Chapter
006
2007 -- H 5143 SUBSTITUTE A
Enacted 03/14/07
A N A C T
RELATING TO TAXATION
Introduced By: Representatives Costantino and Crowley
Date Introduced: January
23, 2007
It is enacted by the General Assembly as follows:
SECTION
1. Section 39-1-27.7 of the General Laws in Chapter 39-1 entitled "Public
Utilities
Commission" is hereby amended to read as follows:
39-1-27.7.
System reliability and least-cost procurement. -- Least-cost
procurement
shall
comprise system reliability and energy efficiency and conservation procurement
as provided
for in
this section and supply procurement as provided for in section 39-1-27.8, as
complementary
but
distinct activities that have as common purpose meeting electrical energy needs
in Rhode
Island,
in a manner that is optimally cost-effective, reliable, prudent and
environmentally
responsible.
(a) The commission shall establish not later than June 1, 2008, standards for
system
reliability
and energy efficiency and conservation procurement, which shall include
standards and
guidelines
for:
(1) System reliability procurement, including but not limited to:
(i) Procurement of energy supply from diverse sources, including, but not
limited to,
renewable
energy resources as defined in chapter 26 of this title;
(ii) Distributed generation, including, but not limited to, renewable energy
resources and
thermally
leading combined heat and power systems, which is reliable and is
cost-effective, with
measurable,
net system benefits;
(iii) Demand response, including, but not limited to, distributed generation,
back-up
generation
and on-demand usage reduction, which shall be designed to facilitate electric
customer
participation
in regional demand response programs, including those administered by the
independent
service operator of New England ("ISO-NE") and/or are designed to
provide local
system
reliability benefits through load control or using on-site generating
capability;
(iv) To effectuate the purposes of this division, the commission may establish
standards
and/or
rates (A) for qualifying distributed generation, demand response, and renewable
energy
resources,
(B) for net-metering, (C) for back-up power and/or standby rates that reasonably
facilitate
the development of distributed generation, and (D) for such other matters as
the
commission
may find necessary or appropriate.
(2) Least-cost procurement, which shall include procurement of energy
efficiency and
energy
conservation measures that are prudent and reliable and when such measures are
lower
cost
than acquisition of additional supply, including supply for periods of high
demand.
(b) The standards and guidelines provided for by subsection (a) shall be
subject to
periodic
review and as appropriate amendment by the commission, which review will be
conducted
not less frequently than every three (3) years after the adoption of the
standards and
guidelines.
(c) To implement the provisions of this section:
(1) The commissioner of the office of energy resources and the energy
efficiency and
resources
management council, either or jointly or separately, shall provide the
commission
findings
and recommendations with regard to system reliability and energy efficiency and
conservation
procurement on or before March 1, 2008, and triennially on or before March 1,
thereafter
through March 1, 2017.
(2) The commission shall issue standards not later than June 1, 2008, with
regard to
plans
for system reliability and energy efficiency and conservation procurement,
which standards
may be
amended or revised by the commission as necessary and/or appropriate.
(3) The energy efficiency and resources management council shall prepare by
July 15,
2009 2008, a reliability and efficiency procurement
opportunity report which shall identify
opportunities
to procure efficiency, distributed generation, demand response and renewables,
which
report shall be submitted to the electrical distribution company, the
commission, the office
of
energy resources and the joint committee on energy.
(4) Each electrical distribution company shall submit to the commission on or
before
September
1, 2008, and triennially on or before September 1, thereafter through September
1,
2017, a
plan for system reliability and energy efficiency and conservation procurement.
In
developing
the plan, the distribution company may seek the advice of the commissioner and
the
council.
The plan shall include measurable goals and target percentages for each energy
resource,
pursuant
to standards established by the commission, including efficiency, distributed
generation,
demand
response, combined heat and power, and renewables.
(5) The commission shall issue an order with regard to the plan from the
electrical
distribution
company not greater than sixty (60) days after it is filed with the commission.
(6) Each electrical distribution company shall provide a status report, which
shall be
public,
on the implementation of least cost procurement on or before December 15, 2008,
and on
or
before February 1, 2009, to the commission, the division, the commissioner of
the office of
energy
resources and the energy efficiency and resources management council which may
provide
the distribution company recommendations with regard to effective
implementation of
least
cost procurement. The report shall include the targets for each energy resource
included in
the
order approving the plan and the achieved percentage for energy resource,
including the
achieved
percentages for efficiency, distributed generation, demand response, combined
heat and
power,
and renewables.
(d) If the commission shall determine that the implementation of system
reliability and
energy
efficiency and conservation procurement has caused or is likely to cause under
or over-
recovery
of overhead and fixed costs of the company implementing said procurement, the
commission
may establish a mandatory rate adjustment clause for the company so affected in
order to
provide for full recovery of reasonable and prudent overhead and fixed costs.
(e) The commission shall conduct a contested case proceeding to establish a
performance
based
incentive plan which allows for additional compensation for each electric
distribution
company
and each company providing gas to end-users and/or retail customers based on
the level
of its
success in mitigating the cost and variability of electric and gas services
through
procurement
portfolios.
SECTION
2. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled
"Video
Lottery
Terminal" is hereby amended to read as follows:
42-61.2-7.
Division of revenue. -- (a) Notwithstanding the provisions of section
42-61-
15, the
allocation of net terminal income derived from video lottery games is as
follows:
(1) For deposit in the general fund and to the state lottery division fund for
administrative
purposes: Net terminal income not otherwise disbursed in accordance with
subdivisions
(a)(1)(2) -- (a)(6) herein;
(i) Nineteen one hundredths of one percent (0.19%) up to a maximum of twenty
million
dollars
($20,000,000) shall be equally allocated to the distressed communities as
defined in
section
45-13-12 provided that no eligible community shall receive more than
twenty-five percent
(25%) of
that community's currently enacted municipal budget as its share under this
specific
subsection.
Distributions made under this specific subsection are supplemental to all other
distributions
made under any portion of general laws section 45-13-12.
(ii) Five one hundredths of one percent (0.05%) up to a maximum of five million
dollars
($5,000,000)
shall be appropriated to property tax relief to fully fund the provisions of
section 44-
33-2.1.
The maximum credit defined in subdivision 44-33-9(2) shall increase to the
maximum
amount
to the nearest five dollar ($5.00) increment within the allocation until a
maximum credit
of five
hundred dollars ($500) is obtained. In no event shall the exemption in any
fiscal year be
less
than the prior fiscal year.
(iii) One and twenty-two one hundredths of one percent (1.22%) to fund section
44-34.1-
1,
entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of
1998", to the maximum
amount
to the nearest two hundred fifty dollar ($250) increment within the allocation.
In no event
shall
the exemption in any fiscal year be less than the prior fiscal year.
(iv) Ten one hundredths of one percent (0.10%) to a maximum of ten million
dollars
($10,000,000)
for supplemental distribution to communities not included in paragraph
(a)(1)(i)
above
distributed proportionately on the basis of general revenue sharing distributed
for that
fiscal
year.
(2) To the licensed video lottery retailer:
(a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai
Ali twenty-
six
percent (26%) minus three hundred eighty four thousand nine hundred ninety-six
dollars
($384,996);
(ii) On and after the effective date of the NGJA Master Contract, to the
licensed video
lottery
retailer who is a party to the NGJA Master Contract, all sums due and payable
under said
Master
Contract minus three hundred eighty four thousand nine hundred ninety-six
dollars
($384,996).
(b) (i) Prior to the effective date of the UTGR Master Contract, to the present
licensed
video
lottery retailer at Lincoln Park which is not a party to the UTGR Master
Contract, twenty-
eight
and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven
thousand
six hundred eighty-seven dollars ($767,687);
(ii) On and after the effective date of the UTGR Master Contract, to the
licensed video
lottery
retailer who is a party to the UTGR Master Contract, all sums due and payable
under said
Master
Contract minus seven hundred sixty-seven thousand six hundred eighty-seven
dollars
($767,687).
