Chapter 445

2004 -- S 2061 SUBSTITUTE A AS AMENDED

Enacted 07/07/04

A N A C T

RELATING TO TAXATION -- SALES TAX

Introduced By: Senators Paiva-Weed, and Gibbs

Date Introduced: January 13, 2004

It is enacted by the General Assembly as follows:

SECTION 1. Section 44-18-30.B 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.B. Exemption from sales tax for sales by writers, composers, artists --

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

(1) The downtown area of the city of Providence has been characterized by blighted

areas, and dilapidated and abandoned structures;

(2) As a result, the downtown area has been designated an economic development zone

in order to stop the deterioration and stimulate economic activity;

(3) The capitol center area of the city of Providence has become an attractive location,

especially with the construction of the Providence Place Mall;

(4) In order to promote, revitalize and redevelop the "Old Downtown" area of the city of

Providence it is necessary to provide tax exemptions to this area as it has been designated as an

economic development zone;

(5) In order to promote, revitalize, and redevelop the "Downtown or other industrial or

manufacturing buildings" located in the City of Pawtucket, it is necessary to provide tax

exemptions to this area as it has been designated as an economic development zone;

(6) The development of an active artistic community, including "artists in residence", in

this area would promote economic development, revitalization, tourism, employment

opportunities, and encourage business development by providing alternative commercial

enterprises while in Providence creating a link between the Old Downtown and the Capital Center

Area.

(7) There is a separate artistic community in the town of Westerly which is important to

preserve, promote, and revitalize, and which is distinct from that in the city of Providence.

(8) There is a separate artistic community in the city of Woonsocket which is important

to promote and revitalize and which is distinct from that in the cities of Providence and Pawtucket

and the town of Westerly.

(9) There is a separate artistic community in the city of Newport which is important to

promote and revitalize and which is distinct from that in the cities of Providence, Pawtucket and

Woonsocket and the towns of Westerly and Tiverton.

(b) (1) This section only applies to sales by writers, composers and artists residing in and

conducting a business within a section of the defined economic development zone in the cities of

Providence or Pawtucket, or the defined economic development zone in the town of Westerly or

the defined economic zone in the city of Woonsocket, or in those areas within the city of Newport

and the town of Tiverton which are zoned "general business" or "waterfront business". For the

purposes of this section, a "work" means an original and creative work, whether written,

composed or executed for "one-of-a-kind limited" production and which falls into one of the

following categories:

(i) A book or other writing;

(ii) A play or the performance of said play;

(iii) A musical composition or the performance of said composition;

(iv) A painting or other like picture;

(v) A sculpture;

(vi) Traditional and fine crafts;

(vii) The creation of a film or the acting within the film;

(viii) The creation of a dance or the performance of the dance.

(2) For the purposes of this section, a "work" includes any product generated as a result

of any of the above categories.

(3) For the purposes of this section, a "work" does not apply to any piece or performance

created or executed for industry oriented or related production.

(i) Who is a resident of and has a principal place of business situated in the section of the

economic development zone designated as the arts and entertainment district in the downtown

area of the city of Providence or in the city of Pawtucket, or the defined economic development

zone in the town of Westerly or the defined economic zone in the city of Woonsocket, or who is a

resident of and has a principal place of business situated in those areas within the city of Newport

and the town of Tiverton which are zoned "general business" or "waterfront business". For the

purposes of this section, the Providence arts and entertainment district in Providence is defined as

the area bounded by Pine Street to the southeast, Dorrance Street to the northeast, Sabin Street to

the northwest and Empire Street to the southwest. The named streets are included in the

Providence district; and in Pawtucket is defined as the area beginning at the point of intersection

of Dexter Street and the Central Falls line, then east along the Central Falls line to the Blackstone

River, then north along the city boundary on the Blackstone River to the Cumberland line, then

west along the Pawtucket city boundary line to I-95, then south along I-95 to Pine Street, then

north on Pine Street to AMTRAK Right of Way, then northwest along the AMTRAK Right of

Way to Dexter Street, then north on Dexter Street to the Central Falls line. The named streets are

included in the district. The Westerly arts and entertainment district is defined as assessor's plat

56, lots 1 through 24, lot 48, lots 50 through 62, and lots 71 through 82, and assessors plat 66, lots

