Chapter
256
2006 -- S 2892
Enacted 07/03/06
A N A
C T
RELATING TO TAXATION
- PROPERTY SUBJECT TO TAXATION
Introduced By: Senators
Algiere, and Breene
Date Introduced: March 08,
2006
It is enacted
by the General Assembly as follows:
SECTION
1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property
Subject
to Taxation" is hereby amended to read as follows:
44-3-3.
Property exempt. -- The following property is exempt from taxation:
(1) Property belonging to the state except as provided in section 44-4-4.1;
(2) Lands ceded or belonging to the United States;
(3) Bonds and other securities issued and exempted from taxation by the
government of
the United
States, or of this state;
(4) Real estate, used exclusively for military purposes, owned by chartered or
incorporated
organizations approved by the adjutant general, and composed of members of the
national
guard, the naval militia, or the independent chartered military organizations;
(5) Buildings for free public schools, buildings for religious worship, and the
land upon
which
they stand and immediately surrounding them, to an extent not exceeding five
(5) acres so
far as
the buildings and land are occupied and used exclusively for religious or
educational
purposes;
(6) Dwellings houses and the land on which they stand, not exceeding one acre
in size,
or the
minimum lot size for zone in which the dwelling house is located, whichever is
the greater,
owned by
or held in trust for any religious organization and actually used by its
officiating clergy,
to an
amount not exceeding one hundred fifty thousand dollars ($150,000) for each
house and
land
owned and used; provided that the city council of Warwick may exempt by
ordinance the
property
previously described in this subdivision within the city of Warwick to an
amount not
exceeding
four hundred thousand dollars ($400,000); and except in Bristol where the
property
previously
described in this paragraph is exempt to an amount not exceeding five hundred
thousand
dollars ($500,000); provided also dwelling houses and the land on which they
stand in
Bristol,
not exceeding one acre in size, or the minimum lot size for zone in which the
dwelling
house is
located, whichever is the greater, owned by or held in trust for any religious
organization
and
actually used as a convent or nunnery by its religious order, to an amount not
exceeding five
hundred
thousand dollars ($500,000) for each house and land owned and used; provided,
further
that in
the town of Lincoln, the exemption shall be three hundred thousand dollars
($300,000) for
parsonages
of the various churches in the town, which exemption shall be limited solely to
property
actually used by the respective religion's officiating clergy as the clergy's
official place
of
residence. ; provided, further that in the town of Charlestown, where
the property previously
described
in this paragraph is exempt in total, along with dwelling houses and the land
on which
they
stand in Charlestown, not exceeding one acre in size, or the minimum lot size
for zone in
which
the dwelling house is located, whichever is the greater, owned by or held in
trust for any
religious
organization and actually used by its officiating clergy, or used as a convent,
nunnery, or
retreat
center by its religious order.
