Chapter 239
2004 -- H 7346
Enacted 07/01/04
A N A C T
RELATING
TO TAXATION - SALES AND USE TAXES - LIABILITY AND
COMPUTATION
Introduced
By: Representatives Shanley, Enos, Scott, and Carter
Date
Introduced: January 27, 2004
It
is enacted by the General Assembly as follows:
SECTION
1. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales
and
Use
Taxes - Liability and Computation" is hereby amended to read as follows:
44-18-30.
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
which 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) Nonreturnable containers, including boxes, paper bags, and wrapping
materials
which
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.
(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
"nonreturnable
containers."
(5) Charitable, educational, and religious organizations. - (i) From the sale
to as in
defined
in this section, and from the storage, use, and other consumption in this state
or any other
state
of the United States of America of tangible personal property by hospitals not operated
for a
profit,
"educational institutions" as defined in subdivision (18) not
operated for a profit, churches,
orphanages,
and other institutions or organizations operated exclusively for religious or
charitable
purposes,
interest free loan associations not operated for profit, nonprofit organized
sporting
leagues
and associations and bands for boys and girls under the age of nineteen (19)
years, the
following
vocational student organizations that are state chapters of national vocational
students
organizations:
distributive education clubs of America, (DECA); future business leaders of
America/phi
beta lambda (FBLA/PBL); future farmers of America (FFA); future homemakers of
America/home
economics related occupations (FHA/HERD); and vocational industrial clubs of
America
(VICA), organized nonprofit golden age and senior citizens clubs for men and
women,
and
parent teacher associations.
(ii) In the case of contracts entered into with the federal government, its
agencies or
instrumentalities,
this state or any other state of the United States of America, its agencies,
any
city,
town, district, or other political subdivision of the states, hospitals not
operated for profit,
educational
institutions not operated for profit, churches, orphanages, and other
institutions or
organizations
operated exclusively for religious or charitable purposes, the contractor may
purchase
such materials and supplies (materials and/or supplies are defined as those
which are
essential
to the project) that are to be utilized in the construction of the projects
being performed
under
the contracts without payment of the tax.
(iii) The contractor shall not charge any sales or use tax to any exempt
agency,
institution,
or organization but shall in that instance provide his or her suppliers with
certificates
in
the form as determined by the division of taxation showing the reason for
exemption; and the
contractor's
records must substantiate the claim for exemption by showing the disposition of
all
property
so purchased. If any property is then used for a nonexempt purpose, the
contractor must
pay
the tax on the property used.
(6) Gasoline. - From the sale and from the storage, use, or other consumption
in this state
of:
(i) gasoline and other products taxed under chapter 36 of title 31, and (ii)
fuels used for the
propulsion
of airplanes.
(7) Purchase for manufacturing purposes. - (i) From the sale and from the
storage, use, or
other
consumption in this state of computer software, tangible personal property,
electricity,
natural
gas, artificial gas, steam, refrigeration, and water, when the property or
service is
purchased
for the purpose of being manufactured into a finished product for resale, and
becomes
an
ingredient, component, or integral part of the manufactured, compounded,
processed,
assembled,
or prepared product, or if the property or service is consumed in the process
of
manufacturing
for resale computer software, tangible personal property, electricity, natural
gas,
artificial
gas, steam, refrigeration, or water.
(ii) "Consumed" means destroyed, used up, or worn out to the degree
or extent that the
property
cannot be repaired, reconditioned, or rendered fit for further manufacturing
use.
(iii) "Consumed" includes mere obsolescence.
(iv) "Manufacturing" means and includes manufacturing, compounding,
processing,
assembling,
preparing, or producing.
(v) "Process of manufacturing" means and includes all production
operations performed
in
the producing or processing room, shop, or plant, insofar as the operations are
a part of and
connected
with the manufacturing for resale of tangible personal property, electricity,
natural gas,
artificial
gas, steam, refrigeration, or water and all production operations performed
insofar as the
operations
are a part of and connected with the manufacturing for resale of computer
software.
(vi) "Process of manufacturing" does not mean or include administration
operations such
as
general office operations, accounting, collection, sales promotion, nor does it
mean or include
distribution
operations which occur subsequent to production operations, such as handling,
storing,
selling, and transporting the manufactured products, even though the
administration and
distribution
operations are performed by or in connection with a manufacturing business.
(8) State and political subdivisions. - From the sale to, and from the storage,
use, or other
consumption
by, this state, any city, town, district, or other political subdivision of
this state.
