law18047-04

=======

art.004/7/004/6/004/5/004/4/004/3/004/2/004/1

=======

ARTICLE 4 AS AMENDED

RELATING TO TAXES AND REVENUE

SECTION 1. Sections 42-61-4 and 42-61-15 of the General Laws in Chapter 61 entitled

"State Lottery" are hereby amended to read as follows:

42-61-4. Powers and duties of director.

The director shall have the power and it shall be his or her duty to:

(1) Supervise and administer the operation of lotteries in accordance with this chapter,

chapter 61.2 of this title and with the rules and regulations of the division;

(2) Act as the chief administrative officer having general charge of the office and records

and to employ necessary personnel to serve at his or her pleasure and who shall be in the

unclassified service and whose salaries shall be set by the director of the department of revenue,

pursuant to the provisions of § 42-61-3.;

(3) In accordance with this chapter and the rules and regulations of the division, license as

agents to sell lottery tickets those persons, as in his or her opinion, who will best serve the public

convenience and promote the sale of tickets or shares. The director may require a bond from every

licensed agent, in an amount provided in the rules and regulations of the division. Every licensed

agent shall prominently display his or her license, or a copy of their his or her license, as provided

in the rules and regulations of the committee;

(4) Confer regularly as necessary or desirable, and not less than nine (9) times per year,

with the permanent joint committee on state lottery on the operation and administration of the

lotteries; make available for inspection by the committee, upon request, all books, records, files,

and other information, and documents of the division; advise the committee and recommend those

matters that he or she deems necessary and advisable to improve the operation and administration

of the lotteries;

(5) Suspend or revoke any license issued pursuant to this chapter, chapter 61.2 of this title

or the rules and regulations promulgated under this chapter and chapter 61.2 of this title;

(6) Enter into contracts for the operation of the lotteries, or any part of the operation of the

lotteries, and into contracts for the promotion of the lotteries;

(7) Ensure that monthly financial reports are prepared providing gross monthly revenues,

prize disbursements, other expenses, net income, and the amount transferred to the state general

fund for keno and for all other lottery operations; submit this report to the state budget officer, the

auditor general, the permanent joint committee on state lottery, the legislative fiscal advisors, and

the governor no later than the twentieth business day following the close of the month; the monthly

report shall be prepared in a manner prescribed by the members of the revenues revenue estimating

conference; at the end of each fiscal year the director shall submit an annual report based upon an

accrual system of accounting which that shall include a full and complete statement of lottery

revenues, prize disbursements, and expenses, to the governor and the general assembly, which

report shall be a public document and shall be filed with the secretary of state;

(8) Carry on a continuous study and investigation of the state lotteries throughout the state,

and the operation and administration of similar laws, which may be in effect in other states or

countries; and the director shall continue to exercise his or her authority to study, evaluate, and

where deemed feasible and advisable by the director, implement lottery-related initiatives,

including but not limited to, pilot programs for limited periods of time, with the goal of generating

additional revenues to be transferred by the Lottery lottery to the general fund pursuant to § 42-

61-15(a)(3). Each such initiative shall be objectively evaluated from time to time using measurable

criteria to determine whether the initiative is generating revenue to be transferred by the Lottery

lottery to the general fund. Nothing herein shall be deemed to permit the implementation of an

initiative that would constitute an expansion of gambling requiring voter approval under applicable

Rhode Island law.;

(9) Implement the creation and sale of commercial advertising space on lottery tickets as

authorized by § 42-61-4 of this chapter this section as soon as practicable after June 22, 1994;

(10) Promulgate rules and regulations, which shall include, but not be limited to:

(i) The price of tickets or shares in the lotteries;

(ii) The number and size of the prizes on the winning tickets or shares;

(iii) The manner of selecting the winning tickets or shares;

(iv) The manner of payment of prizes to the holders of winning tickets or shares;

(v) The frequency of the drawings or selections of winning tickets or shares;

(vi) The number and types of location locations at which tickets or shares may be sold;

(vii) The method to be used in selling tickets or shares;

(viii) The licensing of agents to sell tickets or shares, except that a person under the age of

eighteen

(18) shall not be licensed as an agent;

(ix) The license fee to be charged to agents;

(x) The manner in which the proceeds of the sale of lottery tickets or shares are maintained,

reported, and otherwise accounted for;

(xi) The manner and amount of compensation to be paid licensed sales agents necessary to

provide for the adequate availability of tickets or shares to prospective buyers and for the

convenience of the general public;

(xii) The apportionment of the total annual revenue accruing from the sale of lottery tickets

or shares and from all other sources for the payment of prizes to the holders of winning tickets or

shares, for the payment of costs incurred in the operation and administration of the lotteries,

including the expense of the division and the costs resulting from any contract or contracts entered

into for promotional, advertising, consulting, or operational services or for the purchase or lease of

facilities, lottery equipment, and materials, for the repayment of moneys appropriated to the lottery

fund;

(xiii) The superior court upon petition of the director after a hearing may issue subpoenas

to compel the attendance of witnesses and the production of documents, papers, books, records,

and other evidence in any matter over which it has jurisdiction, control, or supervision. If a person

subpoenaed to attend in the proceeding or hearing fails to obey the command of the subpoena

without reasonable cause, or if a person in attendance in the proceeding or hearing refuses without

lawful cause to be examined or to answer a legal or pertinent question or to exhibit any book,

account, record, or other document when ordered to do so by the court, that person may be punished

for contempt of the court;

(xiv) The manner, standards, and specification for the process of competitive bidding for

division purchases and contracts; and

(xv) The sale of commercial advertising space on the reverse side of, or in other available

areas upon, lottery tickets provided that all net revenue derived from the sale of the advertising

space shall be deposited immediately into the state's general fund and shall not be subject to the

provisions of § 42-61-15.

42-61-15. State lottery fund.

(a) There is created the state lottery fund, into which shall be deposited all revenues

received by the division from the sales of lottery tickets and license fees. The fund shall be in the

custody of the general treasurer, subject to the direction of the division for the use of the division,

and money shall be disbursed from it on the order of the controller of the state, pursuant to vouchers

or invoices signed by the director and certified by the director of administration. The moneys in the

state lottery fund shall be allotted in the following order, and only for the following purposes:

(1) Establishing a prize fund from which payments of the prize awards shall be disbursed

to holders of winning lottery tickets on checks signed by the director and countersigned by the

controller of the state or his or her designee.

(i) The amount of payments of prize awards to holders of winning lottery tickets shall be

determined by the division, but shall not be less than forty-five percent (45%) nor more than sixty-

five percent (65%) of the total revenue accruing from the sale of lottery tickets.;

(ii) For the lottery game commonly known as "Keno", the amount of prize awards to

holders of winning Keno tickets shall be determined by the division, but shall not be less than forty-

five percent (45%) nor more than seventy-two percent (72%) of the total revenue accruing from

the sale of Keno tickets.;

(2) Payment of expenses incurred by the division in the operation of the state lotteries

including, but not limited to, costs arising from contracts entered into by the director for

promotional, consulting, or operational services, salaries of professional, technical, and clerical

assistants, and purchases or lease of facilities, lottery equipment, and materials; provided however,

solely for the purpose of determining revenues remaining and available for transfer to the state's

general fund, beginning in fiscal year 2015 expenses incurred by the division in the operation of

state lotteries shall reflect (i) Beginning in fiscal year 2015, the actuarially determined employer

contribution to the Employees' Retirement System consistent with the state's adopted funding

policy; and (ii) Beginning in fiscal year 2018, the actuarially determined employer contribution to

the State Employees and Electing Teachers' OPEB System consistent with the state's adopted

funding policy. For financial reporting purposes, the state lottery fund financial statements shall be

prepared in accordance with generally accepted accounting principles as promulgated by the

Governmental Accounting Standards Board; and

(3) Payment into the general revenue fund of all revenues remaining in the state lottery

fund after the payments specified in subdivisions subsections (a)(1) – (a)(2) of this section.