(3) (i) To the technology providers who are not a party to the GTECH Master
Contract
as set
forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the
net
terminal
income of the provider's terminals;
(ii) To contractors who are a party to the Master Contract as set forth and
referenced in
Public
Law 2003, Chapter 32, all sums due and payable under said Master Contract;
(iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted
proportionately
from the payments to technology providers the sum of six hundred twenty-eight
thousand
seven hundred thirty-seven dollars ($628,737);
(4) To the city of Newport one and one hundreth percent (1.01%) of net terminal
income
of
authorized machines at Newport Grand and to the town of Lincoln one and
twenty-six
hundreths
(1.26%) of net terminal income of authorized machines at Lincoln Park; and
(5) To the Narragansett Indian Tribe, seventeen hundredths of one percent
(0.17%) of net
terminal
income of authorized machines at Lincoln Park up to a maximum of ten million
dollars
($10,000,000)
per year, which shall be paid to the Narragansett Indian Tribe for the account
of a
Tribal
Development Fund to be used for the purpose of encouraging and promoting: home
ownership
and improvement, elderly housing, adult vocational training; health and social
services;
childcare; natural resource protection; and economic development consistent
with state
law.
Provided, however, such distribution shall terminate upon the opening of any
gaming facility
in which
the Narragansett Indians are entitled to any payments or other incentives; and
provided
further,
any monies distributed hereunder shall not be used for, or spent on previously
contracted
debts.
(6) Unclaimed prizes and credits shall remit to the general fund of the state;
(7) Payments into the state's general fund specified in subdivisions (a)(1) and
(a)(6) shall
be made
on an estimated monthly basis. Payment shall be made on the tenth day following
the
close of
the month except for the last month when payment shall be on the last business
day.
SECTION
3. Section 42-141-5 of the General Laws in Chapter 42-141 entitled
"Affordable
Energy" is hereby amended to read as follows:
42-141-5.
Affordable energy fund. -- (a) Fund established.
(1) A special account is hereby established in the state treasury to be called
the
"affordable
energy fund."
(2) Money remaining in the fund at the end of a fiscal year shall remain
available for
expenditure
in successive fiscal years.
(3) The fund shall be used for only those purposes enumerated in subsection
(d).
(b) Financing of the fund. - The fund shall consist of the following sources:
(1) Sums the legislature may appropriate;
(2) Moneys received from federal, state, private donor or other sources for the
purpose of
energy
affordability by low income households;
(3) Fees required pursuant to subsection (c); and
(4) Any interest earned on the moneys in the fund.
(c) Affordable energy fees.
(1) [Effective July 1, 2007]. An affordable energy fee in an amount set
forth in this
subsection
shall be imposed on gross receipts of electricity and gas companies and gross
receipts
on the
sale of heating fuels not used for residential heating. The fee shall be
remitted to the
division
of taxation according to the applicable schedule for the remission of the gross
receipts
tax as
provided for in chapter 44-13 or the sales and use as provided for in chapter
44-18. The
fees
shall be as follows:
(i) Gas. - One percent (1%) of the gross receipts of gas companies subject to
the
provisions
of chapter 44-13, "Public Service Corporation Tax".
(ii) Electricity. - One percent (1%) of the gross receipts of electric
companies subject to
the
provisions of chapter 44-13. "Public Service Corporation Tax".
(iii) Heating fuel other than natural gas and electricity. - Two percent (2%)
of gross
receipts
from the sales and use of heating fuel subject to the provisions of chapter
44-18. "Sales
and Use
Taxes -- Liability and Computation".
(2) Every person from whom an affordable energy fee is due shall be liable for
the fee
until it
has been paid to the state.
(d) Purposes of the fund.
(1) The commissioner may use money from the fund to:
(i) Support weatherization and energy conservation educational programs and
weatherization
and energy conservation services for low-income and very low income
households;
(ii) Compensate electric and gas distribution companies for revenues lost due
to the
reductions
in distribution and customer charges, in accordance with a plan approved by the
commission,
to very low income households, and if feasible to low income households, which
shall,
as a first priority, be used to provide up to a fifty percent (50%) reduction
in the distribution
and
customer charges for a reasonable and prudent use by very low-income households
of gas
and
electricity that does not exceed average use for comparable dwelling units.
(iii) Defray the cost of heating fuel delivered to very low income households
by an
amount
not to exceed twenty-five percent (25%) of the allowable cost of heating fuel
and a total
usage by
the household, supported assistance from all sources overseen by the
commissioner, that
is
reasonable and prudent and does not exceed average use for comparable dwelling
units.
(iv) It is not the purpose of the fund to reduce the amount of assistance a
household
would
otherwise receive from LIHEAP and other sources in the absence of the fund or
to
subsidize
utility rates in effect as of July 1, 2006, and provided for by law.
(2) If the commissioner determines it is in the public interest to allocate
funds for the
purposes
set forth in subparagraph (1)(ii) above, the commissioner shall notify the
commission of
the
amount of funds to be allocated for a specified period. The commission shall
then direct the
electric
and/or gas distribution companies to file amendments to the appropriate tariffs
to
implement
rate reductions designed to provide the rate reduction consistent with the
amount
allocated
for the period designated, which amendments are subject to the review and
approval of
the
commission. Once approval is given, the allocated funds shall be transferred to
the gas and/or
electric
distribution company. Any funds held after transfer shall accumulate interest
at the
customer
deposit rate ("interest"). If, at the end of the rate reduction
period, there are any unused
dollars
from the fund, such dollars shall be returned to the affordable energy fund
with interest.
Likewise,
if at the end of the rate reduction period, there were not enough funds
allocated to
cover
the rate reduction as designed, the shortfall will be reimbursed from the
affordable energy
fund
with interest; provided, however, if there are no additional funds available
from the fund,
such
shortfall or uncovered balance of such shortfall will be recovered with
interest from all
customers
in a manner and over the period approved by the commission.
(e) Administration and records of the fund.
(1) The commissioner shall administer the fund in accordance with this chapter.
(2) The commissioner in consultation with the department shall adopt procedures
governing
the expenditure of, and accounting for, money expended from the fund.
(3) The commissioner is responsible for insuring that there are adequate moneys
available
in the fund to carry out the purposes of this section.
(4) The commissioner shall maintain accounting records showing the income and
expenses
of the fund.
(f) Expenditure of fund money. - Disbursements may be made from the fund for
the
following
purposes:
(1) Necessary administrative expenses, personnel expenses and equipment costs
of the
office
related to this section which shall not exceed ten percent (10%) of the revenue
of the fund;
(2) All costs to effectuate the purposes of the fund as set forth in subsection
(d).
(g) Report to the legislature. - The commissioner shall submit a report to the
legislature
not
later than the tenth (10th) day following the convening of each regular session
of the
legislature.
The report may include information considered significant by the commissioner
but
must
include:
(1) The amount of money expended under section 42-141-5 during the preceding
fiscal
year;
(2) The amount and source of money received during the preceding fiscal year;
(3) A detailed summary of activities funded by the fund during the preceding
fiscal year;
(4) The projected cost to the fund for affordable energy programs in the next
fiscal year.
SECTION
4. Sections 44-18-7, 44-18-7.1, 44-18-8 and 44-18-30 of the General Laws in
Chapter
44-18 entitled "Sales and Use Taxes - Liability and Computation" are
hereby amended to
read as
follows:
44-18-7.
Sales defined. [Effective January 1, 2007.] -- "Sales" means
and includes:
(1) Any transfer of title or possession, exchange, barter, lease, or rental,
conditional or
otherwise,
in any manner or by any means of tangible personal property for a
consideration.
"Transfer
of possession", "lease", or "rental" includes
transactions found by the tax administrator
to be in
lieu of a transfer of title, exchange, or barter.
(2) The producing, fabricating, processing, printing, or imprinting of tangible
personal
property
for a consideration for consumers who furnish either directly or indirectly the
materials
used in
the producing, fabricating, processing, printing, or imprinting.
(3) The furnishing and distributing of tangible personal property for a
consideration by
social,
athletic, and similar clubs and fraternal organizations to their members or
others.
(4) The furnishing, preparing, or serving for consideration of food, meals, or
drinks,
including
any cover, minimum, entertainment, or other charge in connection therewith.
(5) A transaction whereby the possession of tangible personal property is
transferred, but
the
seller retains the title as security for the payment of the price.
(6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or
interstate
commerce,
of tangible personal property from the place where it is located for delivery
to a point
in this
state for the purpose of the transfer of title or possession, exchange, barter,
lease, or rental,
conditional
or otherwise, in any manner or by any means whatsoever, of the property for a
consideration.
(7) A transfer for a consideration of the title or possession of tangible
personal property,
which
has been produced, fabricated, or printed to the special order of the customer,
or any
publication.
(8) The furnishing and distributing of electricity, natural gas, artificial
gas, steam,
refrigeration,
and water.