Every
redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be
a
subdivision
of the municipality wherein it is located.
(9) Food products. - (i) From the sale and the storage, use, or other
consumption in this
state,
subsequent to March 31, 1948, of food products for human consumption.
(ii) "Food products" includes, except as otherwise provided in this
subdivision, cereals
and cereal
products; milk and milk products, other than candy and confectionery, but
including
ice
cream; oleomargarine; meat and meat products; fish and fish products; eggs and
egg products;
vegetables
and vegetable products; fruit and fruit products, including pure fruit juices;
spices,
condiments,
and salt; sugar and sugar products other than candy and confectionery; coffee
and
coffee
substitutes; tea, cocoa, and cocoa products, other than candy and
confectionery; and
noncarbonated
and noneffervescent bottled waters sold for human consumption.
(iii) "Food products" does not include spirituous, malt, or vinous
liquors; soft drinks,
sodas,
or beverages that are ordinarily dispensed at bars or soda fountains or in
connection
therewith;
medicines, tonics, vitamins, and preparations in liquid, powdered, granular,
tablet,
capsule,
lozenge, or pill form, sold as dietary supplements or adjuncts, except when
sold on the
prescription
of a physician; or mineral and carbonated bottled waters and ice.
(iv) "Food products" also does not include meals served on or off the
premises of the
retailer;
or drinks or food furnished, prepared, or served for consumption at tables,
chairs, or
counters,
or from trays, glasses, dishes, or other tableware provided by the retailer.
(v) The sale of meals and other food products ordinarily sold for immediate
consumption
on or
off the premises of the retailer is a taxable sale even though the products are
sold on a "take
out"
or "to go" order, and are actually packaged or wrapped and taken from
the premises.
(10) Medicines and drugs. - From the sale and from the storage, use, or other
consumption
in this state, subsequent to March 31, 1948, of "medicines" and
"drugs" as defined
in
section 5-19-1 [repealed] sold on prescriptions and proprietary medicines,
popularly called
patent
medicines, including, but not limited to, disposable or reusable devices, such
as syringe
infusers,
ambulatory drug delivery pumps and supplies used with these items which are
sold on
prescription
to individuals to be used by them to dispense or administer prescription drugs,
and
related
ancillary dressings and supplies used to dispense or administer prescription
drugs.
(11) Prosthetic and orthopedic appliances. - From the sale and from the
storage, use, or
other
consumption in this state, subsequent to March 31, 1948, of crutches,
artificial limbs,
dentures,
spectacles and eyeglasses, artificial eyes, artificial hearing devices, and
other prostheses
or
orthopedic appliances, designed and purchased to be worn on the person of the
owner or user.
(12) Coffins, caskets, and burial garments. - From the sale and from the
storage, use, or
other
consumption in this state of coffins or caskets, and shrouds or other burial garments
which
are
ordinarily sold by a funeral director as part of the business of funeral
directing.
(13) Motor vehicles sold to nonresidents. - (i) From the sale, subsequent to
June 30,
1958,
of a motor vehicle to a bona fide nonresident of this state who does not
register the motor
vehicle
in this state, whether the sale or delivery of the motor vehicle is made in
this state or at
the
place of residence of the nonresident; provided, that a motor vehicle sold to a
bona fide
nonresident
whose state of residence does not allow a like exemption to its nonresidents is
not
exempt
from the tax imposed under section 44-18-20; provided, further, that in that
event the
bona
fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the
rate that would
be
imposed in his or her state of residence not to exceed the rate that would have
been imposed
under
section 44-18-20. Notwithstanding any other provisions of law, a licensed motor
vehicle
dealer
shall add and collect the tax required under this subdivision and remit the tax
to the tax
administrator
under the provisions of chapters 18 and 19 of this title. Provided, further,
that when
a
Rhode Island licensed motor vehicle dealer is required to add and collect the
sales and use tax
on
the sale of a motor vehicle to a bona fide nonresident as provided in this
section, the dealer in
computing
the tax takes into consideration the law of the state of the nonresident as it
relates to
the
trade-in of motor vehicles.
(ii) The tax administrator, in addition to the provisions of sections 44-19-27
and 44-19-
28,
may require any licensed motor vehicle dealer to keep records of sales to bona
fide
nonresidents
as the tax administrator deems reasonably necessary to substantiate the
exemption
provided
in this subdivision, including the affidavit of a licensed motor vehicle dealer
that the
purchaser
of the motor vehicle was the holder of, and had in his or her possession a
valid out of
state
motor vehicle registration or a valid out of state driver's license.
