every house, boat, vehicle, motor court, or other structure |
2 | kept, used, maintained, advertised, or held out to the public to be a place where living quarters are |
3 | supplied for pay to transient or permanent guests or tenants, whether in one or adjoining |
4 | buildings. |
5 | (iii) "Tourist camp" means a place where tents or tent houses, or camp cottages, or cabins |
6 | or other structures are located and offered to the public or any segment thereof for human |
7 | habitation. |
8 | (o) "Lease or rental" means any transfer of possession or control of tangible personal |
9 | property for a fixed or indeterminate term for consideration. A lease or rental may include future |
10 | options to purchase or extend. Lease or rental does not include: |
11 | (i) A transfer of possession or control of property under a security agreement or deferred |
12 | payment plan that requires the transfer of title upon completion of the required payments; |
13 | (ii) A transfer of possession or control of property under an agreement that requires the |
14 | transfer of title upon completion of required payments and payment of an option price does not |
15 | exceed the greater of one hundred dollars ($100) or one percent of the total required payments; or |
16 | (iii) Providing tangible personal property along with an operator for a fixed or |
17 | indeterminate period of time. A condition of this exclusion is that the operator is necessary for |
18 | the equipment to perform as designed. For the purpose of this subsection, an operator must do |
19 | more than maintain, inspect, or set-up the tangible personal property. |
20 | (iv) Lease or rental does include agreements covering motor vehicles and trailers where |
21 | the amount of consideration may be increased or decreased by reference to the amount realized |
22 | upon sale or disposition of the property as defined in 26 U.S.C. § 7701(h)(1). |
23 | (v) This definition shall be used for sales and use tax purposes regardless if a transaction |
24 | is characterized as a lease or rental under generally accepted accounting principles, the Internal |
25 | Revenue Code, the Uniform Commercial Code, or other provisions of federal, state, or local law. |
26 | (vi) This definition will be applied only prospectively from the date of adoption and will |
27 | have no retroactive impact on existing leases or rentals. This definition shall neither impact any |
28 | existing sale-leaseback exemption or exclusions that a state may have, nor preclude a state from |
29 | adopting a sale-leaseback exemption or exclusion after the effective date of the agreement. |
30 | (p) "Mobility enhancing equipment" means equipment, including repair and replacement |
31 | parts to same, that: |
32 | (i) Is primarily and customarily used to provide or increase the ability to move from one |
33 | place to another and that is appropriate for use either in a home or a motor vehicle; and |
34 | (ii) Is not generally used by persons with normal mobility; and |
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1 | (iii) Does not include any motor vehicle or equipment on a motor vehicle normally |
2 | provided by a motor vehicle manufacturer. |
3 | Mobility enhancing equipment does not include durable medical equipment. |
4 | (q) "Model 1 Seller" means a seller that has selected a CSP as its agent to perform all the |
5 | seller's sales and use tax functions, other than the seller's obligation to remit tax on its own |
6 | purchases. |
7 | (r) "Model 2 Seller" means a seller that has selected a CAS to perform part of its sales |
8 | and use tax functions, but retains responsibility for remitting the tax. |
9 | (s) "Model 3 Seller" means a seller that has sales in at least five member states, has total |
10 | annual sales revenue of at least five hundred million dollars ($500,000,000), has a proprietary |
11 | system that calculates the amount of tax due each jurisdiction, and has entered into a performance |
12 | agreement with the member states that establishes a tax performance standard for the seller. As |
13 | used in this definition, a seller includes an affiliated group of sellers using the same proprietary |
14 | system. |
15 | (t) "Prosthetic device" means a replacement, corrective, or supportive device including |
16 | repair and replacement parts for same worn on or in the body to: |
17 | (i) Artificially replace a missing portion of the body; |
18 | (ii) Prevent or correct physical deformity or malfunction; or |
19 | (iii) Support a weak or deformed portion of the body. |
20 | (u) "Purchaser" means a person to whom a sale of personal property is made or to whom |
21 | a service is furnished. |
22 | (v) "Purchase price" applies to the measure subject to use tax and has the same meaning |
23 | as sales price. |
24 | (w) "Seller" means a person making sales, leases, or rentals of personal property or |
25 | services. |
26 | (x) Specified digital products. |
27 | (i) "Specified digital products" means electronically transferred: |
28 | (A) "Digital audio-visual works" which means a series of related images which, when |
29 | shown in succession, impart an impression of motion, together with accompanying sounds, if any; |
30 | (B) "Digital audio works" which means works that result from the fixation of a series of |
31 | musical, spoken, or other sounds, including ringtones, and/or; |
32 | (C) "Digital books" which means works that are generally recognized in the ordinary and |
33 | usual sense as "books." |
34 | (ii) For purposes of the definition of "digital audio works," "ringtones" means digitized |
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1 | sound files that are downloaded onto a device and that may be used to alert the customer with |
2 | respect to a communication. |
3 | (iii) For purposes of the definitions of "specified digital products," "transferred |
4 | electronically" means obtained by the purchaser by means other than tangible storage media. |