(9) (i) The furnishing for consideration of intrastate, interstate and
international
telecommunications
service sourced in this state in accordance with subsections 44-18.1(15) and
(16) which includes local exchange service, intrastate
toll service, interstate and international toll
service
including cellular mobile telephone or telecommunications service, specialized
mobile
radio
and pagers and paging service including any form of mobile two-way
communication, and
all
ancillary services, any maintenance services of telecommunication equipment
other than as
provided
for in section subdivision 44-18-12(b)(ii)(B) and
including the furnishing, rental, or
leasing
of all equipment pertaining or incidental thereto; provided, that the service
is: rendered in
its
entirety within this state, originated in this state and terminated in another
state or a foreign
country
and with respect to which the service is charged to a telephone number,
customer, or
account
located in this state or to the account of any transmission instrument in this
state,
originated
in another state or a foreign country and terminated in this state and is
charged to a
telephone
number, customer, or account located in this state at which the service is
terminated, or
to
the account of any transmission instrument in this state at which the service
is terminated;
provided,
that the service does not include receipts except as otherwise provided in
sections 44-
18-8
and 44-18-12. For the purposes of
chapters 18 and 19 of this title only, telecommunication
service
does not include service rendered using a prepaid telephone calling
arrangement.
(ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in
accordance
with the
Mobile Telecommunications Sourcing Act (4 U.S.C. sections 116 -- 126), subject
to the
specific
exemptions described in 4 U.S.C. section 116(c), and the exemptions provided in
sections
44-18-8 and 44-18-12, mobile telecommunications services that are deemed to be
provided
by the customer's home service provider are subject to tax under this chapter
if the
customer's
place of primary use is in this state regardless of where the mobile
telecommunications
services originate, terminate or pass through. Mobile telecommunications
services
provided to a customer, the charges for which are billed by or for the
customer's home
service
provider, shall be deemed to be provided by the customer's home service
provider.
(10) The furnishing of service for transmission of messages by telegraph,
cable, or radio
and the
furnishing of community antenna television, subscription television, and cable
television
services.
(11) The rental of living quarters in any hotel, rooming house, or tourist
camp.
(12) The transfer for consideration of prepaid telephone calling arrangements
and the
recharge
of prepaid telephone calling arrangements sourced to this state in
accordance with
sections
44-18.1-11 and 44-18.1-15. If the
transfer or recharge of a prepaid telephone calling
arrangement
does not take place at a vendor's place of business, the transfer or recharge
is
conclusively
determined to take place at the customer's shipping address, or if there is no
item
shipped,
at the customer's billing address or the location associated with the
customer's mobile
telephone
number. "Prepaid telephone
calling arrangement" means and includes a prepaid
telephone
calling card and/or the right to exclusively purchase telecommunications
services, that
must
be paid for in advance, that enables the origination of calls using an access
number and/or
authorization
code, whether manually or electronically dialed prepaid calling service and prepaid
wireless
calling service.
44-18-7.1.
Additional definitions. [Effective January 1, 2007.] -- (a)
"Agreement"
means
the Streamlined Sales and Use Tax Agreement.
(b) "Alcoholic Beverages" means beverages that are suitable for human
consumption and
contain
one-half of one percent (.5%) or more of alcohol by volume.
(c) "Bundled Transaction" is the retail sale of two or more products,
except real property
and
services to real property, where (1) the products are otherwise distinct and
identifiable, and
(2) the
products are sold for one non-itemized price. A "bundled transaction"
does not include the
sale of
any products in which the "sales price" varies, or is negotiable,
based on the selection by
the
purchaser of the products included in the transaction.
(i) "Distinct and identifiable products" does not include:
(A) Packaging -- such as containers, boxes, sacks, bags, and bottles -- or
other materials -
- such
as wrapping, labels, tags, and instruction guides -- that accompany the
"retail sale" of the
products
and are incidental or immaterial to the "retail sale" thereof.
Examples of packaging that
are
incidental or immaterial include grocery sacks, shoeboxes, dry cleaning garment
bags and
express
delivery envelopes and boxes.
(B) A product provided free of charge with the required purchase of another
product. A
product
is "provided free of charge" if the "sales price" of the
product purchased does not vary
depending
on the inclusion of the products "provided free of charge."
(C) Items included in the member state's definition of "sales price,"
pursuant to
Appendix
C of the Agreement.
(ii) The term "one non-itemized price" does not include a price that
is separately
identified
by product on binding sales or other supporting sales-related documentation
made
available
to the customer in paper or electronic form including, but not limited to, an
invoice, bill
of sale,
receipt, contract, service agreement, lease agreement, periodic notice of rates
and
services,
rate card, or price list.
(iii) A transaction that otherwise meets the definition of a "bundled
transaction" as
defined
above, is not a "bundled transaction" if it is:
(A) The "retail sale" of tangible personal property and a service
where the tangible
personal
property is essential to the use of the service, and is provided exclusively in
connection
with the
service, and the true object of the transaction is the service; or
(B) The "retail sale" of services where one service is provided that
is essential to the use
or
receipt of a second service and the first service is provided exclusively in
connection with the
second
service and the true object of the transaction is the second service; or
(C) A transaction that includes taxable products and nontaxable products and
the
"purchase
price" or "sales price" of the taxable products is de minimis.
1. De minimis means the seller's "purchase price" or "sales
price" of the taxable products
is ten
percent (10%) or less of the total "purchase price" or "sales
price" of the bundled products.
2. Sellers shall use either the "purchase price" or the "sales
price" of the products to
determine
if the taxable products are de minimis. Sellers may not use a combination of
the
"purchase
price" and "sales price" of the products to determine if the
taxable products are de
minimis.
3. Sellers shall use the full term of a service contract to determine if the
taxable products
are de
minimis; or
(D) The "retail sale" of exempt tangible personal property and
taxable tangible personal
property
where:
1. the transaction includes "food and food ingredients",
"drugs", "durable medical
equipment",
"mobility enhancing equipment", "over-the-counter drugs",
"prosthetic devices" (all
as
defined in section 44-18-7.1) or medical supplies; and
2. where the seller's "purchase price" or "sales price" of
the taxable tangible personal
property
is fifty percent (50%) or less of the total "purchase price" or
"sales price" of the bundled
tangible
personal property. Sellers may not use a combination of the "purchase
price" and "sales
price"
of the tangible personal property when making the fifty percent (50%)
determination for a
transaction.
(d) "Certified Automated System (CAS)" means software certified under
the Agreement
to
calculate the tax imposed by each jurisdiction on a transaction, determine the
amount of tax to
remit to
the appropriate state, and maintain a record of the transaction.
(e) "Certified Service Provider (CSP)" means an agent certified under
the Agreement to
perform
all the seller's sales and use tax functions, other than the seller's
obligation to remit tax on
its own
purchases.
(f) Clothing and Related Items
(i) "Clothing" means all human wearing apparel suitable for general
use.
(ii) "Clothing accessories or equipment" means incidental items worn
on the person or in
conjunction
with "clothing." "Clothing accessories or equipment" does
not include "clothing,"
"sport
or recreational equipment," or "protective equipment."
(iii) "Protective equipment" means items for human wear and designed
as protection of
the
wearer against injury or disease or as protections against damage or injury of
other persons or
property
but not suitable for general use. "Protective equipment" does not
include "clothing,"
"clothing
accessories or equipment," and "sport or recreational
equipment."
(iv) "Sport or recreational equipment" means items designed for human
use and worn in
conjunction
with an athletic or recreational activity that are not suitable for general
use. "Sport or
recreational
equipment" does not include "clothing," "clothing accessories
or equipment," and
"protective
equipment."
(g) Computer and Related Items
(i) "Computer" means an electronic device that accepts information in
digital or similar
form and
manipulates it for a result based on a sequence of instructions.
(ii) "Computer software" means a set of coded instructions designed
to cause a
"computer"
or automatic data processing equipment to perform a task.
(iii) "Delivered electronically" means delivered to the purchaser by
means other than
tangible
storage media.
(iv) "Electronic" means relating to technology having electrical,
digital, magnetic,
wireless,
optical, electromagnetic, or similar capabilities.
(v) "Load and leave" means delivery to the purchaser by use of a
tangible storage media
where
the tangible storage media is not physically transferred to the purchaser.
(vi) "Prewritten computer software" means "computer
software," including prewritten
upgrades,
which is not designed and developed by the author or other creator to the
specifications
of a
specific purchaser. The combining of two (2) or more "prewritten computer
software"
programs
or prewritten portions thereof does not cause the combination to be other than
"prewritten
computer software." "Prewritten computer software" includes
software designed and
developed
by the author or other creator to the specifications of a specific purchaser
when it is
sold to
a person other than the specific purchaser. Where a person modifies or enhances
"computer
software" of which the person is not the author or creator, the person
shall be deemed
to be
the author or creator only of such person's modifications or enhancements.