(iii) Any nonresident who registers a motor vehicle in this state within ninety
(90) days
of
the date of its sale to him or her is deemed to have purchased the motor
vehicle for use,
storage,
or other consumption in this state, and is subject to, and liable for the use
tax imposed
under
the provisions of section 44-18-20.
(14) Sales in public buildings by blind people. - From the sale and from the
storage, use,
or
other consumption in all public buildings in this state of all products or
wares by any person
licensed
under section 40-9-11.1.
(15) Air and water pollution control facilities. - From the sale, storage, use,
or other
consumption
in this state of tangible personal property or supplies acquired for incorporation
into
or
used and consumed in the operation of a facility, the primary purpose of which
is to aid in the
control
of the pollution or contamination of the waters or air of the state, as defined
in chapter 12
of
title 46 and chapter 25 of title 23, respectively, and which has been certified
as approved for
that
purpose by the director of environmental management. The director of
environmental
management
may certify to a portion of the tangible personal property or supplies acquired
for
incorporation
into those facilities or used and consumed in the operation of those facilities
to the
extent
that that portion has as its primary purpose the control of the pollution or
contamination of
the
waters or air of this state. As used in this subdivision, "facility"
means any land, facility,
device,
building, machinery, or equipment.
(16) Camps. - From the rental charged for living quarters, or sleeping or
housekeeping
accommodations
at camps or retreat houses operated by religious, charitable, educational, or
other
organizations and associations mentioned in subdivision (5), or by privately
owned and
operated
summer camps for children.
(17) Certain institutions. - From the rental charged for living or sleeping
quarters in an
institution
licensed by the state for the hospitalization, custodial, or nursing care of
human beings.
(18) Educational institutions. - From the rental charged by any educational
institution for
living
quarters, or sleeping or housekeeping accommodations or other rooms or
accommodations
to
any student or teacher necessitated by attendance at an educational
institution. "Educational
institution"
as used in this section means an institution of learning not operated for
profit which is
empowered
to confer diplomas, educational, literary, or academic degrees, which has a
regular
faculty,
curriculum, and organized body of pupils or students in attendance throughout
the usual
school
year, which keeps and furnishes to students and others records required and accepted
for
entrance
to schools of secondary, collegiate, or graduate rank, no part of the net
earnings of which
inures
to the benefit of any individual.
(19) Motor vehicle and adaptive equipment for persons with disabilities. - (i)
From the
sale
of: (A) special adaptations, (B) the component parts of the special
adaptations, or (C) a
specially
adapted motor vehicle; provided, that the owner furnishes to the tax
administrator an
affidavit
of a licensed physician to the effect that the specially adapted motor vehicle
is necessary
to
transport a family member with a disability or where the vehicle has been
specially adapted to
meet
the specific needs of the person with a disability. This exemption applies to
not more than
one
motor vehicle owned and registered for personal, noncommercial use.
(ii) For the purpose of this subsection the term "special
adaptations" includes, but is not
limited
to: wheelchair lifts; wheelchair carriers; wheelchair ramps; wheelchair
securements; hand
controls;
steering devices; extensions, relocations, and crossovers of operator controls;
power
assisted
controls; raised tops or dropped floors; raised entry doors; or alternative
signaling
devices
to auditory signals.
(iii) For the purpose of this subdivision the exemption for a "specially
adapted motor
vehicle"
means a use tax credit not to exceed the amount of use tax that would otherwise
be due
on
the motor vehicle, exclusive of any adaptations. The use tax credit is equal to
the cost of the
special
adaptations, including installation.
(20) Heating fuels. - From the sale and from the storage, use, or other
consumption in
this
state of every type of fuel used in the heating of homes and residential
premises.
(21) Electricity and gas. - From the sale and from the storage, use, or other
consumption
in
this state of electricity and gas furnished for domestic use by occupants of
residential premises.