(7) Intangible personal property owned by, or held in trust for, any religious
or charitable
organization,
if the principal or income is used or appropriated for religious or charitable
purposes;
(8) Buildings and personal estate owned by any corporation used for a school,
academy,
or
seminary of learning, and of any incorporated public charitable institution,
and the land upon
which
the buildings stand and immediately surrounding them to an extent not exceeding
one acre,
so far
as they are used exclusively for educational purposes, but no property or
estate whatever is
hereafter
exempt from taxation in any case where any part of its income or profits or of
the
business
carried on there is divided among its owners or stockholders;
(9) Estates, persons, and families of the president and professors for the time
being of
Brown
University for not more than ten thousand dollars ($10,000) for each officer,
the officer's
estate,
person, and family included, but only to the extent that any person had claimed
and
utilized
the exemption prior to, and for a period ending either on or after December 31,
1996;
(10) Property especially exempt by charter unless the exemption has been waived
in
whole or
in part;
(11) Lots of land used exclusively for burial grounds;
(12) Property, real and personal, held for or by an incorporated library,
society, or any
free
public library, or any free public library society, so far as the property is
held exclusively for
library
purposes, or for the aid or support of the aged poor, or poor friendless
children, or the poor
generally,
or for a hospital for the sick or disabled;
(13) Real or personal estate belonging to or held in trust for the benefit of
incorporated
organizations
of veterans of any war in which the United States has been engaged, the parent
body of
which has been incorporated by act of congress, to the extent of four hundred
thousand
dollars
($400,000) if actually used and occupied by the association; provided, that the
city council
of the
city of Cranston may by ordinance exempt the real or personal estate as
previously
described
in this subdivision located within the city of Cranston to the extent of five
hundred
thousand
dollars ($500,000);
(14) Property, real and personal, held for or by the fraternal corporation,
association, or
body
created to build and maintain a building or buildings for its meetings or the
meetings of the
general
assembly of its members, or subordinate bodies of the fraternity, and for the
accommodation
of other fraternal bodies or associations, the entire net income of which real
and
personal
property is exclusively applied or to be used to build, furnish, and maintain
an asylum or
asylums,
a home or homes, a school or schools, for the free education or relief of the
members of
the
fraternity, or the relief, support, and care of worthy and indigent members of
the fraternity,
their
wives, widows, or orphans, and any fund given or held for the purpose of public
education,
almshouses,
and the land and buildings used in connection therewith;
(15) Real estate and personal property of any incorporated volunteer fire
engine
company
or incorporated volunteer ambulance or rescue corps in active service;
(16) The estate of any person who in the judgment of the assessors is unable
from
infirmity
or poverty to pay the tax; providing, that in the town of Burrillville the tax
shall
constitute
a lien for five (5) years on the property where the owner is entitled to the
exemption. At
the
expiration of five (5) years, the lien shall be abated in full. Provided, if
the property is sold or
conveyed
or if debt secured by the property is refinanced during the five (5) year
period, the lien
immediately
becomes due and payable; any person claiming the exemption aggrieved by an
adverse
decision of an assessor shall appeal the decision to the local board of tax
review, and
thereafter
according to the provisions of section 44-5-26;
(17) Household furniture and family stores of a housekeeper in the whole,
including
clothing,
bedding, and other white goods, books, and all other tangible personal property
items
which
are common to the normal household;
(18) Improvements made to any real property to provide a shelter and fallout
protection
from
nuclear radiation, to the amount of one thousand five hundred dollars ($1,500);
provided,
that the
improvements meet applicable standards for shelter construction established
from time to
time by
the Rhode Island emergency management agency. The improvements are deemed to
comply
with the provisions of any building code or ordinance with respect to the
materials or the
methods
of construction used and any shelter or its establishment is deemed to comply
with the
provisions
of any zoning code or ordinance;
(19) Aircraft for which the fee required by section 1-4-6 has been paid to the
tax
administrator;
(20) Manufacturer's inventory.
(i) For the purposes of sections 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a
person is
deemed
to be a manufacturer within a city or town within this state if that person
uses any
premises,
room, or place in it primarily for the purpose of transforming raw materials
into a
finished
product for trade through any or all of the following operations: adapting,
altering,
finishing,
making, and ornamenting; provided, that public utilities, non-regulated power
producers
commencing commercial operation by selling electricity at retail or taking
title to
generating
facilities on or after July 1, 1997, building and construction contractors,
warehousing
operations
including distribution bases or outlets of out-of-state manufacturers, and
fabricating
processes
incidental to warehousing or distribution of raw materials such as alteration
of stock for
the
convenience of a customer, are excluded from this definition.
(ii) For the purposes of sections 44-3-3, 44-4-10, and 44-5-38, the term
"manufacturer's
inventory"
or any similar term means and includes the manufacturer's raw materials, the
manufacturer's
work in process, and finished products manufactured by the manufacturer in this
state,
and not sold, leased, or traded by the manufacturer or its title or right to
possession
divested;
provided, that the term does not include any finished products held by the
manufacturer
in any retail
store or other similar selling place operated by the manufacturer whether or
not the
retail
establishment is located in the same building in which the manufacturer
operates the
manufacturing
plant.