"Prewritten
computer
software" or a prewritten portion thereof that is modified or enhanced to
any degree,
where
such modification or enhancement is designed and developed to the
specifications of a
specific
purchaser, remains "prewritten computer software;" provided, however,
that where there
is a
reasonable, separately stated charge or an invoice or other statement of the
price given to the
purchaser
for such modification or enhancement, such modification or enhancement shall
not
constitute
"prewritten computer software."
(h) Drugs and Related Items
(i) "Drug" means a compound, substance or preparation, and any
component of a
compound,
substance or preparation, other than "food and food ingredients,"
"dietary
supplements"
or "alcoholic beverages:"
(A) Recognized in the official United States Pharmacopoeia, official
Homeopathic
Pharmacopoeia
of the United States, or official National Formulary, and supplement to any of
them; or
(B) Intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of
disease;
or
(C) Intended to affect the structure of or any function of the
body.
"Drug" shall also include blood, insulin and medical oxygen
whether or not sold on
prescription.
(ii) "Over-the-counter-drug" means a drug that contains a label that
identifies the product
as a
drug as required by 21 C.F.R. section 201.66. The
"over-the-counter-drug" label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a list of those
ingredients contained in
the
compound, substance or preparation.
"Over-the-counter-drug" shall not include "grooming and hygiene
products."
(iii) "Grooming and hygiene products" are soaps and cleaning
solutions, shampoo,
toothpaste,
mouthwash, antiperspirants, and suntan lotions and screens, regardless of
whether the
items
meet the definition of "over-the-counter-drugs."
(iv) "Prescription" means an order, formula or recipe issued in any
form of oral, written,
electronic,
or other means of transmission by a duly licensed practitioner authorized by
the laws
of the
member state.
(i) "Delivery charges" means charges by the seller of personal
property or services for
preparation
and delivery to a location designated by the purchaser of personal property or
services
including,
but not limited to, transportation, shipping, postage, handling, crating, and
packing.
"Delivery charges" shall not include the charges for delivery of
"direct mail" if the
charges
are separately stated on an invoice or similar billing document given to the
purchaser.
(j) "Direct mail" means printed material delivered or distributed by
United States mail or
other
delivery service to a mass audience or to addressees on a mailing list provided
by the
purchaser
or at the direction of the purchaser when the cost of the items are not billed
directly to
the
recipients. "Direct mail" includes tangible personal property
supplied directly or indirectly by
the
purchaser to the direct mail seller for inclusion in the package containing the
printed material.
"Direct
mail" does not include multiple items of printed material delivered to a
single address.
(k) "Durable medical equipment" means equipment including repair and
replacement
parts
for same which:
(i) Can withstand repeated use; and
(ii) Is primarily and customarily used to serve a medical purpose; and
(iii) Generally is not useful to a person in the absence of illness or injury;
and
(iv) Is not worn in or on the body.
Durable medical equipment does not include mobility enhancing equipment.
(l) Food and Related Items
(i) "Food and food ingredients" means substances, whether in liquid,
concentrated, solid,
frozen,
dried, or dehydrated form, that are sold for ingestion or chewing by humans and
are
consumed
for their taste or nutritional value. "Food and food ingredients"
does not include
"alcoholic
beverages," "tobacco," "candy," "dietary
supplements" and "soft drinks."
(ii) "Prepared food" means:
(A) Food sold in a heated state or heated by the seller;
(B) Two (2) or more food ingredients mixed or combined by the seller for sale
as a
single
item; or
(C) Food sold with eating utensils provided by the seller, including plates,
knives, forks,
spoons,
glasses, cups, napkins, or straws. A plate does not include a container or
packaging used
to
transport the food.
"Prepared food" in (B) does not include food that is only cut,
repackaged, or pasteurized
by the
seller, and eggs, fish, meat, poultry, and foods containing these raw animal
foods requiring
cooking
by the consumer as recommended by the Food and Drug Administration in chapter
3,
part
401.11 of its Food Code so as to prevent food borne illnesses.
(iii) "Candy" means a preparation of sugar, honey, or other natural
or artificial
sweeteners
in combination with chocolate, fruits, nuts or other ingredients or flavorings
in the
form of
bars, drops, or pieces. "Candy" shall not include any preparation
containing flour and
shall
require no refrigeration.
(iv) "Soft drinks" means non-alcoholic beverages that contain natural
or artificial
sweeteners.
"Soft drinks" do not include beverages that contain milk or milk
products, soy, rice
or
similar milk substitutes, or greater than fifty percent (50%) of vegetable or
fruit juice by
volume.
(v) "Dietary supplement" means any product, other than
"tobacco," intended to
supplement
the diet that:
(A) Contains one or more of the following dietary ingredients:
1. A vitamin;
2. A mineral;
3. An herb or other botanical;
4. An amino acid;
5. A dietary substance for use by humans to supplement the diet by increasing
the total
dietary
intake; or
6. A concentrate, metabolite, constituent, extract, or combination of any
ingredient
described
in above; and
(B) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or
liquid form, or
if not
intended for ingestion in such a form, is not represented as conventional food
and is not
represented
for use as a sole item of a meal or of the diet; and
(C) Is required to be labeled as a dietary supplement, identifiable by the
"Supplemental
Facts"
box found on the label and as required pursuant to 21 C.F.R. section 101.36.
(m) "Food sold through vending machines" means food dispensed from a
machine or
other
mechanical device that accepts payment.
(n) "Hotel" means every building or other structure kept, used,
maintained, advertised as
or held
out to the public to be a place where living quarters are supplied for pay to
transient or
permanent
guests and tenants and includes a motel.
(i) "Living quarters" means sleeping rooms, sleeping or housekeeping
accommodations,
or any
other room or accommodation in any part of the hotel, rooming house or tourist
camp
which is
available for or rented out for hire in the lodging of guests.
(ii) "Rooming house" means every house, boat, vehicle, motor court or
other structure
kept,
used, maintained, advertised or held out to the public to be a place where
living quarters are
supplied
for pay to transient or permanent guests or tenants, whether in one or
adjoining
buildings.
(iii) "Tourist camp" means a place where tents or tent houses, or
camp cottages, or
cabins
or other structures are located and offered to the public or any segment
thereof for human
habitation.
(o) "Lease or rental" means any transfer of possession or control of
tangible personal
property
for a fixed or indeterminate term for consideration. A lease or rental may
include future
options
to purchase or extend. Lease or rental does not include:
(i) A transfer of possession or control of property under a security agreement
or deferred
payment
plan that requires the transfer of title upon completion of the required
payments;
(ii) A transfer or possession or control of property under an agreement that
requires the
transfer
of title upon completion of required payments and payment of an option price
does not
exceed
the greater of one hundred dollars ($100) or one percent of the total required
payments; or
(iii) Providing tangible personal property along with an operator for a fixed
or
indeterminate
period of time. A condition of this exclusion is that the operator is necessary
for
the
equipment to perform as designed. For the purpose of this subsection, an
operator must do
more
than maintain, inspect, or set-up the tangible personal property.
(iv) Lease or rental does include agreements covering motor vehicles and
trailers where
the
amount of consideration may be increased or decreased by reference to the
amount realized
upon
sale or disposition of the property as defined in 26 U.S.C. section 7701(h)(1).
(v) This definition shall be used for sales and use tax purposes regardless if
a transaction
is
characterized as a lease or rental under generally accepted accounting
principles, the Internal
Revenue
Code, the Uniform Commercial Code, or other provisions of federal, state or
local law.
(vi) This definition will be applied only prospectively from the date of
adoption and will
have no
retroactive impact on existing leases or rentals. This definition shall neither
impact any
existing
sale-leaseback exemption or exclusions that a state may have, nor preclude a
state from
adopting
a sale-leaseback exemption or exclusion after the effective date of the
Agreement.
(p) "Mobility enhancing equipment" means equipment including repair
and replacement
parts to
same, which:
(i) Is primarily and customarily used to provide or increase the ability to
move from one
place to
another and which is appropriate for use either in a home or a motor vehicle;
and
(ii) Is not generally used by persons with normal mobility; and
(iii) Does not include any motor vehicle or equipment on a motor vehicle
normally
provided
by a motor vehicle manufacturer.
Mobility enhancing equipment does not include durable medical equipment.