(b) The auditor general shall conduct an annual post audit of the financial records and

operations of the lottery for the preceding year in accordance with generally accepted auditing

standards and government auditing standards. In connection with the audit, the auditor general may

examine all records, files, and other documents of the division, and any records of lottery sales

agents that pertain to their activities as agents, for purposes of conducting the audit. The auditor

general, in addition to the annual post audit, may require or conduct any other audits or studies he

or she deems appropriate, the costs of which shall be borne by the division.

be made on an estimated quarterly basis. Payment shall be made on the tenth business day following

the close of the quarter except for the fourth quarter when payment shall be on the last business

day.

SECTION 2. Purpose.

(a) Article VI, Section 22 of the Rhode Island Constitution provides that "[n]o act

expanding the types or locations of gambling permitted within the state or within any city or town

. . . shall take effect until it has been approved by the majority of those electors voting in a statewide

referendum and by the majority of those electors voting in said referendum in the municipality in

which the proposed gambling would be allowed . . ."

(b) In the 2012 general election, a majority of Rhode Island voters statewide and in the

Town of Lincoln approved the following referendum question (among others):

"Shall an act be approved which would authorize the facility known as "Twin River" in the

town of Lincoln to add state-operated casino gaming, such as table games, to the types of gambling

it offers?"

in the Town of Tiverton approved the following referendum question (among others):

"Shall an act be approved which would authorize a facility owned by Twin River-Tiverton,

LLC, located in the Town of Tiverton at the intersection of William S. Canning Boulevard and

Stafford Road, to be licensed as a pari-mutuel facility and offer state-operated video-lottery games

and state-operated casino gaming, such as table games?"

(d) In the voter information handbooks setting forth and explaining the question in each

instance, "casino gaming" was defined to include games "within the definition of Class III gaming

as that term is defined in section 2703(8) of Title 25 of the United States Code and which is

approved by the State of Rhode Island through the Lottery Division." "Casino gaming" is also

defined to include games within the definition of class III gaming in section 42-61.2-1 of the general

laws.

(e) Section 2703(8) of Title 25 US Code (part of the Indian Gaming Regulatory Act, or

"IGRA") provides that the term "class III gaming" means "all forms of gaming that are not class I

gaming or class II gaming." The regulations promulgated under IGRA (25 CFR 502.4) expressly

state that Class III gaming includes sports wagering.

(f) Thus, voters state-wide and locally approved state-operated sports wagering to be

offered by the Twin River and Tiverton gaming facilities. Voter approval of sports wagering shall

be implemented by providing an infrastructure for state-operated sports wagering offered by the

Twin River gaming facilities in Lincoln and Tiverton, by authorizing necessary amendments to

certain contracts and by authorizing the division of lotteries to promulgate regulations to direct and

control state-operated sports wagering.

(g) State-operated sports wagering shall be operated by the state through the division of

lotteries. Sports wagering may be conducted at (i) the Twin River Gaming Facility, located in

Lincoln at 100 Twin River Road and owned by UTGR, Inc., a licensed video lottery and table game

retailer, and at (ii) the Tiverton Gaming Facility, located in Tiverton at the intersection of William

S. Canning Boulevard and Stafford Road, and owned by Twin River-Tiverton, once Twin River-

Tiverton is licensed as a video lottery and table game retailer.

(h) The state through the division of lotteries shall exercise its existing authority to

implement, operate, conduct and control sports wagering at the Twin River gaming facility and the

Twin River-Tiverton gaming facility in accordance with the provisions of this chapter and the rules

and regulations of the division of lotteries.

(i) Notwithstanding the provisions of this section, sports wagering shall be prohibited in

connection with any collegiate sports or athletic event that takes place in Rhode Island or a sports

contest or athletic event in which any Rhode Island college team participates, regardless of where

the event takes place.

(j) No other law providing any penalty or disability for conducting, hosting, maintaining,

supporting or participating in sports wagering, or any acts done in connection with sports wagering,

shall apply to the conduct, hosting, maintenance, support or participation in sports wagering

pursuant to this chapter.

SECTION 3. The title of Chapter 42-61.2 of the General Laws entitled "Video-Lottery

Terminal" is hereby amended to read as follows:

CHAPTER 42-61.2

Video-Lottery Terminal

CHAPTER 42-61.2

VIDEO-LOTTERY GAMES, TABLE GAMES AND SPORTS WAGERING

SECTION 4. Section 42-61.2-1, 42-61.2-3.2, 42-61.2-4, 42-61.2-6, 42-61.2-10, 42-61.2-

11, 42-61.2-13, 42-61.2-14 and 42-61.2-15 of the General Laws in Chapter 42-61.2 entitled "Video-

Lottery Terminal" are hereby amended to read as follows:

42-61.2-1. Definitions.

For the purpose of this chapter, the following words shall mean:

(1)(2) "Central communication system" means a system approved by the lottery division,

linking all video-lottery machines at a licensee location to provide auditing program information

and any other information determined by the lottery. In addition, the central communications

system must provide all computer hardware and related software necessary for the establishment

and implementation of a comprehensive system as required by the division. The central

communications licensee may provide a maximum of fifty percent (50%) of the video-lottery

terminals.

(2)(9) "Licensed, video-lottery retailer" means a pari-mutuel licensee specifically licensed

by the director subject to the approval of the division to become a licensed, video-lottery retailer.

(3)(11) "Net terminal income" means currency placed into a video-lottery terminal less

credits redeemed for cash by players.

(4)(15)"Pari-mutuel licensee" means:

(i) An entity licensed pursuant to § 41-3.1-3; and/or

(ii) An entity licensed pursuant to § 41-7-3.

(5)(26) "Technology provider" means any individual, partnership, corporation, or

association that designs, manufactures, installs, maintains, distributes, or supplies video-lottery

machines or associated equipment for the sale or use in this state.

(6)(30) "Video-lottery games" means lottery games played on video-lottery terminals

controlled by the lottery division.

(7)(31) "Video-lottery terminal" means any electronic computerized video game machine

that, upon the insertion of cash or any other representation of value that has been approved by the

division of lotteries, is available to play a video game authorized by the lottery division, and that

uses a video display and microprocessors in which, by chance, the player may receive free games

or credits that can be redeemed for cash. The term does not include a machine that directly dispenses

coins, cash, or tokens.

(8)(1) "Casino gaming" means any and all table and casino-style games played with cards,

dice, or equipment, for money, credit, or any representative of value; including, but not limited to,

roulette, blackjack, big six, craps, poker, baccarat, paigow, any banking or percentage game, or any

other game of device included within the definition of Class III gaming as that term is defined in

Section 2703(8) of Title 25 of the United States Code and that is approved by the state through the

division of state lottery.

(9)(10) "Net, table-game revenue" means win from table games minus counterfeit

currency.

(10)(18) "Rake" means a set fee or percentage of cash and chips representing cash wagered

in the playing of a nonbanking table game assessed by a table games retailer for providing the

services of a dealer, gaming table, or location, to allow the play of any nonbanking table game.

(11)(24) "Table game" or "Table gaming" means that type of casino gaming in which table

games are played for cash or chips representing cash, or any other representation of value that has

been approved by the division of lotteries, using cards, dice, or equipment and conducted by one

or more live persons.

(12)(25) "Table-game retailer" means a retailer authorized to conduct table gaming

pursuant to §§ 42-61.2-2.1 or 42-61.2-2.3.

(13)(4) "Credit facilitator" means any employee of a licensed, video-lottery retailer

approved in writing by the division whose responsibility is to, among other things, review

applications for credit by players, verify information on credit applications, grant, deny, and

suspend credit, establish credit limits, increase and decrease credit limits, and maintain credit files,

all in accordance with this chapter and rules and regulations approved by the division.