(22) Manufacturing machinery and equipment. - (i) From the sale and from the
storage,
use,
or other consumption in this state of tools, dies, and molds, and machinery and
equipment
(including
replacement parts), and related items to the extent used in an industrial plant
in
connection
with the actual manufacture, conversion, or processing of tangible personal
property,
or to
the extent used in connection with the actual manufacture, conversion or
processing of
computer
software as that term is utilized in industry numbers 7371, 7372, and 7373 in
the
standard
industrial classification manual prepared by the technical committee on
industrial
classification,
office of statistical standards, executive office of the president, United
States
bureau
of the budget, as revised from time to time, to be sold, or that machinery and
equipment
used
in the furnishing of power to an industrial manufacturing plant. For the
purposes of this
subdivision,
the term "industrial plant" means a factory at a fixed location
primarily engaged in
the manufacture,
conversion, or processing of tangible personal property to be sold in the
regular
course
of business;
(ii) Machinery and equipment and related items are not deemed to be used in
connection
with
the actual manufacture, conversion, or processing of tangible personal
property, or in
connection
with the actual manufacture, conversion or processing of computer software as
that
term
is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial
classification
manual
prepared by the technical committee on industrial classification, office of
statistical
standards,
executive office of the president, United States bureau of the budget, as
revised from
time
to time, to be sold to the extent the property is used in administration or
distribution
operations;
(iii) Machinery and equipment and related items used in connection with the
actual
manufacture,
conversion, or processing of any computer software or any tangible personal
property
which is not to be sold and which would be exempt under subdivision (7) or this
subdivision
if purchased from a vendor or machinery and equipment and related items used
during
any manufacturing, converting or processing function is exempt under this
subdivision
even
if that operation, function, or purpose is not an integral or essential part of
a continuous
production
flow or manufacturing process;
(iv) Where a portion of a group of portable or mobile machinery is used in
connection
with
the actual manufacture, conversion, or processing of computer software or
tangible personal
property
to be sold, as previously defined, that portion, if otherwise qualifying, is
exempt under
this
subdivision even though the machinery in that group is used interchangeably and
not
otherwise
identifiable as to use.
(23) Trade in value of motor vehicles. - From the sale and from the storage,
use, or other
consumption
in this state of so much of the purchase price paid for a new or used
automobile as is
allocated
for a trade in allowance on the automobile of the buyer given in trade to the
seller or of
the
proceeds applicable only to the motor vehicle as are received from an insurance
claim as a
result
of a stolen or damaged motor vehicle, or of the proceeds applicable only to the
automobile
as
are received from the manufacturer of automobiles for the repurchase of the
automobile
whether
the repurchase was voluntary or not towards the purchase of a new or used
automobile
by the
buyer; provided, that the proceeds from an insurance claim or repurchase is in
lieu of the
benefit
prescribed in section 44-18-21 for the total loss or destruction of the
automobile; and
provided,
further, that the tax has not been reimbursed as part of the insurance claim or
repurchase.
For the purpose of this subdivision, the word "automobile" means a
private passenger
automobile
not used for hire and does not refer to any other type of motor vehicle.
(24) Precious metal bullion. - (i) From the sale and from the storage, use, or
other
consumption
in this state of precious metal bullion, substantially equivalent to a
transaction in
securities
or commodities.
(ii) For purposes of this subdivision, "precious metal bullion" means
any elementary
precious
metal which has been put through a process of smelting or refining, including,
but not
limited
to, gold, silver, platinum, rhodium, and chromium, and which is in a state or
condition
that
its value depends upon its content and not upon its form.
(iii) The term does not include fabricated precious metal which has been
processed or
manufactured
for some one or more specific and customary industrial, professional, or
artistic
uses.
(25) [Deleted by P.L. 2000, ch. 109, section 48.]
(26) Commercial vessels. - From sales made to a commercial ship, barge, or
other vessel
of
fifty (50) tons burden or over, primarily engaged in interstate or foreign
commerce, and from
the
repair, alteration, or conversion of the vessels, and from the sale of property
purchased for the
use
of the vessels including provisions, supplies, and material for the maintenance
and/or repair
of
the vessels.
(27) Commercial fishing vessels. - From the sale and from the storage, use, or
other
consumption
in this state of vessels and other water craft which are in excess of five (5)
net tons
and
which are used exclusively for "commercial fishing", as defined in
this subdivision, and from
the
repair, alteration, or conversion of those vessels and other watercraft, and
from the sale of
property
purchased for the use of those vessels and other watercraft including
provisions,
supplies,
and material for the maintenance and/or repair of the vessels and other
watercraft and
the
boats' nets, cables, tackle, and other fishing equipment appurtenant to or used
in connection
with
the commercial fishing of the vessels and other watercraft. "Commercial
fishing" means the
taking
or the attempting to take any fish, shellfish, crustacea, or bait species with the
intent of
disposing
of them for profit or by sale, barter, trade, or in commercial channels. The
term does
not
include subsistence fishing, i.e., the taking for personal use and not for sale
or barter; or sport
fishing;
but shall include vessels and other watercraft with a Rhode Island party and
charter boat
license
issued by the department of environmental management pursuant to section
20-2-27.1
which
meet the following criteria: (i) the operator must have a current U.S.C.G.