(q) "Model 1 Seller" means a seller that has selected a CSP as its
agent to perform all the
seller's
sales and use tax functions, other than the seller's obligation to remit tax on
its own
purchases.
(r) "Model 2 Seller" means a seller that has selected a CAS to perform
part of its sales
and use
tax functions, but retains responsibility for remitting the tax.
(s) "Model 3 Seller" means a seller that has sales in at least five
member states, has total
annual
sales revenue of at least five hundred million dollars ($500,000,000), has a
proprietary
system
that calculates the amount of tax due each jurisdiction, and has entered into a
performance
agreement
with the member states that establishes a tax performance standard for the
seller. As
used in
this definition, a seller includes an affiliated group of sellers using the
same proprietary
system.
(t) "Prosthetic device" means a replacement, corrective, or
supportive devices including
repair
and replacement parts for same worn on or in the body to:
(i) Artificially replace a missing portion of the body;
(ii) Prevent or correct physical deformity or malfunction; or
(iii) Support a weak or deformed portion of the body.
(u) "Purchaser" means a person to whom a sale of personal property is
made or to whom
a
service is furnished.
(v) "Purchase price" applies to the measure subject to use tax and
has the same meaning
as sales
price.
(w) "Seller" means a person making sales, leases, or rentals of
personal property or
services.
(x) "State" means any state of the United States and the District of
Columbia.
(y) "Telecommunications" tax base/exemption terms
(i) Telecommunication terms shall be defined as follows:
(A) "Ancillary services" means services that are associated with or
incidental to the
provision
of "telecommunications services", including, but not limited to,
"detailed
telecommunications
billing", "directory assistance", "vertical service",
and "voice mail services".
(B) "Conference bridging service" means an "ancillary
service" that links two (2) or
more
participants of an audio or video conference call and may include the provision
of a
telephone
number. "Conference bridging service" does not include the
"telecommunications
services"
used to reach the conference bridge.
(C) "Detailed telecommunications billing service" means an
"ancillary service" of
separately
stating information pertaining to individual calls on a customer's billing
statement.
(D) "Directory assistance" means an "ancillary service" of
providing telephone number
information,
and/or address information.
(E) "Vertical service" means an "ancillary service" that is
offered in connection with one
or more
"telecommunications services", which offers advanced calling features
that allow
customers
to identify callers and to manage multiple calls and call connections,
including
"conference
bridging services".
(F) "Voice mail service" means an "ancillary service" that
enables the customer to store,
send or
receive recorded messages. "Voice mail service" does not include any
"vertical services"
that the
customer may be required to have in order to utilize the "voice mail
service".
(G) "Telecommunications service" means the electronic transmission,
conveyance, or
routing
of voice, data, audio, video, or any other information or signals to a point,
or between or
among
points. The term "telecommunications service" includes such
transmission, conveyance,
or
routing in which computer processing applications are used to act on the form,
code or
protocol
of the content for purposes of transmission, conveyance or routing without
regard to
whether
such service is referred to as voice over Internet protocol services or is
classified by the
Federal
Communications Commission as enhanced or value added. "Telecommunications
service"
does not include:
(1) Data processing and information services that allow data to be generated,
acquired,
stored,
processed, or retrieved and delivered by an electronic transmission to a
purchaser where
such
purchaser's primary purpose for the underlying transaction is the processed
data or
information;
(2) Installation or maintenance of wiring or equipment on a customer's
premises;
(3) Tangible personal property;
(4) Advertising, including, but not limited to, directory advertising.
(5) Billing and collection services provided to third parties;
(6) Internet access service;
(7) Radio and television audio and video programming services, regardless of
the
medium,
including the furnishing of transmission, conveyance and routing of such
services by the
programming
service provider. Radio and television audio and video programming services
shall
include,
but not be limited to, cable service as defined in 47 U.S.C. section 522(6) and
audio and
video
programming services delivered by commercial mobile radio service providers, as
defined
in 47
CFR 20.3;
(8) "Ancillary services"; or
(9) Digital products "delivered electronically", including, but not
limited to, software,
music,
video, reading materials or ring tones.
(H) "800 service" means a "telecommunications service" that
allows a caller to dial a
toll-free
number without incurring a charge for the call. The service is typically
marketed under
the name
"800", "855", "866", "877", and
"888" toll-free calling, and any subsequent numbers
designated
by the Federal Communications Commission.
(I) "900 service" means an inbound toll "telecommunications
service" purchased by a
subscriber
that allows the subscriber's customers to call in to the subscriber's
prerecorded
announcement
or live service. "900 service" does not include the charge for:
collection services
provided
by the seller of the "telecommunications services" to the subscriber,
or service or
product
sold by the subscriber to the subscriber's customer. The service is typically
marketed
under
the name "900 service," and any subsequent numbers designated by the
Federal
Communications
Commission.
(J) "Fixed wireless service" means a "telecommunications
service" that provides radio
communication
between fixed points.
(K) "Mobile wireless service" means a "telecommunications
service" that is transmitted,
conveyed
or routed regardless of the technology used, whereby the origination and/or
termination
points
of the transmission, conveyance or routing are not fixed, including, by way of
example
only,
"telecommunications services" that are provided by a commercial
mobile radio service
provider.
(L) "Paging service" means a "telecommunications service"
that provides transmission of
coded
radio signals for the purpose of activating specific pagers; such transmissions
may include
messages
and/or sounds.
(M) "Prepaid calling service" means the right to access exclusively
"telecommunications
services",
which must be paid for in advance and which enables the origination of calls
using an
access
number of or authorization code, whether manually or
electronically dialed, and that is
sold in
predetermined units or dollars of which the number declines with use in a known
amount.
(N) "Prepaid wireless calling service" means a
"telecommunications service" that
provides
the right to utilize "mobile wireless service" as well as other
non-telecommunications
services
including the download of digital products "delivered
electronically", content and
"ancillary
services" which must be paid for in advance that is sold in predetermined
units of
dollars
of which the number declines with use in a known amount.
(O) "Private communications service" means a telecommunications
service that entitles
the
customer to exclusive or priority use of a communications channel or group of
channels
between
or among termination points, regardless of the manner in which such channel or
channels
are connected, and includes switching capacity, extension lines, stations, and
any other
associated
services that are provided in connection with the use of such channel or
channels.
(P) "Value-added non-voice data service" means a service that
otherwise meets the
definition
of "telecommunications services" in which computer processing
applications are used
to act
on the form, content, code, or protocol of the information or data primarily
for a purpose
other
than transmission, conveyance or routing.
(ii) "Modifiers of Sales Tax Base/Exemption Terms" -- the following
terms can be used
to
further delineate the type of "telecommunications service" to be
taxed or exempted. The terms
would be
used with the broader terms and subcategories delineated above.
(A) "Coin-operated telephone service" means a
"telecommunications service" paid for by
inserting
money into a telephone accepting direct deposits of money to operate.
(B) "International" means a "telecommunications service"
that originates or terminates in
the
United States and terminates or originates outside the United States,
respectively. United
States
includes the District of Columbia or a U.S. territory or possession.
(C) "Interstate" means a "telecommunications service" that
originates in one United
States
state, or a United States territory or possession, and terminates in a
different United States
state or
a United States territory or possession.
(D) "Intrastate" means a "telecommunications service" that
originates in one United
States
state or a United States territory or possession, and terminates in the same
United States
state or
a United States territory or possession.
(E) "Pay telephone service" means a "telecommunications
service" provided through any
pay
telephone.
(F) "Residential telecommunications service" means a
"telecommunications service" or
"ancillary
services" provided to an individual for personal use at a residential
address, including
an
individual dwelling unit such as an apartment. In the case of institutions
where individuals
reside,
such as schools or nursing homes, "telecommunications service" is
considered residential
if it is
provided to and paid for by an individual resident rather than the institution.
The terms "ancillary services" and "telecommunications
service" are defined as a broad
range of
services. The terms "ancillary services" and "telecommunications
service" are broader
than the
sum of the subcategories. Definitions of subcategories of "ancillary
services" and
"telecommunications
service" can be used by a member state alone or in combination with other
subcategories
to define a narrower tax base than the definitions of "ancillary
services" and
"telecommunications
service" would imply. The subcategories can also be used by a member
state to
provide exemptions for certain subcategories of the more broadly defined terms.
A member state that specifically imposes tax on, or exempts from tax, local
telephone or
local
telecommunications service may define "local service" in any manner
in accordance with
section
44-18.1-28, except as limited by other sections of this Agreement.