(14) (12) "Newport Grand" means Newport Grand, LLC, a Rhode Island limited-liability

company, successor to Newport Grand Jai Alai, LLC, and each permitted successor to and assignee

of Newport Grand, LLC under the Newport Grand Master Contract, including, but not limited to,

Premier Entertainment II, LLC and/or Twin River-Tiverton, LLC, provided it is a pari-mutuel

licensee as defined in § 42-61.2-1 et seq.; provided, further, however, where the context indicates

that the term is referring to the physical facility, then it shall mean the gaming and entertainment

facility located at 150 Admiral Kalbfus Road, Newport, Rhode Island.

(15)(13) "Newport Grand Marketing Year" means each fiscal year of the state or a portion

thereof between November 23, 2010, and the termination date of the Newport Grand Master

Contract.

(16)(14) "Newport Grand Master Contract" means that certain master video-lottery

terminal contract made as of November 23, 2005, by and between the Division division of Lotteries

lotteries of the Rhode Island department of administration and Newport Grand, as amended and

extended from time to time as authorized therein and/or as such Newport Grand Master Contract

may be assigned as permitted therein.

(17) "Premier" means Premier Entertainment II, LLC and/or its successor in interest by

reason of the acquisition of the stock, membership interests, or substantially all of the assets of such

entity.

(18)(29) "Twin River-Tiverton" means Twin River-Tiverton, LLC and/or its successor in

interest by reason of the acquisition of the stock, membership interests, or substantially all of the

assets of such entity.

(19)(22) "Sports-wagering revenue" means:

(1) The total of cash or cash equivalents received from sports wagering minus the total of:

(i) Cash or cash equivalents paid to players as a result of sports wagering;

(ii) The annual flat fee to the host communities as defined by § 42-61.2-2.4(c) of the general

laws;

(iii) Marketing expenses related to sports wagering as agreed to by the division, the sports-

wagering vendor, and the host facilities, as approved by the division of the lottery; and

(iv) Any federal excise taxes (if applicable).

(2) The term does not include any of the following:

(i) Counterfeit cash.

(ii) Coins or currency of other countries received as a result of sports wagering, except to

the extent that the coins or currency are readily convertible to cash.

(iii) Cash taken in a fraudulent act perpetrated against a hosting facility or sports-wagering

vendor for which the hosting facility or sports-wagering vendor is not reimbursed.

(iv) Free play provided by the hosting facility or sports-wagering vendor as authorized by

the division of lottery to a patron and subsequently "won back" by the hosting facility or sports-

wagering vendor, for which the hosting facility or sports-wagering vendor can demonstrate that it

or its affiliate has not been reimbursed in cash.

(20)(19) "Sporting event" means any professional sport or athletic event, any Olympic or

international sports competition event, and any collegiate sport or athletic event, or any portion

thereof, including, but not limited to, the individual performance statistics of athletes in a sports

event or combination of sports events, except "sports event" shall not include a prohibited sports

event.

(21)(3) "Collegiate sports or athletic event" shall not include a collegiate sports contest or

collegiate athletic event that takes place in Rhode Island or a sports contest or athletic event in

which any Rhode Island college team participates regardless of where the event takes place.

(22)(20) "Sports wagering" means the business of accepting wagers on sporting events or

a combination of sporting events, or on the individual performance statistics of athletes in a sporting

event or combination of sporting events, by any system or method of wagering. The term includes,

but is not limited to, exchange wagering, parlays, over-under, moneyline, pools, and straight bets,

and the term includes the placement of such bets and wagers. However, the term does not include,

without limitation, the following:

(1) Lotteries, including video-lottery games and other types of casino gaming operated by

the state, through the division, on the date this act is enacted.

(2) Pari-mutuel betting on the outcome of thoroughbred or harness horse racing, or

greyhound dog racing, including but not limited to, pari-mutuel wagering on a race that is

"simulcast" (as defined in section § 41-11-1 of the general laws), as regulated elsewhere pursuant

to the general laws, including in chapters 41-3, 41-3.1, 41-4 and 41-11of the general laws 3, 3.1, 4,

and 11 of title 41.

(3) Off-track betting on racing events, as regulated elsewhere pursuant to the general laws,

including in chapter 41-10 of the general laws 10 of title 41.

(4) Wagering on the respective scores or points of the game of jai alai or pelota and the

sale of pari-mutuel pools related to such games, as regulated elsewhere pursuant to the general

laws, including in chapter 41-7 of the general laws 7 of title 41.

(5) Lotteries, charitable gaming, games of chance, bingo games, raffles, and pull-tab lottery

tickets, to the extent permitted and regulated pursuant to chapter 11-19 of the general laws 19 of

title 11.

(23)(21) "Sports-wagering device" means any mechanical, electrical, or computerized

contrivance, terminal, machine, or other device, apparatus, equipment, or supplies approved by the

division and used to conduct sports wagering.

(24)(23) "Sports-wagering vendor" means any entity authorized by the division of lottery

to operate sports betting on the division’s behalf in accordance with this chapter.

(25)(16) "Payoff", when used in connection with sports wagering, means cash or cash

equivalents paid to a player as a result of the player’s winning a sports wager. A "payoff" is a type

of "prize," as the term "prize" is used in chapter 42-61, chapter 42-61.2 and in chapter 42-61.3

chapters 61, 61.2, and 61.3 of this title.

(26)(27) "Tiverton gaming facility" (sometimes referred to as "Twin River–Tiverton")

means the gaming and entertainment facility located in the Town town of Tiverton at the

intersection of William S. Canning Boulevard and Stafford Road.

(27)(28) "Twin River" (sometimes referred to as "UTGR") means UTGR, Inc., a Delaware

corporation, and each permitted successor to and assignee of UTGR, Inc.; provided further,

however, where the context indicates that the term is referring to a physical facility, then "Twin

River" or "Twin River gaming facility" shall mean the gaming and entertainment facility located at

100 Twin River Road in Lincoln, Rhode Island.

(28)(8) "Hosting facility" refers to Twin River and the Tiverton gaming facility.

(29)(5) "DBR" means the department of business regulation, division of licensing and

gaming and athletics gaming and athletics licensing, and/or any successor in interest thereto.

(30)(7) "Division,", "division of lottery,", "division of lotteries", or "lottery division"

means the division of lotteries within the department of revenue and/or any successor in interest

thereto.

(31)(6) "Director" means the director of the division.

42-61.2-3.2. Gaming credit authorized.

(a) Authority. In addition to the powers and duties of the state lottery director under §§ 42-

61-4, 42-61.2-3, 42-61.2-3.1 and 42-61.2-4, the division shall authorize each licensed, video-lottery

retailer to extend credit to players pursuant to the terms and conditions of this chapter.

(b) Credit. Notwithstanding any provision of the general laws to the contrary, including,

without limitation, § 11-19-17, except for applicable licensing laws and regulations, each licensed,

video-lottery retailer may extend interest-free, unsecured credit to its patrons for the sole purpose

of such patrons making wagers at table games and/or video-lottery terminals and/or for the purpose

of making sports wagering bets, at the licensed, video-lottery retailer's facility subject to the terms

and conditions of this chapter.

regulations submitted by licensed, video-lottery retailers and subject to the approval of the division

of lotteries regarding procedures governing the extension of credit and requirements with respect

to a credit applicant's financial fitness, including, without limitation: annual income; debt-to-

income ratio; prior credit history; average monthly bank balance; and/or level of play. The division

of lotteries may approve, approve with modification, or disapprove any portion of the policies and

procedures submitted for review and approval.

(d) Credit applications. Each applicant for credit shall submit a written application to the

licensed, video-lottery retailer that shall be maintained by the licensed, video-lottery retailer for

three (3) years in a confidential credit file. The application shall include the patron's name; address;

telephone number; social security number; comprehensive bank account information; the requested

credit limit; the patron's approximate amount of current indebtedness; the amount and source of

income in support of the application; the patron's signature on the application; a certification of

truthfulness; and any other information deemed relevant by the licensed, video-lottery retailer or

the division of lotteries.