(iii) For the purpose of section 44-11-2, a "manufacturer" is a
person whose principal
business
in this state consists of transforming raw materials into a finished product
for trade
through
any or all of the operations described in paragraph (i) of this subdivision. A
person will
be
deemed to be principally engaged if the gross receipts which that person
derived from the
manufacturing
operations in this state during the calendar year or fiscal year mentioned in
section
44-11-1
amounted to more than fifty percent (50%) of the total gross receipts which
that person
derived
from all the business activities in which that person engaged in this state
during the
taxable
year. For the purpose of computing the percentage, gross receipts derived by a
manufacturer
from the sale, lease, or rental of finished products manufactured by the
manufacturer
in this state, even though the manufacturer's store or other selling place may
be at a
different
location from the location of the manufacturer's manufacturing plant in this
state, are
deemed
to have been derived from manufacturing.
(iv) Within the meaning of the preceding paragraphs of this subdivision, the
term
"manufacturer"
also includes persons who are principally engaged in any of the general
activities
coded
and listed as establishments engaged in manufacturing 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, but eliminating as manufacturers those persons, who, because
of their
limited
type of manufacturing activities, are classified in the manual as falling
within the trade
rather
than an industrial classification of manufacturers. Among those thus
eliminated, and
accordingly
also excluded as manufacturers within the meaning of this paragraph, are
persons
primarily
engaged in selling, to the general public, products produced on the premises
from which
they are
sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade
shops, and
custom
tailors, except, that a person who manufactures bakery products for sale
primarily for
home
delivery, or through one or more non-baking retail outlets, and whether or not
retail outlets
are
operated by person, is a manufacturer within the meaning of this paragraph.
(v) The term "Person" means and includes, as appropriate, a person,
partnership, or
corporation.
(vi) The department of administration shall provide to the local assessors any
assistance
that is
necessary in determining the proper application of the definitions in this
subdivision.
(21) Real and tangible personal property acquired to provide a treatment
facility used
primarily
to control the pollution or contamination of the waters or the air of the
state, as defined
in
chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility
having been
constructed,
reconstructed, erected, installed, or acquired in furtherance of federal or state
requirements
or standards for the control of water or air pollution or contamination, and
certified
as
approved in an order entered by the director of environmental management. The
property is
exempt
as long as it is operated properly in compliance with the order of approval of
the director
of
environmental management; provided, that any grant of the exemption by the
director of
environmental
management in excess of ten (10) years is approved by the city or town in which
the
property is situated. This provision applies only to water and air pollution
control properties
and
facilities installed for the treatment of waste waters and air contaminants
resulting from
industrial
processing; furthermore, it applies only to water or air pollution control properties
and
facilities
placed in operation for the first time after April 13, 1970;
(22) New manufacturing machinery and equipment acquired or used by a
manufacturer
and purchased
after December 31, 1974. Manufacturing machinery and equipment is defined as:
(i) Machinery and equipment used exclusively in the actual manufacture or
conversion
of raw
materials or goods in the process of manufacture by a manufacturer as defined
in
subdivision
(20) of this section, and machinery, fixtures, and equipment used exclusively
by a
manufacturer
for research and development or for quality assurance of its manufactured
products;
(ii) Machinery and equipment which is partially used in the actual manufacture
or
conversion
of raw materials or goods in process of manufacture by a manufacturer as
defined in
subdivision
(20) of this section, and machinery, fixtures, and equipment used by a
manufacturer
for
research and development or for quality assurance of its manufactured products,
to the extent
to which
the machinery and equipment is used for the manufacturing processes, research
and
development
or quality assurance. In the instances where machinery and equipment is used in
both
manufacturing and/or research, and development, and/or quality assurance
activities and
non-manufacturing
activities, the assessment on machinery and equipment is prorated by
applying
the percentage of usage of the equipment for the manufacturing, research, and
development
and quality assurance activity to the value of the machinery and equipment for
purposes
of taxation, and the portion of the value used for manufacturing, research, and
development,
and quality assurance is exempt from taxation. The burden of demonstrating this
percentage
usage of machinery and equipment for manufacturing and for research, and
development
and/or quality assurance of its manufactured products rests with the
manufacturer;
and
(iii) Machinery and equipment described in section 44-18-30(7) and (22) that
was
purchased
after July 1, 1997; provided that the city or town council of the city or town
in which
the
machinery and equipment is located adopts an ordinance exempting the machinery
and
equipment
from taxation. For purposes of this subsection, city councils and town councils
of any
municipality
may by ordinance wholly or partially exempt from taxation the machinery and
equipment
discussed in this subsection for the period of time established in the ordinance
and
may by
ordinance establish the procedures for taxpayers to avail themselves of the
benefit of any
exemption
permitted under this section; provided, that the ordinance does not apply to
any
machinery
or equipment of a business, subsidiary or any affiliated business which locates
or
relocates
from a city or town in this state to another city or town in the state.