(z) "Tobacco" means cigarettes, cigars, chewing or pipe tobacco, or
any other item that
contains
tobacco.
44-18-8.
Retail sale or sale at retail defined. – [Effective January 1, 2007.] --
A
"retail
sale" or "sale at retail" means any sale, lease or rentals of
tangible personal property, for
any
purpose other than resale, sublease or subrent in the regular course of
business. The sale of
tangible
personal property to be used for purposes of rental in the regular course of
business is
considered
to be a sale for resale. In regard to telecommunications service as defined in
section
44-18-7(9),
retail sale does not include the purchase of telecommunications service by a
telecommunications
provider from another telecommunication provider for resale to the ultimate
consumer;
provided, that the purchaser submits to the seller a certificate attesting to
the
applicability
of this exclusion, upon receipt of which the seller is relieved of any tax
liability for
the
sale.
(b) The delivery in this state of tangible personal property by an owner or
former owner
or by
a factor, if the delivery is to a consumer pursuant to a retail sale made by a
retailer not
engaged
in business in this state, is a retail sale in this state by the person making
the delivery and
he or
she shall include the retail selling price of the property in his or her gross
receipts.
44-18-30.
Gross receipts exempt from sales and use taxes. [Effective January 1,
2007.]
-- 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) Non-returnable 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 "non-
returnable
containers."
(5) (i) Charitable, educational, and religious organizations. - 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 where it is located.
(9) Food and food ingredients. - From the sale and storage, use, or other
consumption in
this
state of food and food ingredients as defined in section 44-18-7.1(l).
For the purposes of this exemption "food and food ingredients" shall
not include candy,
soft
drinks, dietary supplements, alcoholic beverages, tobacco, food sold through
vending
machines
or prepared food (as those terms are defined in section 44-18-7.1, unless the
prepared
food is:
(i) Sold by a seller whose primary NAICS classification is manufacturing in
sector 311,
except
sub-sector 3118 (bakeries);
(ii) Sold in an unheated state by weight or volume as a single item;
(iii) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants,
pastries,
donuts,
danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and
is not sold with utensils provided by the seller, including plates, knives,
forks, spoons,
glasses,
cups, napkins, or straws.
(10) Medicines, drugs and durable medical equipment. - From the sale and from
the
storage,
use, or other consumption in this state, of;
(i) "Drugs" as defined in section 44-18-7.1(h)(i), sold on
prescriptions, blood, medical
oxygen,
and insulin whether or not sold on prescription, and over-the-counter drugs as
defined in
section
44-18-7.1(h)(ii). For purposes of this exemption over-the-counter drugs shall
not include
grooming
and hygiene products as defined in section 44-18-7.1(h)(iii).
(ii) Durable medical equipment as defined in section 44-18-7.1(k) for home use
only,
including,
but not limited to, syringe infusers, ambulatory drug delivery pumps, hospital
beds,
convalescent
chairs, and chair lifts. Supplies used in connection with syringe infusers and
ambulatory
drug delivery pumps 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 shall also be exempt from tax.
(11) Prosthetic devices and mobility enhancing equipment. - From the sale and
from the
storage,
use, or other consumption in this state, of prosthetic devices as defined in
section 44-18-
7.1(t),
sold on prescription, including but not limited to, artificial limbs, dentures,
spectacles and
eyeglasses,
and artificial eyes; artificial hearing devices and hearing aids, whether or
not sold on
prescription
and mobility enhancing equipment as defined in section 44-18-7.1(p) including
wheelchairs,
crutches and canes.
(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.
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.
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. 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, "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) 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.
(26) 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.
(27) 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 clothing accessories or equipment or special
clothing or
footwear
primarily designed for athletic activity or protective use as these terms are
defined in
section
44-18-7.1(f).
(28) 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.
(29) 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 nonprofit religious organization including,
but not
limited
to, the Old Testament and the New Testament versions.
(30) 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.
(31) 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.
(32) 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 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.
(33) Compressed air. - From the sale and from the storage, use, or other
consumption in
the
state of compressed air.
(34) Flags. - From the sale and from the storage, consumption, or other use in
this state
of
United States, Rhode Island or POW-MIA flags.
(35) 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.
(36) 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) of this section and
as well
as any educational institution within the purview of section 16-63-9(4) and
used textbooks
by any
purveyor.
(37) 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) of this section) 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.
(38) 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.
(39) 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.
(40) 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.
(41) 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.
(42) 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.
(43) Coins. - From the sale and from the other consumption in this state of
coins having
numismatic
or investment value.
(44) 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.
(45) 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.
(46) 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.
(47) 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.
(48) 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. 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.
(49) 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, 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., 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.
(50) 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.
(51) 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.
"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 costs of the reconstruction materials are
reimbursed by
insurance,
this exemption does not apply.
(52) 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.
(53) 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.
(54) Non-motorized recreational vehicles sold to nonresidents.
(i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational
vehicle to
a bona
fide nonresident of this state who does not register the non-motorized
recreational vehicle
in this
state, whether the sale or delivery of the non-motorized recreational vehicle
is made in this
state or
at the place of residence of the nonresident; provided, that a non-motorized
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
non-motorized 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, that when a Rhode Island licensed non-motorized
recreational vehicle
dealer
is required to add and collect the sales and use tax on the sale of a
non-motorized
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 non-motorized 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
non-motorized
recreational
vehicle dealer that the purchaser of the non-motorized recreational vehicle was
the
holder
of, and had in his or her possession a valid out-of-state non-motorized
recreational vehicle
registration
or a valid out-of-state driver's license.
(iii) Any nonresident who registers a non-motorized 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 non-
motorized
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) "Non-motorized 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.
(55) 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 of those systems, that are required
in
buildings
and occupancies existing therein 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 to that Act. The exemption provided in this subdivision shall
expire
on
December 31, 2008.
(56) Aircraft. - Notwithstanding the provisions of this chapter, the tax
imposed by
sections
44-18-18 and 44-18-20 shall not apply with respect to the sale and to the
storage, use, or
other
consumption in this state of any new or used aircraft or aircraft parts.
(57) Renewable energy products. - Notwithstanding any other provisions of Rhode
Island
general laws the following products shall also be exempt from sales tax: solar
photovoltaic
modules
or panels, or any module or panel that generates electricity from light; solar
thermal
collectors,
including, but not limited to, those manufactured with flat glass plates,
extruded
plastic,
sheet metal, and/or evacuated tubes; geothermal heat pumps, including both
water-to-
water
and water-to-air type pumps; wind turbines; towers used to mount wind turbines
if
specified
by or sold by a wind turbine manufacturer; DC to AC inverters that interconnect
with
utility
power lines; manufactured mounting racks and ballast pans for solar collector,
module or
panel installation.
Not to include materials that could be fabricated into such racks; monitoring
and
control equipment, if specified or supplied by a manufacturer of solar thermal,
solar
photovoltaic,
geothermal, or wind energy systems or if required by law or regulation for such
systems
but not to include pumps, fans or plumbing or electrical fixtures unless
shipped from the
manufacturer
affixed to, or an integral part of, another item specified on this list; and
solar storage
tanks
that are part of a solar domestic hot water system or a solar space heating
system. If the tank
comes
with an external heat exchanger it shall also be tax exempt, but a standard hot
water tank is
not
exempt from state sales tax.
(58) Returned property. - The amount charged for property returned by customers
upon
rescission
of the contract of sale when the entire amount exclusive of handling charges
paid for
the
property is refunded in either cash or credit, and where the property is
returned within one
hundred
twenty (120) days from the date of delivery.
(59) Dietary Supplements. - From the sale and from the storage, use or other
consumption
of dietary supplements as defined in section 44-18-7.1(l)(v), sold on
prescriptions.
(60)
Blood. - From the sale and from the storage, use or other consumption of human
blood.
(61)
Prewritten computer software delivered electronically. - From the sale and from
the
storage,
use or other consumption of prewritten computer software delivered
electronically or by
load
and leave.
SECTION
5. Section 44-18.1-13 of the General Laws in Chapter 44-18.1 entitled
"Adoption
of the Streamlined Sales and Use Tax Agreement" is hereby repealed.
44-18.1-13.