(e) Credit application verification. As part of the review of a credit application and before

an application for credit is approved, the licensed, video-lottery retailer shall verify:

(1) The identity, creditworthiness, and indebtedness information of the applicant by

conducting a comprehensive review of:

(i) The information submitted with the application;

(ii) Indebtedness information regarding the applicant received from a credit bureau; and/or

(iii) Information regarding the applicant's credit activity at other licensed facilities that the

licensed, video-lottery retailer may obtain through a casino credit bureau and, if appropriate,

through direct contact with other casinos.

(2) That the applicant's name is not included on an exclusion or self-exclusion list

maintained by the licensed, video-lottery retailer and/or the division of lotteries.

(3) As part of the credit application, the licensed, video-lottery retailer shall notify each

applicant in advance that the licensed, video-lottery retailer will verify the information in

subsections (e)(1) and (e)(2) and may verify any other information provided by the applicant as

part of the credit application. The applicant is required to acknowledge in writing that he or she

understands that the verification process will be conducted as part of the application process and

that he or she consents to having said verification process conducted.

(f) Establishment of credit. After a review of the credit application, and upon completion

of the verification required under subsection (e), and subject to the rules and regulations approved

by the division of lotteries, a credit facilitator may approve or deny an application for credit to a

player. The credit facilitator shall establish a credit limit for each patron to whom credit is granted.

The approval or denial of credit shall be recorded in the applicant's credit file that shall also include

the information that was verified as part of the review process, and the reasons and information

relied on by the credit facilitator in approving or denying the extension of credit and determining

the credit limit. Subject to the rules and regulations approved by the division of lotteries, increases

to an individual's credit limit may be approved by a credit facilitator upon receipt of a written

request from the player after a review of updated financial information requested by the credit

facilitator and re-verification of the player's credit information.

(g) Recordkeeping. Detailed information pertaining to all transactions affecting an

individual's outstanding indebtedness to the licensed, video-lottery retailer shall be recorded in

chronological order in the individual's credit file. The financial information in an application for

credit and documents related thereto shall be confidential. All credit application files shall be

maintained by the licensed, video-lottery retailer in a secure manner and shall not be accessible to

anyone not a credit facilitator or a manager or officer of a licensed, video-lottery retailer responsible

for the oversight of the extension of credit program.

(h) Reduction or suspension of credit. A credit facilitator may reduce a player's credit limit

or suspend his or her credit to the extent permitted by the rules and regulations approved by the

division of lotteries and shall reduce a player's credit limit or suspend a player's credit limit as

required by said rules and regulations.

(i) Voluntary credit suspension. A player may request that the licensed, video-lottery

retailer suspend or reduce his or her credit. Upon receipt of a written request to do so, the player's

credit shall be reduced or suspended as requested. A copy of the request and the action taken by

the credit facilitator shall be placed in the player's credit application file.

(j) Liability. In the event that a player fails to repay a debt owed to a licensed, video-lottery

retailer resulting from the extension of credit by that licensed, video-lottery retailer, neither the

state of Rhode Island nor the division of lotteries shall be responsible for the loss and said loss shall

not affect net, table-game revenue or net terminal income. A licensed, video-lottery retailer, the

state of Rhode Island, the division of lotteries, and/or any employee of a licensed, video-lottery

retailer, shall not be liable in any judicial or administrative proceeding to any player, any individual,

or any other party, including table game players or individuals on the voluntary suspension list, for

any harm, monetary or otherwise, that may arise as a result of:

(1) Granting or denial of credit to a player;

(2) Increasing the credit limit of a player;

(3) Allowing a player to exercise his or her right to use credit as otherwise authorized;

(4) Failure of the licensed, video-lottery retailer to increase a credit limit;

(5) Failure of the licensed, video-lottery retailer to restore credit privileges that have been

suspended, whether involuntarily or at the request of the table game patron; or

(6) Permitting or prohibiting an individual whose credit privileges have been suspended,

whether involuntarily or at the request of the player, to engage in gaming activity in a licensed

facility while on the voluntary credit suspension list.

(k) Limitations. Notwithstanding any other provision of this chapter, for any extensions of

credit, the maximum amount of outstanding credit per player shall be fifty thousand dollars

($50,000).

42-61.2-4. Additional powers and duties of director and lottery division.

In addition to the powers and duties set forth in §§ 42-61-4 and 42-61.2-3, the director shall

have the power to:

(1) Supervise and administer the operation of video lottery games and sports wagering in

accordance with this chapter and with the rules and regulations of the division;

(2) Suspend or revoke upon a hearing any license issued pursuant to this chapter or the

rules and regulations promulgated under this chapter; and

(3) In compliance with the provisions of chapter 2 of title 37, enter into contracts for the

operation of a central communications system and technology providers, or any part thereof.;

(4) In compliance with the provisions of chapter 2 of title 37, enter into contracts for the

provision of sports-wagering systems, facilities, and related technology necessary and/or desirable

for the state-operated sports wagering to be hosted at Twin River and the Tiverton gaming facilities,

including technology related to the operation of on-premises remote sports wagering, or any part

thereof; and

(4)(5) Certify monthly to the budget officer, the auditor general, the permanent joint

committee on state lottery, and to the governor a full and complete statement of lottery revenues,

prize disbursements, and other expenses for the preceding month; ensure that monthly financial

reports are prepared providing gross monthly revenues, prize disbursements, other expenses, and

net income for keno and for all other lottery operations; submit this report to the state budget officer,

the auditor general, the permanent joint committee on state lottery, the legislative fiscal advisors,

and the governor no later than the twentieth business day following the close of the month; at the

end of each fiscal year the director shall submit an annual report based upon an accrual system of

accounting which shall include a full and complete statement of lottery revenues, prize

disbursements, and expenses, to the governor and the general assembly, which report shall be a

public document and shall be filed with the secretary of state. The monthly report shall be prepared

in a manner prescribed by the members of the revenue estimating conference.

42-61.2-6. When games may be played.

(a) Video-lottery games authorized by this chapter may be played at the licensed, video-

lottery retailer's facilities with the approval of the lottery commission division, even if that facility

is not conducting a pari-mutuel event.

(b) Sports wagering authorized by this chapter, including accepting sports wagers and

administering payoffs of winning sports wagers, may be conducted at the Twin River and the

Tiverton gaming facilities, with the approval of the division, even if that facility is not conducting

a pari-mutuel event.

42-61.2-10. Prizes exempt from taxation.

The prizes received pursuant to this chapter shall be exempt from the state sales or use tax.

The prizes, including payoffs, received pursuant to this chapter shall be exempt from the state sales

or use tax but shall be applicable to personal income tax laws.

42-61.2-11. Effect of other laws and local ordinances.

(a) No other law providing any penalty or disability for operating, hosting, maintaining,

supporting, or playing video lottery games, or any acts done in connection with video lottery games,

shall apply to operating, hosting, maintaining, supporting, or playing video-lottery games pursuant

to this chapter.

(b) No other law providing any penalty or disability for conducting, hosting, maintaining,

supporting, or participating in sports wagering, or any acts done in connection with sports wagering,

shall apply to conducting, hosting, maintaining, supporting, or participating in sports wagering,

pursuant to this chapter.

provisions of this chapter shall take precedence over any local ordinances to the contrary. It is

specifically acknowledged that the installation, operation, and use of video-lottery terminals by a

pari-mutuel licensee, as authorized in this chapter, shall for all purposes be deemed a permitted use

as defined in § 45-24-31. No city or town where video-lottery terminals are authorized may seek to

prevent the installation and use of said video-lottery terminals by defining such as a prohibited use.

42-61.2-13. Table-game enforcement. [See Applicability notes.] Enforcement.

(a) Whoever violates § 42-61.2-2.1 or § 42-61.2-3.1, or any rule or regulation, policy or

procedure, duly promulgated thereunder, or any administrative order issued pursuant to § 42-61.2-

2.1 or § 42-61.2-3.1, shall be punishable as follows:

(1) In the Division director's discretion, the Division director may impose an administrative

penalty of not more than one thousand dollars ($1,000) for each violation. Each day of continued

violation shall be considered as a separate violation if the violator has knowledge of the facts

constituting the violation and knows or should know that such facts constitute or may constitute a

violation. Lack of knowledge regarding such facts or violation shall not be a defense to a continued

violation with respect to the first day of its occurrence. Written notice detailing the nature of the

violation, the penalty amount, and effective date of the penalty will be provided by the Division

director. Penalties shall take effect upon notification. A written request for a hearing must be

submitted in writing to the Division director within thirty (30) days of notification of violation.