license to carry
passengers
for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade;
(iii)
U.S.C.G.
vessel documentation as to proof of Rhode Island home port status or a Rhode
Island
boat
registration to prove Rhode Island home port status; (iv) the vessel must be
used as a
commercial
passenger carrying fishing vessel to carry passengers for fishing. The vessel
must be
able
to demonstrate that at least fifty percent (50%) of its annual gross income
derives from
charters
or provides documentation of a minimum of one hundred (100) charter trips
annually; (v)
the
vessel must have a valid Rhode Island party and charter boat license. The tax
administrator
shall
implement the provisions of this subdivision by promulgating rules and
regulations relating
thereto.
(28) Clothing and footwear. - From the sales of articles of clothing, including
footwear,
intended
to be worn or carried on or about the human body. For the purposes of this
section,
"clothing
or footwear" does not include special clothing or footwear primarily
designed for
athletic
activity or protective use and which is not normally worn except when so used;
and sales
of
wearing materials or any cloth made of natural or synthetic fibers and used for
clothing
purposes.
(29) Water for residential use. - From the sale and from the storage, use, or
other
consumption
in this state of water furnished for domestic use by occupants of residential
premises.
(30) Bibles. - [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999);
see
Notes
to Decisions.]From the sale and from the storage, use, or other consumption in
the state of
any
canonized scriptures of any tax exempt non profit religious organization
including, but not
limited
to, the Old Testament and the New Testament versions.
(31) Boats. - (i) From the sale of a boat or vessel to a bona fide nonresident
of this state
who
does not register the boat or vessel in this state, or document the boat or
vessel with the
United
States government at a home port within the state, whether the sale or delivery
of the boat
or
vessel is made in this state or elsewhere; provided, that the nonresident
transports the boat
within
thirty (30) days after delivery by the seller, outside the state for use
thereafter solely
outside
the state.
(ii) The tax administrator, in addition to the provisions of sections 44-19-17
and 44-19-
28,
may require the seller of the boat or vessel to keep records of the sales to
bona fide
nonresidents
as the tax administrator deems reasonably necessary to substantiate the
exemption
provided
in this subdivision, including the affidavit of the seller that the buyer
represented
himself
or herself to be a bona fide nonresident of this state and of the buyer that he
or she is a
nonresident
of this state.
(32) Youth activities equipment. - From the sale, storage, use, or other
consumption in
this
state of items for not more than twenty dollars ($20.00) each by nonprofit
Rhode Island
eleemosynary
organizations, for the purposes of youth activities which the organization is
formed
to
sponsor and support; and by accredited elementary and secondary schools for the
purposes of
the
schools or of organized activities of the enrolled students.
(33) Farm equipment. - From the sale and from the storage or use of machinery
and
equipment
used directly for commercial farming and agricultural production; including,
but not
limited
to, tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors,
balers,
bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation
equipment,
greenhouses
and greenhouse coverings, graders and packaging machines, tools and supplies
and
other
farming equipment, including replacement parts, appurtenant to or used in
connection with
commercial
farming and tools and supplies used in the repair and maintenance of farming
equipment.
"Commercial farming" means the keeping or boarding of five (5) or
more horses or
the
production within this state of agricultural products, including, but not
limited to, field or
orchard
crops, livestock, dairy, and poultry, or their products, where the keeping,
boarding, or
production
provides at least two thousand five hundred dollars ($2,500) in annual gross
sales to
the
operator, whether an individual, a group, a partnership, or a corporation for
exemptions issued
prior
to July 1, 2002; for exemptions issued or renewed after July 1, 2002, there
shall be two (2)
levels.