Multiple points of use. [Effective January 1, 2007.] -- (A) Notwithstanding
the
provisions of section 44-18.1-11, a business purchaser that is not a holder of
a direct pay
permit
that knows at the time of its purchase of a digital good, computer software, or
a service
that the
digital good, computer software, or service will be concurrently available for
use in more
than
one jurisdiction shall deliver to the seller in conjunction with its purchase
an exemption
certificate
claiming multiple points of use or meet the requirements of section 44-18.1-13,
subsections
(B) or (C). Computer software, for purposes of this section includes, but is
not limited
to
computer software delivered electronically, by load and leave, or in tangible
form. Computer
software
received in-person by a business purchaser at a business location of the seller
is not
included.
Upon receipt of an exemption certificate claiming multiple points of use, the
seller is
relieved
of all obligation to collect, pay, or remit the applicable tax and the purchaser
shall be
obligated
to collect, pay, or remit the applicable tax on a direct pay basis.
(2) A purchaser delivering an exemption certificate claiming multiple points of
use may
use
any reasonable, but consistent and uniform, method of apportionment that is
supported by the
purchaser's
books and records as they exist at the time the transaction is reported for
sales or use
tax
purposes.
(3) A purchaser delivering an exemption certificate claiming multiple points of
use shall
report
and pay the appropriate tax to each jurisdiction where concurrent use occurs.
The tax due
will
be calculated as if the apportioned amount of the digital good, computer
software or service
had
been delivered to each jurisdiction to which the sale is apportioned pursuant
to section 44-
18.1-13,
subdivision (A)(2).
(4) The exemption certificate claiming multiple points of use will remain in
effect for all
future
sales by the seller to the purchaser (except as to the subsequent sale's
specific
apportionment
that is governed by the principles of section 44-18.1-13, subdivisions (A)(2)
and
(A)(3))
until it is revoked in writing.
(B) Notwithstanding section 44-18.1-13, subsection (A), when the seller knows
that the
product
will be concurrently available for use in more than one jurisdiction, but the
purchaser
does
not provide an exemption certificate claiming multiple points of use as
required in
subsection
(A), the seller may work with the purchaser to produce the correct
apportionment. The
purchaser
and seller may use any reasonable, but consistent and uniform, method of
apportionment
that is supported by the seller's and purchaser's business records as they
exist at the
time
the transaction is reported for sales or use tax purposes. If the purchaser
certifies to the
accuracy
of the apportionment and the seller accepts the certification, the seller shall
collect and
remit
the tax pursuant to section 44-18.1-13, subdivision (A)(3). In the absence of
bad faith, the
seller
is relieved of any further obligation to collect tax on any transaction where
the seller has
collected
tax pursuant to the information certified by the purchaser.
(C) When the seller knows that the product will be concurrently available for
use in more
than
one jurisdiction and the purchaser does not have a direct pay permit and does
not provide the
seller
with an exemption certificate claiming multiple points of use exemption as
required in
section
44-18.1-13, subsection (A), or certification pursuant to section 44-18.1-13,
subsection
(B),
the seller shall collect and remit the tax based on the provisions of section
44-18.1-11.
(D) A holder of a direct pay permit shall not be required to deliver an
exemption
certificate
claiming multiple points of use to the seller. A direct pay permit holder shall
follow the
provisions
of section 44-18.1-13, subdivisions (A)(2) and (A)(3) of this section in
apportioning
the
tax due on a digital good, computer software, or a service that will be
concurrently available
for
use in more than one jurisdiction.
(E) Nothing in this section shall limit a person's obligation for sales or use
tax to any
state
in which the qualifying purchases are concurrently available for use, nor limit
a person's
ability
under local, state, federal, or constitutional law, to claim a credit for sales
or use taxes
legally
due and paid to other jurisdictions.
SECTION
6. Sections 44-18.1-11, 44-18.1-18 and 44-18.1-22 of the General Laws in
Chapter
44-18.1 entitled "Adoption of the Streamlined Sales and Use Tax
Agreement" are hereby
amended
to read as follows:
44-18.1-11.
General sourcing rules. [Effective January 1, 2007.] -- (A) The retail
sale,
excluding
lease or rental, of a product shall be sourced as follows:
(1) When the product is received by the purchaser at a business location of the
seller, the
sale is
sourced to that business location.
(2) When the product is not received by the purchaser at a business location of
the seller,
the sale
is sourced to the location where receipt by the purchaser (or the purchaser's
donee,
designated
as such by the purchaser) occurs, including the location indicated by
instructions for
delivery
to the purchaser (or donee), known to the seller.
(3) When subsections (A)(1) and (A)(2) do not apply, the sale is sourced to the
location
indicated
by an address for the purchaser that is available from the business records of
the seller
that are
maintained in the ordinary course of the seller's business when use of this
address does
not
constitute bad faith.
(4) When subsections (A)(1), (A)(2) and (A)(3) do not apply, the sale is
sourced to the
location
indicated by an address for the purchaser obtained during the consummation of
the sale,
including
the address of a purchaser's payment instrument, if no other address is
available, when
use of
this address does not constitute bad faith.
(5) When none of the previous rules of subsections (A)(1), (A)(2), (A)(3), or
(A)(4)
apply,
including the circumstance in which the seller is without sufficient
information to apply
the
previous rules, then the location will be determined by the address from which
tangible
personal
property was shipped, from which the digital good or the computer software
delivered
electronically
was first available for transmission by the seller, or from which the service
was
provided
(disregarding for these purposes any location that merely provided the digital
transfer of
the
product sold).
(B) The lease or rental of tangible personal property, other than property
identified in
subsection
(C) or subsection (D), shall be sourced as follows:
(1) For a lease or rental that requires recurring periodic payments, the first
periodic
payment
is sourced the same as a retail sale in accordance with the provisions of
subsection (A).
Periodic
payments made subsequent to the first payment are sourced to the primary property
location
for each period covered by the payment. The primary property location shall be
as
indicated
by an address for the property provided by the lessee that is available to the
lessor from
its
records maintained in the ordinary course of business, when use of this address
does not
constitute
bad faith. The property location shall not be altered by intermittent use at
different
locations,
such as use of business property that accompanies employees on business trips
and
service
calls.
(2) For a lease or rental that does not require recurring periodic payments,
the payment is
sourced
the same as a retail sale in accordance with the provisions of subsection (A).
(3) This subsection does not affect the imposition or computation of sales or
use tax on
leases
or rentals based on a lump sum or accelerated basis, or on the acquisition of
property for
lease.
(C) The lease or rental of motor vehicles, trailers, semi-trailers, or aircraft
that do not
qualify
as transportation equipment, as defined in subsection (D), shall be sourced as
follows:
(1) For a lease or rental that requires recurring periodic payments, each
periodic payment
is
sourced to the primary property location. The property location shall be as
indicated by an
address
for the property provided by the lessee that is available to the lessor from
its records
maintained
in the ordinary course of business, when use of this address does not
constitute bad
faith.
This location shall not be altered by intermittent use at different locations.
(2) For a lease or rental that does not require recurring periodic payments,
the payment is
sourced
the same as a retail sale in accordance with the provisions of subsection (A).
(3) This subsection does not affect the imposition or computation of sales or
use tax on
leases
or rentals based on a lump sum or accelerated basis, or on the acquisition of
property for
lease.
(D) The retail sale, including lease or rental, of transportation equipment
shall be sourced
the same
as a retail sale in accordance with the provisions of subsection (A),
notwithstanding the
exclusion
of lease or rental in subsection (A). "Transportation equipment"
means any of the
following:
(1) Locomotives and railcars that are utilized for the carriage of persons or
property in
interstate
commerce.
(2) Trucks and truck-tractors with a Gross Vehicle Weight rating (GVWR) or
of 10,001
pounds
or greater, trailers, semi-trailers, or passenger buses that are:
(a) Registered through the International Registration Plan; and
(b) Operated under authority of a carrier authorized and certificated by the
U.S.
Department
of Transportation or another federal authority to engage in the carriage of
persons or
property
in interstate commerce.
(3) Aircraft that are operated by air carriers authorized and certificated by
the U.S.
Department
of Transportation or another federal or a foreign authority to engage in the
carriage of
persons
or property in interstate or foreign commerce.
(4) Containers designed for use on and component parts attached or secured on
the items
set
forth in subsection (D)(1) -- (D)(3).
44-18.1-18.
Administration of exemptions. [Effective January 1, 2007.] -- (A) Each
member
state shall observe the following provisions when a purchaser claims an
exemption:
(1) The seller shall obtain identifying information of the purchaser and the
reason for
claiming
a tax exemption at the time of the purchase as determined by the governing
board.
(2) A purchaser is not required to provide a signature to claim an exemption
from tax
unless a
paper exemption certificate is used.
(3) The seller shall use the standard form for claiming an exemption
electronically as
adopted
by the governing board.