(2) In the Division director's discretion, the Division director may endeavor to obtain

compliance with requirements of this chapter by written administrative order. Such order shall be

provided to the responsible party, shall specify the complaint, and propose a time for correction of

the violation.

(b) The Division director shall enforce this chapter. Such enforcement shall include, but

not be limited to, referral of suspected criminal activity to the Rhode Island state police for

investigation.

Division for administrative purposes.

(d) Any penalty imposed by the Division pursuant to this § 42-61.2-13 section shall be

appealable to Superior Court.

42-61.2-14. Compulsive and problem gambling program. [See Applicability notes.].

The Division and the State acknowledge that the vast majority of gaming patrons can enjoy

gambling games responsibly, but that there are certain societal costs associated with gaming by

some individuals who have problems handling the product or services provided. The Division and

the State further understand that it is their duty to act responsibly toward those who cannot

participate conscientiously in gaming. Pursuant to the foregoing, Twin River and Newport Grand,

in cooperation with the State, shall offer compulsive and problem gambling programs that include,

but are not limited to (a) problem gambling awareness programs for employees; (b) player self-

exclusion program; and (c) promotion of a problem gambling hotline. Twin River and Newport

Grand (and its successor in interest, Twin River-Tiverton) shall modify their existing compulsive

and problem-gambling programs to include table games and sports wagering to the extent such

games are authorized at such facilities. Twin River and Newport Grand (and its successor in

interest, Twin River-Tiverton) shall reimburse and pay to the Division no less than one hundred

thousand dollars ($100,000) one hundred twenty-five thousand dollars ($125,000) in aggregate

annually for compulsive and problem gambling programs established by the Division. The

contribution from each facility shall be determined by the Division.

42-61.2-15. Table-game hours of operation Table game and sports-wagering hours of

operation.

(a) To the extent table games are authorized at the premises of a table-game retailer, such

table games may be offered at the premises of a table-game retailer for all or a portion of the days

and times that video-lottery games are offered.

(b) To the extent sports wagering is authorized at the premises of a table-game retailer,

such sports wagering may be offered at the premises of such table-game retailer for all or a portion

of the days and times that video-lottery games are offered.

SECTION 5. Chapter 42-61.2 of the General Laws entitled "Video-Lottery Terminal" is

hereby amended by adding thereto the following sections:

42-61.2-2.4. State to conduct sports wagering hosted by Twin River and the Tiverton

Gaming Facility.

(a) The state, through the division of lotteries, shall implement, operate, conduct, and

control sports wagering at the Twin River gaming facility and the Twin River-Tiverton gaming

facility, once Twin River-Tiverton is licensed as a video-lottery and table-game retailer. In

furtherance thereof, the state, through the division, shall have full operational control to operate

such the sports wagering, including, without limitation, the power and authority to:

(1) Establish, with respect to sports wagering, one or more systems for linking, tracking,

depositing, and reporting of receipts, audits, annual reports, prohibited conduct, and other such

matters determined by the division from time to time;

(2) Collect all sports-wagering revenue indirectly through Twin River and Tiverton gaming

facilities, require that the Twin River and Tiverton gaming facilities collect all sports-wagering

revenue in trust for the state (through the division), deposit such sports-wagering revenue into an

account or accounts of the division’s choice, allocate such sports-wagering revenue according to

law, and otherwise maintain custody and control over all sports-wagering revenue;

(3) Hold and exercise sufficient powers over the Twin River and Tiverton gaming facilities’

accounting and finances to allow for adequate oversight and verification of the financial aspects of

sports wagering hosted at their respective facilities in Lincoln and Tiverton, including, without

limitation:

(i) The right to require the Twin River and Tiverton gaming facilities to maintain an annual

balance sheet, profit and loss statement, and any other necessary information or reports;

(ii) The authority and power to conduct periodic compliance or special or focused audits

of the information or reports provided, as well as the premises within the facilities containing

records of sports wagering or in which the sports-wagering activities are conducted; and

(4) Monitor the sports-wagering operations hosted by the Twin River and Tiverton gaming

facilities and have the power to terminate or suspend any sports-wagering activities in the event of

an integrity concern or other threat to the public trust, and in furtherance thereof, require Twin

River and Tiverton, respectively, to provide a specified area or areas from which to conduct such

monitoring activities;

(5) Through the use of a sports-wagering vendor, define and limit the rules of play and

odds of authorized sports-wagering games, including, without limitation, the minimum and

maximum wagers for each sports-wagering game. Sports-wagering payoffs shall not be subject to

any limitation or restriction related to sports-wagering revenue or lottery revenue.;

(6) Establish compulsive gambling treatment programs;

(7) Promulgate, or propose for promulgation, any legislative, interpretive, and procedural

rules necessary for the successful implementation, administration, and enforcement of this chapter;

and

(8) Hold all other powers necessary and proper to fully effectively execute and administer

the provisions of this chapter for the purpose of allowing the state to operate sports wagering hosted

by the Twin River and Tiverton gaming facilities.

(b) The state, through the division and/or the DBR, shall have approval rights over matters

relating to the employment of individuals to be involved, directly or indirectly, with the operation

of sports wagering at the Twin River and Tiverton gaming facilities.

create a separate license governing the hosting of sports wagering in Rhode Island by licensed

video-lottery and table-game retailers.

(d) The state, through the division, shall have authority to issue such regulations as it deems

appropriate pertaining to the control, operation, and management of sports wagering. The state,

through DBR, shall have authority to issue such regulations as it deems appropriate pertaining to

the employment of individuals to be involved, directly or indirectly, with the operations of sports

wagering as set forth in subsection (b) of this section.

(e) Any list or other identifiable data of sports-wagering players generated or maintained

by the sports-wagering vendor or the hosting facility as a result of sports wagering shall be the

exclusive property of the division, provided that the hosting facilities shall be permitted to use any

such list or other identifiable data for marketing purposes to the extent it currently uses similar data,

as approved by the division and for marketing purposes to directly or indirectly generate additional

gaming revenue, as approved by the division.

42-61.2-3.3. Sports wagering regulation.

(a) In addition to the powers and duties of the division director under §§ 42-61-4, 42-61.2-

3, 42-61.2-4 and 42-61.2-3.1, and pursuant to § 42-61.2-2.4, the division director shall promulgate

rules and regulations relating to sports wagering and set policy therefor. These rules and regulations

shall establish standards and procedures for sports waging wagering and associated devices,

equipment, and accessories, and shall include, but not be limited to:

(1) Approve standards, rules, and regulations to govern the conduct of sports wagering and

the system of wagering associated with sports wagering, including without limitation:

(i) The objects of the sports wagering (i.e., the sporting events upon which sports-wagering

bets may be accepted) and methods of play, including what constitutes win, loss, or tie bets;

(ii) The manner in which sports-wagering bets are received, payoffs are remitted, and point

spreads, lines, and odds are determined for each type of available sports wagering bet;

(iii) Physical characteristics of any devices, equipment, and accessories related to sports

wagering;

(iv) The applicable inspection procedures for any devices, equipment, and accessories

related to sports wagering;

(v) Procedures for the collection of bets and payoffs, including but not limited to,

requirements for internal revenue service purposes;

(vi) Procedures for handling suspected cheating and sports-wagering irregularities; and

(vii) Procedures for handling any defective or malfunctioning devices, equipment, and

accessories related to sports wagering.