5 | (iv) For the purposes of "specified digital products," "end user" includes any person other |
6 | than a person who receives by contract a product "transferred electronically" for further |
7 | broadcast, rebroadcast, transmission, retransmission, licensing, relicensing, distribution, |
8 | redistribution or exhibition of the product, in whole or in part, to another person or persons. A |
9 | person that purchases products "transferred electronically" in a commercial manner or associated |
10 | with the code for "specified digital products" for the purpose of giving away such products or |
11 | code shall not be considered to have engaged in the distribution or redistribution of such products |
12 | or code and shall be treated as an end user. |
13 | (v) For the purposes of "specified digital products," "permanent" means perpetual or for |
14 | an indefinite or unspecified length of time. |
15 | (y) "State" means any state of the United States and the District of Columbia. |
16 | (z) "Telecommunications" tax base/exemption terms. |
17 | (i) Telecommunication terms shall be defined as follows: |
18 | (A) "Ancillary services" means services that are associated with or incidental to the |
19 | provision of "telecommunications services," including, but not limited to, "detailed |
20 | telecommunications billing," "directory assistance," "vertical service," and "voice mail services." |
21 | (B) "Conference bridging service" means an "ancillary service" that links two (2) or more |
22 | participants of an audio or video conference call and may include the provision of a telephone |
23 | number. "Conference bridging service" does not include the "telecommunications services" used |
24 | to reach the conference bridge. |
25 | (C) "Detailed telecommunications billing service" means an "ancillary service" of |
26 | separately stating information pertaining to individual calls on a customer's billing statement. |
27 | (D) "Directory assistance" means an "ancillary service" of providing telephone number |
28 | information, and/or address information. |
29 | (E) "Vertical service" means an "ancillary service" that is offered in connection with one |
30 | or more "telecommunications services," which offers advanced calling features that allow |
31 | customers to identify callers and to manage multiple calls and call connections, including |
32 | "conference bridging services." |
33 | (F) "Voice mail service" means an "ancillary service" that enables the customer to store, |
34 | send, or receive recorded messages. "Voice mail service" does not include any "vertical services" |
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1 | that the customer may be required to have in order to utilize the "voice mail service." |
2 | (G) "Telecommunications service" means the electronic transmission, conveyance, or |
3 | routing of voice, data, audio, video, or any other information or signals to a point, or between or |
4 | among points. The term "telecommunications service" includes such transmission, conveyance, |
5 | or routing in which computer processing applications are used to act on the form, code, or |
6 | protocol of the content for purposes of transmission, conveyance, or routing without regard to |
7 | whether such service is referred to as voice over internet protocol services or is classified by the |
8 | Federal Communications Commission as enhanced or value added. "Telecommunications |
9 | service" does not include: |
10 | (1) Data processing and information services that allow data to be generated, acquired, |
11 | stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where |
12 | such purchaser's primary purpose for the underlying transaction is the processed data or |
13 | information; |
14 | (2) Installation or maintenance of wiring or equipment on a customer's premises; |
15 | (3) Tangible personal property; |
16 | (4) Advertising, including, but not limited to, directory advertising; |
17 | (5) Billing and collection services provided to third parties; |
18 | (6) Internet access service; |
19 | (7) Radio and television audio and video programming services, regardless of the |
20 | medium, including the furnishing of transmission, conveyance, and routing of such services by |
21 | the programming service provider. Radio and television audio and video programming services |
22 | shall include, but not be limited to, cable service as defined in 47 U.S.C. § 522(6) and audio and |
23 | video programming services delivered by commercial mobile radio service providers as defined |
24 | in 47 C.F.R. § 20.3; |
25 | (8) "Ancillary services"; or |
26 | (9) Digital products "delivered electronically," including, but not limited to: software, |
27 | music, video, reading materials, or ring tones. |
28 | (H) "800 service" means a "telecommunications service" that allows a caller to dial a toll- |
29 | free number without incurring a charge for the call. The service is typically marketed under the |
30 | name "800," "855," "866," "877," and "888" toll-free calling, and any subsequent numbers |
31 | designated by the Federal Communications Commission. |
32 | (I) "900 service" means an inbound toll "telecommunications service" purchased by a |
33 | subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded |
34 | announcement or live service. "900 service" does not include the charge for: collection services |
| LC004445 - Page 12 of 15 |
1 | provided by the seller of the "telecommunications services" to the subscriber, or service or |
2 | product sold by the subscriber to the subscriber's customer. The service is typically marketed |
3 | under the name "900 service," and any subsequent numbers designated by the Federal |
4 | Communications Commission. |
5 | (J) "Fixed wireless service" means a "telecommunications service" that provides radio |
6 | communication between fixed points. |
7 | (K) "Mobile wireless service" means a "telecommunications service" that is transmitted, |