Level I shall be based on proof of annual gross sales from commercial farming
of at least
twenty-five
hundred dollars ($2,500) and shall be valid for purchases subject to the
exemption
provided
in this subdivision except for motor vehicles with an excise tax value of five
thousand
dollars
($5,000) or less greater; Level II shall be based on proof of
annual gross sales from
commercial
farming of at least ten thousand dollars ($10,000) or greater and shall be
valid for
purchases
subject to the exemption provided in this subdivision including motor vehicles
with an
excise
tax value of five thousand dollars ($5,000) or greater. For the initial
issuance of the
exemptions,
proof of the requisite amount of annual gross sales from commercial farming
shall be
required
for the prior year; for any renewal of an exemption granted in accordance with
this
subdivision
at either Level I or Level II, proof of gross annual sales from commercial
farming at
the
requisite amount shall be required for each of the prior two (2) years.
Certificates of
exemption
issued or renewed after July 1, 2002 shall clearly indicate the level of the
exemption
and
be valid for four (4) years after the date of issue. This exemption applies
even if the same
equipment
is used for ancillary uses, or is temporarily used for a non-farming or a non-
agricultural
purpose, but shall not apply to motor vehicles acquired after July 1, 2002,
unless the
vehicle
is a farm vehicle as defined pursuant to section 31-1-8 and is eligible for
registration
displaying
farm plates as provided for in section 31-3-31.
(34) Compressed air. - From the sale and from the storage, use, or other
consumption in
the
state of compressed air.
(35) Flags. - From the sale and from the storage, consumption, or other use in
this state
of
United States, Rhode Island or POW-MIA flags.
(36) Motor vehicle and adaptive equipment to certain veterans. - From the sale
of a
motor
vehicle and adaptive equipment to and for the use of a veteran with a service
connected
loss
of or the loss of use of a leg, foot, hand, or arm, or any veteran who is a
double amputee,
whether
service connected or not. The motor vehicle must be purchased by and especially
equipped
for use by the qualifying veteran. Certificate of exemption or refunds of taxes
paid is
granted
under rules or regulations that the tax administrator may prescribe.
(37) Textbooks. - From the sale and from the storage, use, or other consumption
in this
state
of textbooks by an "educational institution" as defined in
subdivision (18) and as well as any
educational
institution within the purview of section 16-63-9(4) and used textbooks by any
purveyor.
(38) Tangible personal property and supplies used in on-site hazardous waste
recycling,
reuse,
or treatment. - From the sale, storage, use, or other consumption in this state
of tangible
personal
property or supplies used or consumed in the operation of equipment, the
exclusive
function
of which is the recycling, reuse, or recovery of materials (other than precious
metals, as
defined
in subdivision (24)(ii)) from the treatment of "hazardous wastes", as
defined in section
23-19.1-4,
where the "hazardous wastes" are generated in Rhode Island solely by
the same
taxpayer
and where the personal property is located at, in, or adjacent to a generating
facility of
the
taxpayer in Rhode Island. The taxpayer shall procure an order from the director
of the
department
of environmental management certifying that the equipment and/or supplies as
used,
or consumed,
qualify for the exemption under this subdivision. If any information relating
to
secret
processes or methods of manufacture, production, or treatment is disclosed to
the
department
of environmental management only to procure an order, and is a "trade
secret" as
defined
in section 28-21-10(b), it is not open to public inspection or publicly
disclosed unless
disclosure
is required under chapter 21 of title 28 or chapter 24.4 of title 23.
(39) Promotional and product literature of boat manufacturers. - From the sale
and from
the
storage, use, or other consumption of promotional and product literature of
boat
manufacturers
shipped to points outside of Rhode Island which either: (i) accompany the
product
which
is sold, (ii) are shipped in bulk to out of state dealers for use in the sale
of the product, or
(iii)
are mailed to customers at no charge.
(40) Food items paid for by food stamps. - From the sale and from the storage,
use, or
other
consumption in this state of eligible food items payment for which is properly
made to the
retailer
in the form of U.S. government food stamps issued in accordance with the Food
Stamp
Act
of 1977, 7 U.S.C. section 2011 et seq., as amended.
(41) Transportation charges. - From the sale or hiring of motor carriers as
defined in
section
39-12-2(l) to haul goods, when the contract or hiring cost is charged by a
motor freight
tariff
filed with the Rhode Island public utilities commission on the number of miles
driven or by
the
number of hours spent on the job.
(42) Trade in value of boats. - From the sale and from the storage, use, or
other
consumption
in this state of so much of the purchase price paid for a new or used boat as
is
allocated
for a trade in allowance on the boat of the buyer given in trade to the seller
or of the
proceeds
applicable only to the boat as are received from an insurance claim as a result
of a stolen
or
damaged boat, towards the purchase of a new or used boat by the buyer.