(2) Establishing the method for calculating sports-wagering revenue and standards for the

daily counting and recording of cash and cash equivalents received in the conduct of sports

wagering, and ensuring that internal controls are followed and financial books and records are

maintained and audits are conducted;

(3) Establishing the number and type of sports-wagering bets authorized at the hosting

facility, including any new sports-wagering bets or variations or composites of approved sports-

wagering bets, and all rules related thereto;

(4) Establishing any sports-wagering rule changes, sports-wagering minimum and

maximum bet changes, and changes to the types of sports-wagering products offered at a particular

hosting facility, including but not limited to, any new sports-wagering bets or variations or

composites of approved sports-wagering bets, and including all rules related thereto;

(5) Requiring the hosting facility and/or sports-wagering vendor to:

(i) Provide written information at each sports-wagering location within the hosting facility

about wagering rules, payoffs on winning sports wagers, and other information as the division may

require.;

(ii) Provide specifications approved by the division to integrate and update the hosting

facility’s surveillance system to cover all areas within the hosting facility where sports wagering is

conducted and other areas as required by the division. The specifications shall include provisions

providing the division and other persons authorized by the division with onsite access to the

system.;

(iii) Designate one or more locations within the hosting facility where sports wagering bets

are received.;

(iv) Ensure that visibility in a hosting facility is not obstructed in any way that could

interfere with the ability of the division, the sports wagering vendor, or other persons authorized

under this section or by the division to oversee the surveillance of the conduct of sports wagering.;

(v) Ensure that the count rooms for sports wagering has have appropriate security for the

counting and storage of cash.;

(vi) Ensure that drop boxes are brought into or removed from an area where sports

wagering is conducted or locked or unlocked in accordance with procedures established by the

division.;

(vii) Designate secure locations for the inspection, service, repair, or storage of sports-

wagering equipment and for employee training and instruction to be approved by the division.;

(vii) (viii) Establish standards prohibiting persons under eighteen (18) years of age from

participating in sports wagering.;

(ix) Establish compulsive and problem gambling standards and/or programs pertaining to

sports wagering consistent with general laws chapter 42-61.2 this chapter.;

(6) Establishing the minimal proficiency requirements for those individuals accepting

sports wagers and administering payoffs on winning sports wagers. The foregoing requirements of

this subsection may be in addition to any rules or regulations of the DBR requiring licensing of

personnel of state-operated gaming facilities;

(7) Establish appropriate eligibility requirements and standards for traditional sports-

wagering equipment suppliers; and

(8) Any other matters necessary for conducting sports wagering.

(b) The hosting facility shall provide secure, segregated facilities as required by the

division on the premises for the exclusive use of the division staff and the gaming enforcement unit

of the state police. Such The space shall be located proximate to the gaming floor and shall include

surveillance equipment, monitors with full camera control capability, as well as other office

equipment that may be deemed necessary by the division. The location and size of the space and

necessary equipment shall be subject to the approval of the division.

42-61.2-5. Allocation of sports-wagering revenue.

(a) Notwithstanding the provisions of § 42-61-15, the division of lottery is authorized to

enter into an agreement, limited to in-person on-site sports wagering, to allocate sports-wagering

revenue derived from sports wagering at the Twin River and Tiverton gaming facilities, (the hosting

facilities) between the state, the state's authorized sports-wagering vendor, and the host facilities.

The allocation of sports-wagering revenue shall be:

(1) To the state, fifty-one percent (51%) of sports-wagering revenue;

(2) To the state's authorized sports wagering-vendor, thirty-two percent (32%) of sports

wagering-revenue; and

(3) To the host facilities, seventeen percent (17%) of sports-wagering revenue.

(b) Sports-wagering revenue allocated to the state shall be deposited into the state lottery

fund for administrative purposes and then the balance remaining into the general fund.

($100,000) and the town of Tiverton shall be paid an annual flat fee of one hundred thousand dollars

($100,000) in compensation for serving as the host communities for sports wagering.

42-61.2-9. Unclaimed prize money, including unclaimed sports-wagering payoffs.

Unclaimed prize money for prizes in connection with the play of a video-lottery game and

an unclaimed payoff in connection with a sports wager shall be retained by the director for the

person entitled thereto for one year after, respectively, the completion of the applicable video-

lottery game or the determination of the result of the sporting event that was the subject of the

applicable sports wager. If no claim is made for the prize money or payoff within that year, the

prize money or payoff shall automatically revert to the lottery fund and the winner shall have no

claim thereto.

SECTION 6. Section 42-61.3-2 of the General Laws in Chapter 42-61.3 entitled "Casino

Gaming" is hereby amended to read as follows:

42-61.3-2. Casino gaming crimes.

(a) Definitions as used in this chapter:

(1) "Casino gaming" shall have the meaning set forth in the Rhode Island general laws

subdivision § 42-61.2-1(8)(1).

(2) "Cheat" means to alter the element of chance, method of selection, or criteria which

determines:

(i) The result of the game;

(ii) The amount or frequency of payment in a game, including intentionally taking

advantage of a malfunctioning machine;

(iii) The value of a wagering instrument; or

(iv) The value of a wagering credit.

(3) "Cheating device" means any physical, mechanical, electromechanical, electronic,

photographic, or computerized device used in such a manner as to cheat, deceive, or defraud a

casino game. This includes, but is not limited to:

(i) Plastic, tape, string, or dental floss, or any other item placed inside a coin or bill acceptor

or any other opening in a video-lottery terminal in a manner to simulate coin or currency

acceptance;

(ii) Forged or stolen keys used to gain access to a casino game to remove its contents; and

(iii) Game cards or dice that have been tampered with, marked, or loaded.

(4) "Gaming facility" means any facility authorized to conduct casino gaming as defined

in the Rhode Island general laws subdivision § 42-61.2-1(8)(1), including its parking areas and/or

adjacent buildings and structures.

(5) "Paraphernalia for the manufacturing of cheating devices" means the equipment,

products, or materials that are intended for use in manufacturing, producing, fabricating, preparing,

testing, analyzing, packaging, storing, or concealing a counterfeit facsimile of the chips, tokens,

debit instruments, or other wagering devices approved by the division of state lottery or lawful coin

or currency of the United States of America. This term includes, but is not limited to:

(i) Lead or lead alloy molds, forms, or similar equipment capable of producing a likeness

of a gaming token or United States coin or currency;

(ii) Melting pots or other receptacles;

(iii) Torches, tongs, trimming tools, or other similar equipment; and

(iv) Equipment that can be used to manufacture facsimiles of debit instruments or wagering

instruments approved by the division of state lottery.

(6) "Table game" shall have the meaning set forth in Rhode Island general laws subdivision

§ 42-61.2-1(11)(24).

(7) "Wager" means a sum of money or representative of value that is risked on an

occurrence for which the outcome is uncertain.

(b) Prohibited acts and penalties. It shall be unlawful for any person to:

(1) Use, or attempt to use, a cheating device in a casino game or to have possession of such

a device in a gaming facility. Any person convicted of violating this section shall be guilty of a

felony punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

(2) Use, acquire, or possess paraphernalia with intent to cheat, or attempt to use, acquire,

or possess, paraphernalia with the intent to manufacture cheating devices. Any person convicted of

violating this section shall be guilty of a felony punishable by imprisonment for not more than ten

(10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

(3) Cheat, or attempt to cheat, in order to take or collect money or anything of value,

whether for one's self or another, in or from a casino game in a gaming facility. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

(4) Conduct, carry on, operate, deal, or attempt to conduct, carry on, operate, or deal, or

allow to be conducted, carried on, operated, or dealt, any cheating game or device. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

(5) Manipulate or alter or attempt to manipulate or alter, with the intent to cheat, any

physical, mechanical, electromechanical, electronic, or computerized component of a casino game,

contrary to the designed and normal operational purpose for the component. Any person convicted

of violating this section shall be guilty of a felony punishable by imprisonment for not more than

ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

(6) Use, sell, or possess, or attempt to use, sell, or possess, counterfeit: coins, slugs, tokens,

gaming chips, debit instruments, player rewards cards, or any counterfeit wagering instruments

and/or devices resembling tokens, gaming chips, debit or other wagering instruments approved by

the division of state lottery for use in a casino game in a gaming facility. Any person convicted of

violating this section shall be guilty of a felony punishable by imprisonment for not more than ten