(23) Precious metal bullion, meaning any elementary metal which has been put
through a
process of
melting or refining, and which is in a state or condition that its value
depends upon its
content
and not its form. 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;
(24) Hydroelectric power generation equipment, which includes, but is not
limited to,
turbines,
generators, switchgear, controls, monitoring equipment, circuit breakers,
transformers,
protective
relaying, bus bars, cables, connections, trash racks, headgates, and conduits.
The
hydroelectric
power generation equipment must have been purchased after July 1, 1979, and
acquired
or used by a person or corporation who owns or leases a dam and utilizes the equipment
to
generate hydroelectric power;
(25) Subject to authorization by formal action of the council of any city or
town, any real
or
personal property owned by, held in trust for, or leased to an organization
incorporated under
chapter
6 of title 7, as amended, or an organization meeting the definition of
"charitable trust" set
out in
section 18-9-4, as amended, or an organization incorporated under the not for
profits
statutes
of another state or the District of Columbia, the purpose of which is the
conserving of
open
space, as that term is defined in chapter 36 of title 45, as amended, provided
the property is
used
exclusively for the purposes of the organization;
(26) Tangible personal property, the primary function of which is the recycling,
reuse, or
recovery
of materials (other than precious metals, as defined in section
44-18-30(24)(ii) and (iii)),
from or
the treatment of "hazardous wastes", as defined in section 23-19.1-4,
where the
"hazardous
wastes" are generated primarily by the same taxpayer and where the
personal property
is
located at, in, or adjacent to a generating facility of the taxpayer. The
taxpayer may, but need
not,
procure an order from the director of the department of environmental
management
certifying
that the tangible personal property has this function, which order effects a
conclusive
presumption
that the tangible personal property qualifies 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 shall not be open to
public inspection
or publicly disclosed unless disclosure is otherwise required under chapter 21
of
title 28
or chapter 24.4 of title 23;
(27) Motorboats as defined in section 46-22-2 for which the annual fee required
in
section
46-22-4 has been paid;
(28) Real and personal property of the Providence performing arts center, a
non-business
corporation
as of December 31, 1986;
(29) Tangible personal property owned by, and used exclusively for the purposes
of, any
religious
organization located in the city of Cranston;
(30) Real and personal property of the Travelers Aid Society of Rhode Island, a
nonprofit
corporation, the Union Mall Real Estate Corporation, and any limited
partnership or
limited
liability company which is formed in connection with, or to facilitate the
acquisition of,
the
Providence YMCA Building; and
(31) Real and personal property of Meeting Street Center or MSC Realty, Inc.,
both not-
for-profit
Rhode Island corporations, and any other corporation, limited partnership, or
limited
liability
company which is formed in connection with, or to facilitate the acquisition
of, the
properties
designated as the Meeting Street National Center of Excellence on Eddy Street
in
Providence,
Rhode Island.
SECTION
2. This act shall take effect upon passage.
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LC02654
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