(43) Equipment used for research and development. - From the sale and from the
storage,
use, or other consumption of equipment to the extent used for research and
development
purposes
by a qualifying firm. For the purposes of this subdivision, "qualifying
firm" means a
business
for which the use of research and development equipment is an integral part of
its
operation,
and "equipment" means scientific equipment, computers, software, and
related items.
(44) Coins. - From the sale and from the other consumption in this state of
coins having
numismatic
or investment value.
(45) Farm structure construction materials. - Lumber, hardware and other
materials used
in
the new construction of farm structures, including production facilities such
as, but not limited
to,
farrowing sheds, free stall and stanchion barns, milking parlors, silos,
poultry barns, laying
houses,
fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses,
packing
rooms,
machinery storage, seasonal farm worker housing, certified farm markets, bunker
and
trench
silos, feed storage sheds, and any other structures used in connection with
commercial
farming.
(46) Telecommunications carrier access service. - Carrier access service or
telecommunications
service when purchased by a telecommunications company from another
telecommunications
company to facilitate the provision of telecommunications service.
(47) Boats or vessels brought into the state exclusively for winter storage, maintenance,
repair
or sale. - Notwithstanding the provisions of sections 44-18-10, 44-18-11,
44-18-20, the tax
imposed
by section 44-18-20 is not applicable for the period commencing on the first
day of
October
in any year to and including the 30th day of April next succeeding with respect
to the use
of
any boat or vessel within this state exclusively for purposes of: (i) delivery
of the vessel to a
facility
in this state for storage, including dry storage and storage in water by means
of apparatus
preventing
ice damage to the hull, maintenance, or repair; (ii) the actual process of
storage,
maintenance,
or repair of the boat or vessel; or (iii) storage for the purpose of selling
the boat or
vessel.
(48) Jewelry display product. - From the sale and from the storage, use, or
other
consumption
in this state of tangible personal property used to display any jewelry
product;
provided,
that title to the jewelry display product is transferred by the jewelry
manufacturer or
seller
and that the jewelry display product is shipped out of state for use solely
outside the state
and
is not returned to the jewelry manufacturer or seller.
(49) Boats or vessels generally. - Notwithstanding the provisions of this
chapter, the tax
imposed
by sections 44-18-20 and 44-18-18 shall not apply with respect to the sale and
to the
storage,
use, or other consumption in this state of any new or used boat. Provided, that
the
exemption
provided for in this subdivision does not apply after October 1, 1993 unless
prior to
October
1, 1993 the federal ten percent (10%) surcharge on luxury boats is repealed.
(50) Banks and Regulated investment companies interstate toll-free calls. -
Notwithstanding
the provisions of this chapter, the tax imposed by this chapter does not apply
to
the
furnishing of interstate and international, toll-free terminating
telecommunication service that
is
used directly and exclusively by or for the benefit of an eligible company as
defined in this
subdivision;
provided, further, that an eligible company employs on average during the
calendar
year
no less than five hundred (500) full-time equivalent employees as that term is
defined in
section
42-64.5-2. For purposes of this section, an "eligible company" means
a "regulated
investment
company" as that term is defined in the Internal Revenue Code of 1986, 26
U.S.C.
section
1 et seq., as amended, or a corporation to the extent the service is provided,
directly or
indirectly,
to or on behalf of a regulated investment company, an employee benefit plan, a
retirement
plan or a pension plan or a state chartered bank.
(51) Mobile and manufactured homes generally. - From the sale and from the
storage,
use,
or other consumption in this state of mobile and/or manufactured homes as
defined and
subject
to taxation pursuant to the provisions of chapter 44 of title 31.
(52) [Deleted by P.L. 1997, ch. 168, section 6.]
(53) [Deleted by P.L. 1997, ch. 168, section 6.]
(54) Manufacturing business reconstruction materials. - (i) From the sale and
from the
storage,
use or other consumption in this state of lumber, hardware, and other building
materials
used
in the reconstruction of a manufacturing business facility which suffers a disaster,
as defined
in
this subdivision, in this state. "Disaster" means any occurrence,
natural or otherwise, which
results
in the destruction of sixty percent (60%) or more of an operating manufacturing
business
facility
within this state. Provided, that "disaster" does not include any
damage resulting from the
willful
act of the owner of the manufacturing business facility.
(ii) Manufacturing business facility includes, but is not limited to, the
structures housing
the
production and administrative facilities.