(10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

(7) (i) Place, increase, decrease, cancel, or remove a wager or determine the course of play

of a table game, or attempt to place, increase, decrease, cancel, or remove a wager or determine the

course of play of a table game, with knowledge of the outcome of the table game where such

knowledge is not available to all players; or

(ii) Aid, or attempt to aid anyone in acquiring such knowledge for the purpose of placing,

increasing, decreasing, cancelling, or removing a wager or determining the course of play of the

table game. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(8) Claim, collect, or take, or attempt to claim, collect, or take, money or anything of value

in or from a casino game or gaming facility, with intent to defraud, or to claim, collect, or take an

amount greater than the amount won. Any person convicted of violating this section shall be guilty

of a felony punishable by imprisonment for not more than ten (10) years or a fine of not more than

one hundred thousand dollars ($100,000), or both;

(9) For any employee of a gaming facility or anyone acting on behalf of or at the direction

of an employee of a gaming facility, to knowingly fail to collect, or attempt to fail to collect, a

losing wager or pay, or attempt to pay, an amount greater on any wager than required under the

rules of a casino game. Any person convicted of violating this section shall be guilty of a felony

punishable by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

(10) Directly or indirectly offer, or attempt to offer, to conspire with another, or solicit, or

attempt to solicit, from another, anything of value, for the purpose of influencing the outcome of a

casino game. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(11) Use or possess, or attempt to use or possess, at a gaming facility, without the written

consent of the director of the division of state lottery, any electronic, electrical, or mechanical

device designed, constructed, or programmed to assist the user or another person with the intent to:

(i) Predict the outcome of a casino game;

(ii) Keep track of the cards played;

(iii) Analyze and/or predict the probability of an occurrence relating to the casino game;

and/or

(iv) Analyze and/or predict the strategy for playing or wagering to be used in the casino

game. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(12) Skim, or attempt to skim, casino gaming proceeds by excluding anything of value

from the deposit, counting, collection, or computation of:

(i) Gross revenues from gaming operations or activities;

(ii) Net gaming proceeds; and/or

(iii) Amounts due the state pursuant to applicable casino gaming-related laws. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

(13) Cheat, or attempt to cheat, in the performance of his/her duties as a dealer or other

casino employee by conducting one's self in a manner that is deceptive to the public or alters the

normal random selection of characteristics or the normal chance or result of the game, including,

but not limited to, using cards, dice, or any cheating device(s) which have been marked, tampered

with, or altered. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(14) Possess or use, or attempt to use, without proper authorization from the state lottery

division, while in the gaming facility any key or device designed for the purpose of or suitable for

opening or entering any self-redemption unit (kiosk), vault, video-lottery terminal, drop box, or any

secured area in the gaming facility that contains casino gaming and/or surveillance equipment,

computers, electrical systems, currency, cards, chips, dice, or any other thing of value. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

(15) Tamper and/or interfere, or attempt to tamper and/or interfere, with any casino gaming

and/or surveillance equipment, including, but not limited to, related computers and electrical

systems. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(16) Access, interfere with, infiltrate, hack into, or infect, or attempt to access, interfere

with, infiltrate, hack into, or infect, any casino gaming-related computer, network, hardware and/or

software or other equipment. Any person convicted of violating this section shall be guilty of a

felony punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

(17) Sell, trade, barter, profit from, or otherwise use to one's financial advantage, or attempt

to sell, trade, barter, profit from, or otherwise use to one's financial advantage, any confidential

information related to casino-gaming operations, including, but not limited to, data (whether stored

on a computer's software, hardware, network, or elsewhere), passwords, codes, surveillance and

security characteristics and/or vulnerabilities, and/or non-public internal controls, policies, and

procedures related thereto. Any person convicted of violating this section shall be guilty of a felony

punishable by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

(18) Conduct a gaming operation, or attempt to conduct a gaming operation, where

wagering is used or to be used without a license issued by or authorization from the division of

state lottery. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(19) Provide false information and/or testimony to the division of state lottery, department

of business regulation, or their authorized representatives and/or the state police while under oath.

Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

(20) Play a casino game and/or make a wager, or attempting attempt to play a casino game

and/or make a wager, if under the age of eighteen (18) years. Any person charged under this section

shall be referred to family court; or

(21) Permit, or attempt to permit, a person to play a casino game and/or accept, or attempt

to accept, a wager from a person, if he/she is under the age of eighteen (18) years. Any person

convicted of violating this section be guilty of a misdemeanor punishable by imprisonment for not

more than one year or a fine of not more than one thousand dollars ($1,000), or both.

SECTION 7. Section 11-19-14 of the General Laws in Chapter 11-19 entitled "Gambling

and Lotteries" is hereby amended to read as follows:

11-19-14. Bookmaking.

Except as provided in chapter 4 of title 41 and excluding activities authorized by the

division of lottery under chapters 61 and 61.2 of title 42, any person who shall engage in pool

selling or bookmaking, or shall occupy or keep any room, shed, tenement, tent, or building, or any

part of them, or shall occupy any place upon any public or private grounds within this state, with

books, apparatus, or paraphernalia for the purpose of recording or registering bets or wagers or of

buying or selling pools, or who shall record or register bets or wagers or sell pools upon the result

of any trial or contest of skill, speed, or power of endurance of man or beast, or upon the result of

any political nomination, appointment, or election, or, being the owner or lessee or occupant of any

room, tent, tenement, shed, booth, or building, or part of them, knowingly shall permit it to be used

or occupied for any of these purposes, or shall keep, exhibit, or employ any device or apparatus for

the purpose of recording or registering bets or wagers, or the selling of pools, or shall become the

custodian or depositary for gain, hire, or reward of any money, property, or thing of value staked,

wagered, or pledged or to be wagered or pledged upon the result, or who shall receive, register,

record, forward, or purport or pretend to forward to or for any race course, or person, within or

outside this state, any money, thing, or consideration of value bet or wagered, or money, thing, or

consideration of value offered for the purpose of being bet or wagered upon the speed or endurance

of any man or beast; or who shall occupy any place or building or part of it with books, papers,

apparatus, or paraphernalia for the purpose of receiving or pretending to receive, or for recording

or registering, or for forwarding or pretending or attempting to forward in any manner whatsoever,

any money, thing, or consideration of value bet or wagered or to be bet or wagered for any other

person, or who shall receive or offer to receive any money, thing, or consideration of value bet or

to be bet at any race track within or without this state, or who shall aid, assist, or abet in any manner

in any of the acts forbidden by this section, shall upon conviction be punished by a fine not

exceeding five hundred dollars ($500) or imprisonment not exceeding one year, and upon a second

conviction of a violation of this section shall be imprisoned for a period not less than one nor more

than five (5) years.

SECTION 8. Sections 42-142-1 and 42-142-2 of the General Laws in Chapter entitled

"Department of Revenue" are hereby amended to read as follows:

42-142-1. Department of revenue.

(a) There is hereby established within the executive branch of state government a

department of revenue.

(b) The head of the department shall be the director of revenue, who shall be appointed by

the governor, with the advice and consent of the senate, and shall serve at the pleasure of the

governor.

of motor vehicles (chapter 2 of title 31), the division of state lottery (chapter 61 of title 42), the

office of revenue analysis (chapter 142 of title 42), the division of municipal finance (chapter 142

of title 42), and a collection unit (chapter 142 of title 42). Any reference to the division of property

valuation, division of property valuation and municipal finance, or office of municipal affairs in

the Rhode Island general laws shall mean the division of municipal finance.

42-142-2. Powers and duties of the department.

The department of revenue shall have the following powers and duties:

(a) To operate a division of taxation.;

(b) To operate a division of motor vehicles;

(d) To operate an office of revenue analysis; and

(e) To operate a division of property valuation; and

(f) To operate a collection unit.