22 through 26, and lots 29 through 36 the Woonsocket arts and entertainment district is defined as

the area beginning at a point of land on the southwest bank of the Blackstone River abutting the

bridge for the Providence & Worcester Railroad and proceeding northerly to a point at the

intersection of Worrall Street, Clinton Street and Harry S. Truman Drive, then proceeding

northwesterly along Worrall Street to its intersection with Social Street, then turning westerly on

Social Street proceeding to its intersection with Main Street, Blackstone Street and North Main

Street, then turning northwesterly and proceeding along Blackstone Street to its intersection with

River Street, then turning northerly and proceeding along River Street to its intersection with the

north/east bank of Blackstone River, then following the riverbank southerly to the bridge at

Bernon Street and turning easterly crossing the Blackstone River via Bernon Street and

proceeding to its intersection with Front Street, then turning northeasterly on Front Street and

proceeding to its intersection with Hamlet Avenue, and to include the former courthouse on the

southerly side of Front Street at its intersection with Hamlet Avenue, then turning easterly on

Hamlet Avenue and proceeding to its intersection with Manville Road, then turning southeasterly

on Manville Road and proceeding to its intersection with Davison Avenue, then turning

northeasterly on Davison Avenue and proceeding to a point on the south/west bank of the

Blackstone River, then turning northerly, following the southerly riverbank to the point of

beginning. The abovementioned streets are included in the district.

(ii) Who is determined by the tax administrator, after consideration of any evidence he or

she deems necessary or which is submitted to him or her by the individual, to have written,

composed, or executed, either solely or jointly, a work or works which would fall into one of the

categories listed in subsection (b)(1).

(2) This section also applies to sales by any other gallery located in the arts and

entertainment district described in subsection (c)(1)(i) as well as any other arts and entertainment

district designated by the general assembly, as well as to sales by any other gallery located in

those areas within the city of Newport and the town of Tiverton which are zoned "general

business" or "waterfront business".

(3) The tax administrator shall not make a determination unless:

(i) The individual(s) concerned duly make(s) an application to the tax administrator for

the sales tax exemption which applies to the works defined in this section; and

(ii) The individual has complied and continues to comply with any and all requests made

by the tax administrator.

(d) Any individual to whom this section applies and who makes an application to the tax

administrator is entitled to a sales tax exemption for the sale of a work or works sold from the

individual's business located in the economic development zone which would, apart from this

section, be subject to the tax rate imposed by the state of Rhode Island.

(e) When an individual makes a request for the exemption, the tax administrator is

entitled to all books, documents, or other evidence relating to the publication, production or

creation of the works that may be deemed necessary by the tax administrator for the purposes of

the exemption. The time period in which to provide this information is in the sole discretion of

the tax administrator and specified in the notice.

(f) In addition to the information required in subsection (e), the tax administrator may

require the individual(s) to submit an annual certified accounting of the numbers of works sold,

the type of work sold, and the date of the sale. Failure to file this report may, in the sole discretion

of the tax administrator, terminate the individual's eligibility for the exemption.

(g) Any person storing, using, or otherwise consuming in this state any work or works

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

tax on the work or works.

(h) Notwithstanding the provisions of this section, any individual to whom this section

may apply shall comply with all the administration, collection, and other provisions of chapters

18 and 19 of this title.

SECTION 2. Section 44-30-1.1 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

44-30-1.1. Exemption from tax for writers, composers and artists. [Effective

January 1, 2004.] -- (A) This section shall only apply to writers, composers and artists residing

within a section of the defined economic development zone within the cities of Providence,

Pawtucket or Woonsocket, or the economic development zone within the town of Westerly as

defined in section 44-18-30B(c)(1)(i), or within the city of Newport or within the town of

Tiverton, or a tax pass-through entity wholly owned by one or more such individuals and who

create such work while residing in the zone, or in the case of Newport or within the town of

Tiverton, within those areas of the city or town which are zoned "general business" or "waterfront

business". For the purposes of this section, a "work" shall mean an original and creative work,

whether written, composed, created or executed for "one-of-a-kind, limited" production, before or

after the passing of this section, which falls into one of the following categories:

(1) A book or other writing;

(2) A play or the performance of said play;

(3) A musical composition or the performance of said composition;

(4) A painting or other like picture;

(5) A sculpture;

(6) Traditional and fine crafts;

(7) The creation of a film or the acting of said film;

(8) The creation of a dance or the performance of said dance;

For purposes of this section, a "work" does not apply to any piece or performance

created or executed for industry oriented or related production.