8 | conveyed, or routed regardless of the technology used, whereby the origination and/or |
9 | termination points of the transmission, conveyance, or routing are not fixed, including, by way of |
10 | example only, "telecommunications services" that are provided by a commercial mobile radio |
11 | service provider. |
12 | (L) "Paging service" means a "telecommunications service" that provides transmission of |
13 | coded radio signals for the purpose of activating specific pagers; such transmissions may include |
14 | messages and/or sounds. |
15 | (M) "Prepaid calling service" means the right to access exclusively "telecommunications |
16 | services," which must be paid for in advance and that enables the origination of calls using an |
17 | access number or authorization code, whether manually or electronically dialed, and that is sold |
18 | in predetermined units or dollars of which the number declines with use in a known amount. |
19 | (N) "Prepaid wireless calling service" means a "telecommunications service" that |
20 | provides the right to utilize "mobile wireless service," as well as other non-telecommunications |
21 | services, including the download of digital products "delivered electronically," content and |
22 | "ancillary services" which must be paid for in advance that is sold in predetermined units of |
23 | dollars of which the number declines with use in a known amount. |
24 | (O) "Private communications service" means a telecommunications service that entitles |
25 | the customer to exclusive or priority use of a communications channel or group of channels |
26 | between or among termination points, regardless of the manner in which such channel or |
27 | channels are connected, and includes switching capacity, extension lines, stations, and any other |
28 | associated services that are provided in connection with the use of such channel or channels. |
29 | (P) "Value-added non-voice data service" means a service that otherwise meets the |
30 | definition of "telecommunications services" in which computer processing applications are used |
31 | to act on the form, content, code, or protocol of the information or data primarily for a purpose |
32 | other than transmission, conveyance, or routing. |
33 | (ii) "Modifiers of Sales Tax Base/Exemption Terms" -- the following terms can be used |
34 | to further delineate the type of "telecommunications service" to be taxed or exempted. The terms |
| LC004445 - Page 13 of 15 |
1 | would be used with the broader terms and subcategories delineated above. |
2 | (A) "Coin-operated telephone service" means a "telecommunications service" paid for by |
3 | inserting money into a telephone accepting direct deposits of money to operate. |
4 | (B) "International" means a "telecommunications service" that originates or terminates in |
5 | the United States and terminates or originates outside the United States, respectively. United |
6 | States includes the District of Columbia or a U.S. territory or possession. |
7 | (C) "Interstate" means a "telecommunications service" that originates in one United |
8 | States state, or a United States territory or possession, and terminates in a different United States |
9 | state or a United States territory or possession. |
10 | (D) "Intrastate" means a "telecommunications service" that originates in one United |
11 | States state or a United States territory or possession, and terminates in the same United States |
12 | state or a United States territory or possession. |
13 | (E) "Pay telephone service" means a "telecommunications service" provided through any |
14 | pay telephone. |
15 | (F) "Residential telecommunications service" means a "telecommunications service" or |
16 | "ancillary services" provided to an individual for personal use at a residential address, including |
17 | an individual dwelling unit such as an apartment. In the case of institutions where individuals |
18 | reside, such as schools or nursing homes, "telecommunications service" is considered residential |
19 | if it is provided to and paid for by an individual resident rather than the institution. |
20 | The terms "ancillary services" and "telecommunications service" are defined as a broad |
21 | range of services. The terms "ancillary services" and "telecommunications service" are broader |
22 | than the sum of the subcategories. Definitions of subcategories of "ancillary services" and |
23 | "telecommunications service" can be used by a member state alone or in combination with other |
24 | subcategories to define a narrower tax base than the definitions of "ancillary services" and |
25 | "telecommunications service" would imply. The subcategories can also be used by a member |
26 | state to provide exemptions for certain subcategories of the more broadly defined terms. |
27 | A member state that specifically imposes tax on, or exempts from tax, local telephone or |
28 | local telecommunications service may define "local service" in any manner in accordance with § |
29 | 44-18.1-28, except as limited by other sections of this Agreement. |
30 | (aa) "Tobacco" means cigarettes, cigars, chewing, or pipe tobacco, or any other item that |
31 | contains tobacco. |
32 | SECTION 2. This act shall take effect upon passage. |
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LC004445 | |
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| LC004445 - Page 14 of 15 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND | |
COMPUTATION | |
*** | |
1 | This act would expand the definition of sales to include any license, lease, or rental of |
2 | prewritten or vendor-hosted computer software and specified digital products. This act would also |
3 | define "end-user" for specified digital products. |
4 | This act would take effect upon passage. |
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LC004445 | |
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| LC004445 - Page 15 of 15 |