(4) The seller shall obtain the same information for proof of a claimed
exemption
regardless
of the medium in which the transaction occurred.
(5) A member state may utilize a system wherein the purchaser exempt from the
payment
of the tax is issued an identification number that shall be presented to the
seller at the
time of
the sale.
(6) The seller shall maintain proper records of exempt transactions and provide
them to a
member
state when requested.
(7) A member state shall administer use-based and entity-based exemptions when
practicable
through a direct pay permit, an exemption certificate, or other means that does
not
burden
sellers.
(8) After December 31, 2007, in the case of drop shipment sales, member states
must
allow a
third party vendor (e.g., drop shipper) to claim a resale exemption based on an
exemption
certificate
provided by its customer/re-seller or any other acceptable information
available to the
third
party vendor evidencing qualification for a resale exemption, regardless of
whether the
customer/re-seller
is registered to collect and remit sales and use tax in the state where the
sale is
sourced.
(B) Each member state shall relieve sellers that follow the requirements of
this section
from the
tax otherwise applicable if it is determined that the purchaser improperly
claimed an
exemption
and to hold the purchaser liable for the nonpayment of tax. This relief from
liability
does not
apply to a seller who fraudulently fails to collect the tax; to a seller who
solicits
purchasers
to participate in the unlawful claim of an exemption; to a seller who accepts
an
exemption
certificate when the purchaser claims an entity-based exemption when (1) the
subject
of the
transactions sought to be covered by the exemption certificate is actually
received by the
purchaser
at a location operated by the seller and (2) the state in which that location
resides
provides
an exemption certificate that clearly and affirmatively indicates (graying out
exemption
reason
types on the uniform form and posting it on a state's web site is an indicator)
that the
claimed
exemption is not available in that state; or to a seller who accepts an
exemption
certificate
claiming multiple points of use for tangible personal property other than
computer
software
for which an exemption claiming multiple points of use is acceptable under
section 44-
18.1-13.
(C) Each state shall relieve a seller of the tax otherwise applicable if the
seller obtains a
fully completed
exemption certificate or captures the relevant data elements required under the
Agreement
within 90 days subsequent to the date of sale.
(1) If the seller has not obtained an exemption certificate or all relevant
data elements as
provided
in section 44-18.1-18, subsection (C) the seller may, within 120 days
subsequent to a
request
for substantiation by a member state, either prove that the transaction was not
subject to
tax by
other means or obtain a fully completed exemption certificate from the
purchaser, taken in
good
faith. For purposes of this section, member states may continue to apply their
own standards
of good
faith until such time as a uniform standard for good faith is defined in the
Agreement.
(2) Nothing in this section shall affect the ability of member states to
require purchasers
to
update exemption certificate information or to reapply with the state to claim
certain
exemptions.
(3) Notwithstanding the aforementioned, each member state shall relieve a seller
of the
tax
otherwise applicable if it obtains a blanket exemption certificate for a
purchaser with which
the
seller has a recurring business relationship. States may not request from the
seller renewal of
blanket
certificates or updates of exemption certificate information or data elements
when there is
a
recurring business relationship between the buyer and seller. For purposes of
this section a
recurring
business relationship exists when a period of no more than twelve months
elapses
between
sales transactions.
44-18.1-22.
Confidentiality and privacy protections under Model 1. [Effective
January
1, 2007.] -- (A) The purpose of
this section is to set forth the member states' policy for
the protection
of the confidentiality rights of all participants in the system and of the
privacy
interests
of consumers who deal with Model 1 sellers.
(B) As used in this section, the term "confidential taxpayer
information" means all
information
that is protected under a member state's laws, regulations, and privileges; the
term
"personally
identifiable information" means information that identifies a person; and
the term
"anonymous
data" means information that does not identify a person.
(C) The member states agree that a fundamental precept in Model 1 is to
preserve the
privacy
of consumers by protecting their anonymity. With very limited exceptions, a CSP
shall
perform
its tax calculation, remittance, and reporting functions without retaining the
personally
identifiable
information of consumers.
(D) The governing board may certify a CSP only if that CSP certifies that:
(1) Its system has been designed and tested to ensure that the fundamental
precept of
anonymity
is respected;
(2) That personally identifiable information is only used and retained to the
extent
necessary
for the administration of Model 1 with respect to exempt purchasers;
(3) It provides consumers clear and conspicuous notice of its information practices,
including
what information is it collects, how it collects the information,
how it uses the
information,
how long, if at all, it retains the information and whether it discloses the
information
to
member states. Such notice shall be satisfied by a written privacy policy
statement accessible
by the
public on the official web site of the CSP;
(4) Its collection, use and retention of personally identifiable information
will be limited
to that
required by the member states to ensure the validity of exemptions from
taxation that are
claimed
by reason of a consumer's status or the intended use of the goods or services
purchased;
and
(5) It provides adequate technical, physical, and administrative safeguards so
as to
protect
personally identifiable information from unauthorized access and disclosure.
(E) Each member state shall provide public notification to consumers, including
their
exempt
purchasers, of the state's practices relating to the collection, use and
retention of
personally
identifiable information.
(F) When any personally identifiable information that has been collected and
retained is
no
longer required for the purposes set forth in subsection (D)(4), such
information shall no
longer
be retained by the member states.
(G) When personally identifiable information regarding an individual is
retained by or
on
behalf of a member state, such state shall provide reasonable access by such
individual to his
or her
own information in the state's possession and a right to correct any
inaccurately recorded
information.
(H) If anyone other than a member state, or a person authorized by that state's
law or the
Agreement,
seeks to discover personally identifiable information, the state from whom the
information
is sought should make a reasonable and timely effort to notify the individual
of such
request.
(I) This privacy policy is subject to enforcement by member states' attorneys
general or
other
appropriate state government authority.
(J) Each member states' laws and regulations regarding the collection, use, and
maintenance
of confidential taxpayer information remain fully applicable and binding.
Without
limitation,
the Agreement does not enlarge or limit the member states' authority to:
(1) Conduct audits or other review as provided under the Agreement and state
law.
(2) Provide records pursuant to a member state's Freedom of Information Act,
disclosure
laws
with governmental agencies, or other regulations.
(3) Prevent, consistent with state law, disclosures of confidential taxpayer
information.
(4) Prevent, consistent with federal law, disclosures or misuse of federal
return
information
obtained under a disclosure agreement with the Internal Revenue Service.
(5) Collect, disclose, disseminate, or otherwise use anonymous data for
governmental
purposes.
(K) This privacy policy does not preclude the governing board from certifying a
CSP
whose
privacy policy is more protective of confidential taxpayer information or
personally
identifiable
information than is required by the Agreement.
SECTION
7. Section 44-59-4 of the General Laws in Chapter 44-59 entitled "Uniform
Sales
And Use Tax Administration Act" is hereby amended to read as follows:
44-59-4.
Authority to enter agreement. -- The tax administrator shall be
authorized and
directed
to enter into the Streamlined Sales and Use Tax Agreement with one or more
states to
simplify
and modernize sales and use tax administration in order to substantially reduce
the
burden
of tax compliance for all sellers and for all types of commerce. In furtherance
of the
Agreement,
the tax administrator is authorized to act jointly with other states that are
members of
the
Agreement to establish standards for certification of a certified service
provider and certified
automated
system and to establish performance standards for multi-state sellers. The tax
administrator
is further authorized to take other actions reasonably required to implement
the
provisions
set forth in this chapter. Other actions authorized by this section include,
but are not
limited
to, the adoption of rules and regulations and the joint procurement, with other
member
states,
of goods and services in furtherance of the cooperative agreement. The tax
administrator or
the tax
administrator's designee is, the chairperson of the house finance
committee or the
chairperson's
designee(s) and the chairperson of the senate finance committee or the
chairperson's
designee(s)
are authorized to represent this
state before the other states that are signatories to the
Agreement.
SECTION
8. Section 44-59-10 of the General Laws in Chapter 44-59 entitled "Uniform
Sales
And Use Tax Administration Act" is hereby repealed.
44-59-10.
Sunset provision. -- This chapter shall be repealed on June 30,
2007, without
further
action by the general assembly, if the statutory amendments to the sales and
use tax law
necessary
to bring this state into compliance with the Streamlined Sales and Use Tax
Agreement
are
not enacted by the general assembly by January 1, 2007.
SECTION
9. Sections 4, 5 and 6 shall take effect on January 1, 2007 and the remainder
of this
act shall take effect upon passage.
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LC00750/SUB A
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