(B) (1) This section shall apply to any individual:

(a) Who is a resident within the section of the economic development zone designated as

the Arts and Entertainment District in the downtown area of the city of Providence, Woonsocket

or in the city of Pawtucket, and deriving the income exempted from within said district while a

resident of said zone, or who is a resident within the section of the arts and entertainment district

in the town of Westerly, as defined in subsection 44-18-30B(C)(1)(i) and who derives the income

exempted from within said district while a resident of said zone. For the purposes of this section,

the arts and entertainment district in Providence is defined as the area bounded by Pine Street to

the southeast, Dorrance Street to the northeast, Sabin Street to the northwest and Empire Street to

the southwest. The Westerly arts and entertainment district is defined in subsection 44-18-30B(C)

(1)(i). The abovementioned streets shall be included in the district; and in Pawtucket shall be

defined as the area beginning at the point of intersection of Dexter Street and the Central Falls

line, then east along the Central Falls Line to the Blackstone River, then north along the city

boundary on the Blackstone River to the Cumberland line, then west along the Pawtucket city

boundary line to I-95, then south along I-95 to Pine Street, then north on Pine Street to AMTRAK

Right of Way, then northwest along the AMTRAK Right of Way to Dexter Street, then north on

Dexter Street to the Central Falls line. The abovementioned streets shall be included in the

district; and in Woonsocket shall be defined as the area beginning at a point of land on the

southwest bank of the Blackstone River abutting the bridge for the Providence & Worcester

Railroad and proceeding northerly to a point at the intersection of Worrall Street, Clinton Street

and Harry S. Truman Drive, then proceeding northwesterly along Worrall Street to its intersection

with Social Street, then turning westerly on Social Street proceeding to its intersection with Main

Street, Blackstone Street and North Main Street, then turning northwesterly and proceeding along

Blackstone Street to its intersection with River Street, then turning northerly and proceeding

along River Street to its intersection with the northeast bank of Blackstone River, then following

the riverbank southerly to the bridge at Bernon Street and turning easterly crossing the Blackstone

River via Bernon Street and proceeding to its intersection with Front Street, then turning

northeasterly on Front Street and proceeding to its intersection with Hamlet Avenue, and to

include the former Courthouse on the southerly side of Front Street at its intersection with Hamlet

Avenue, then turning easterly on Hamlet Avenue and proceeding to its intersection with Manville

Road, then turning southeasterly on Manville Road and proceeding to its intersection with

Davison Avenue, then turning northeasterly on Davison Avenue and proceeding to a point on the

southwest bank of the Blackstone River, then turning northerly, following the southerly riverbank

to the point of beginning. The abovementioned streets are included in the district.

This section shall also apply to any individual who is a resident of the city of Newport or

the town of Tiverton and whose income otherwise qualifies for an exemption as provided for in

this section.

(b) Who is determined by the tax administrator, after consideration of any evidence in

relation to the matter which the individual submits to him or her and after such consultation as

may seem to him or her to be necessary with such person or body of persons as in his or her

opinion may be of assistance to him or her, to have written, composed or executed either solely or

jointly with another individual, a work or works would fall into one of the categories listed in

section (A) above.

tax administrator in that behalf shall, subject to paragraph (2) below, be entitled to have the

profits or gains arising to him or her from the publication, production or sale of a work or works

in relation to which the tax administrator has made a determination under subsection (B)(1)(b) of

this section to be taken as a modification reducing federal adjusted gross income.

(2) The modification authorized by this section shall apply to the year in which the profit

or gain from the publication, production or sale of a work is realized.

(D) The tax administrator may serve on an individual who makes a claim under this

subsection a notice or notices in writing requiring him or her to make available within such time

as may be specified in the notice of all such books, accounts and documents in his or her

possession or power as may be requested, being books, accounts and documents relating to the

publication, production or sale of the work in respect of the profits or gains of which exemption is

claimed.

(E) For the purpose of determining the amount of profits or gains subject to modification

under this section, the tax administrator may make such apportionment of receipts and expenses

as may be necessary.

(F) Notwithstanding any other provisions of this chapter, any individual seeking relief

under this section shall file a Rhode Island personal income tax return listing the modification

reducing federal adjusted gross income relating to profits or gains realized from the works as

defined in this section.

SECTION 3. This act shall take effect January 1, 2005.

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LC00273/SUB A

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