(iii) In the event a manufacturer has more than one manufacturing site in this
state, the
sixty
percent (60%) provision applies to the damages suffered at that one site.
(iv) To the extent that the cost of the reconstruction material are reimbursed
by
insurance,
this exemption does not apply.
(55) Tangible personal property and supplies used in the processing or
preparation of
floral
products and floral arrangements. - From the sale, storage, use, or other
consumption in this
state
of tangible personal property or supplies purchased by florists, garden
centers, or other like
producers
or vendors of flowers, plants, floral products, and natural and artificial
floral
arrangements
which are ultimately sold with flowers, plants, floral products, and natural
and
artificial
floral arrangements or are otherwise used in the decoration, fabrication,
creation,
processing,
or preparation of flowers, plants, floral products, or natural and artificial
floral
arrangements,
including descriptive labels, stickers, and cards affixed to the flower, plant,
floral
product
or arrangement, artificial flowers, spray materials, floral paint and tint,
plant shine, flower
food,
insecticide and fertilizers.
(56) Horse food products. - From the sale and from the storage, use, or other
consumption
in this state of horse food products purchased by a person engaged in the
business of
the
boarding of horses.
(57) Nonmotorized recreational vehicles sold to nonresidents. - (i) From the
sale,
subsequent
to June 30, 2003, of a nonmotorized recreational vehicle to a bona fide
nonresident of
this
state who does not register the nonmotorized recreational vehicle in this
state, whether the
sale
or delivery of the nonmotorized recreational vehicle is made in this state or
at the place of
residence
of the nonresident; provided, that a nonmotorized recreational vehicle sold to
a bona
fide
nonresident whose state of residence does not allow a like exemption to its
nonresidents is
not exempt
from the tax imposed under section 44-18-20; provided, further, that in that
event the
bona
fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the
rate that would
be
imposed in his or her state of residence not to exceed the rate that would have
been imposed
under
section 44-18-20. Notwithstanding any other provisions of law, a licensed
nonmotorized
recreational
vehicle dealer shall add and collect the tax required under this subdivision
and remit
the
tax to the tax administrator under the provisions of chapters 18 and 19 of this
title. Provided,
further,
that when a Rhode Island licensed nonmotorized recreational vehicle dealer is
required to
add
and collect the sales and use tax on the sale of a nonmotorized recreational
vehicle to a bona
fide
nonresident as provided in this section, the dealer in computing the tax takes
into
consideration
the law of the state of the nonresident as it relates to the trade-in of motor
vehicles.
(ii) The tax administrator, in addition to the provisions of sections 44-19-27
and 44-19-
28,
may require any licensed nonmotorized recreational vehicle dealer to keep
records of sales to
bona
fide nonresidents as the tax administrator deems reasonably necessary to
substantiate the
exemption
provided in this subdivision, including the affidavit of a licensed
nonmotorized
recreational
vehicle dealer that the purchaser of the nonmotorized recreational vehicle was
the
holder
of, and had in his or her possession a valid out-of-state nonmotorized
recreational vehicle
registration
or a valid out-of-state driver's license.
(iii) Any nonresident who registers a nonmotorized recreational vehicle in this
state
within
ninety (90) days of the date of its sale to him or her is deemed to have purchased
the
nonmotorized
recreational vehicle for use, storage, or other consumption in this state, and
is
subject
to, and liable for the use tax imposed under the provisions of section
44-18-20.
(iv) "Nonmotorized recreational vehicle" means any portable dwelling
designed and
constructed
to be used as a temporary dwelling for travel, camping, recreational, and
vacation use
which
is eligible to be registered for highway use, including, but not limited to,
"pick-up coaches"
or
"pick-up campers," "travel trailers," and "tent
trailers" as those terms are defined in chapter 1
of
title 31.
(58) Sprinkler and fire alarm systems in existing buildings. - From the sale in
this state of
sprinkler
and fire alarm systems, emergency lighting and alarm systems, and from the sale
of the
materials
necessary and attendant to the installation thereof, that are required in
buildings and
occupancies
therein existing in July 2003, in order to comply with any additional
requirements
for
such buildings arising directly from the enactment of the Comprehensive Fire
Safety Act of
2003,
and that are not required by any other provision of law or ordinance or
regulation adopted
pursuant
thereto. The exemption herein provided shall expire on December 31, 2008.
SECTION
2. This act shall take effect upon passage.
=======
LC01161
=======