SECTION 9. Chapter 42-142 of the General Laws entitled "Department of Revenue" is

hereby amended by adding thereto the following section:

42-142-8. Collection unit.

(a) The director of the department of revenue is authorized to establish within the

department of revenue a collections collection unit for the purpose of assisting state agencies in the

collection of debts owed to the state. The director of the department of revenue may enter into an

agreement with any state agency(ies) to collect any delinquent debt owed to the state.

(b) The director of the department of revenue shall initially implement a pilot program to

assist the agency(ies) with the collection of delinquent debts owed to the state.

within the department of revenue, debts owed by delinquent debtors where the nature and amount

of the debt owed has been determined and reconciled by the agency and the debt is: (i) The subject

of a written settlement agreement and/or written waiver agreement and the delinquent debtor has

failed to timely make payments under said agreement and/or waiver and is therefore in violation of

the terms of said agreement and/or waiver; (ii) The subject of a final administrative order or

decision and the debtor has not timely appealed said order or decision; (iii) The subject of final

order, judgement judgment or decision of a court of competent jurisdiction and the debtor has not

timely appealed said order, judgement judgment or decision. The collections unit shall not accept

a referral of any delinquent debt unless it satisfies subsection (c)(i), (ii) or (iii) of this section.

(d) Any agency(ies) entering into an agreement with the department of revenue to allow

the collection unit of the department to collect a delinquent debt owed to the state shall indemnify

the department of revenue against injuries, actions, liabilities, or proceedings arising from the

collection, or attempted collection, by the collection unit of the debt owed to the state.

(e) Before referring a delinquent debt to the collection unit, the agency(ies) must notify the

debtor of its intention to submit the debt to the collection unit for collection and of the debtor's right

to appeal that decision not less than thirty (30) days before the debt is submitted to the collection

unit.

(f) At such time as the agency(ies) refers a delinquent debt to the collection unit, the agency

shall: (i) Represent in writing to the collection unit that it has complied with all applicable state and

federal laws and regulations relating to the collection of the debt, including, but not limited to, the

requirement to provide the debtor with the notice of referral to the collection unit under subsection

section (e) of this section; and (ii) Provide the collection unit personnel with all relevant supporting

documentation including, but not limited to, notices, invoices, ledgers, correspondence,

agreements, waivers, decisions, orders, and judgements judgments necessary for the collection

unit to attempt to collect the delinquent debt.

(g) The referring agency(ies) shall assist the collection unit by providing any and all

information, expertise, and resources deemed necessary by the collection unit to collect the

delinquent debts referred to the collection unit.

(h) Upon receipt of a referral of a delinquent debt from an agency(ies), the amount of the

delinquent debt shall accrue interest at an annual rate with such rate determined by adding two (2)

percent (2%) to the prime rate which was in effect on October 1 of the preceding year; provided

however, in no event shall the rate of interest exceed twenty-one (21%) per annum nor be less than

eighteen percent (18%) per annum.

(i) Upon receipt of a referral of a delinquent debt from the agency(ies), the collection unit

shall provide the delinquent debtor with a "Notice of Referral" advising the debtor that:

(1) The delinquent debt has been referred to the collection unit for collection; and

(2) The collection unit will initiate, in its names, any action that is available under state law

for the collection of the delinquent debt, including, but not limited to, referring the debt to a third

party to initiate said action.

(j) Upon receipt of a referral of a delinquent debt from an agency(ies), the director of the

department of revenue shall have the authority to institute, in its name, any action(s) that are

available under state law for collection of the delinquent debt and interest, penalties, and/or fees

thereon and to, with or without suit, settle the delinquent debt.

(k) In exercising its authority under this section, the collection unit shall comply with all

state and federal laws and regulations related to the collection of debts.

(l) Upon of the receipt of payment from a delinquent debtor, whether a full or partial

payment, the collection unit shall disburse/deposit the proceeds of said payment in the following

order:

(1) To the appropriate federal account to reimburse the federal government funds owed to

them by the state from funds recovered; and

(2) The balance of the amount collected to the referring agency.

(m) Notwithstanding the above, the establishment of a collection unit within the department

of revenue shall be contingent upon an annual appropriation by the general assembly of amounts

necessary and sufficient to cover the costs and expenses to establish, maintain, and operate the

collection unit including, but not limited to, computer hardware and software, maintenance of the

computer system to manage the system, and personnel to perform work within the collection unit.

(n) In addition to the implementation of any pilot program, the collection unit shall comply

with the provisions of this section in the collection of all delinquent debts under to this section.

(o) The department of revenue is authorized to promulgate rules and regulations as it deems

appropriate with respect to the collection unit.

(p) By September 1, 2020, and each year thereafter, the department of revenue shall

specifically assess the performance, effectiveness, and revenue impact of the collections associated

with this section, including, but not limited to, the total amounts referred and collected by each

referring agency during the previous state fiscal year to the governor, the speaker of the house of

representatives, the president of the senate, and the chairpersons of the house and senate finance

committees, and the house and senate fiscal advisors. Such report shall include the net revenue

impact to the state of the collections collection unit.

(q) No operations of a collections unit pursuant to this chapter shall be authorized after

June 30, 2021.

SECTION 10. Sections 44-18-7, 44-18-7.1, 44-18-7.3, 44-18-8, 44-18-15, 44-18-20, 44-

18-21, 44-18-22, 44-18-23, 44-18-25, 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.

"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) -15

and (16) -16 and all ancillary services, and any maintenance services of telecommunication

equipment other than as provided for in subdivision § 44-18-12(b)(ii). 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. §§ 116 – 126), subject to the specific

exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 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 §§ 44-

18.1-11 and 44-18.1-15. "Prepaid telephone calling arrangement" means and includes prepaid

calling service and prepaid wireless calling service.

(13) The sale, storage, use, or other consumption of over-the-counter drugs as defined in

paragraph § 44-18-7.1(h)(ii).

(14) The sale, storage, use, or other consumption of prewritten computer software delivered

electronically or by load and leave as defined in paragraph § 44-18-7.1(g)(v).

(15) The sale, storage, use, or other consumption of vendor-hosted prewritten computer

software as defined in § 44-18-7.1(g)(vii).

(15)(16) The sale, storage, use, or other consumption of medical marijuana as defined in §

21-28.6-3.

(16)(17) The furnishing of services in this state as defined in § 44-18-7.3.

44-18-7.1. Additional Definitions.

(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.

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 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

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 this section) 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, that 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."

(vii) "Vendor-hosted prewritten computer software" means prewritten computer software

that is accessed through the Internet internet and/or a vendor-hosted server regardless of whether

the access is permanent or temporary and regardless of whether any downloading occurs.

(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;

(B) Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease;

"Drug" shall also include 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. § 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 and seeds and plants used to grow food and food

ingredients. "Food and food ingredients" does not include "alcoholic beverages", "tobacco",

"candy", "dietary supplements", and "soft drinks.", or "marijuana seeds or plants."

(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

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 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

facts" box found on the label and as required pursuant to 21 C.F.R. § 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 that 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 of 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. § 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, that:

(i) Is primarily and customarily used to provide or increase the ability to move from one

place to another and that 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 device 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.

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. § 522(6) and audio and video

programming services delivered by commercial mobile radio service providers as defined in 47

C.F.R. § 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 that enables the origination of calls using an

access number 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.

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 §

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.

44-18-7.3. Services defined.

(a) "Services" means all activities engaged in for other persons for a fee, retainer,

commission, or other monetary charge, which activities involve the performance of a service in this

state as distinguished from selling property.

(b) The following businesses and services performed in this state, along with the applicable

2007 North American Industrial Classification System (NAICS) codes, are included in the

definition of services:

(1) Taxicab and limousine services including but not limited to:

(i) Taxicab services including taxi dispatchers (485310); and

(ii) Limousine services (485320).

(2) Other road transportation service including but not limited to:

(i) Charter bus service (485510);

(ii) "Transportation network companies" (TNC) defined as an entity that uses a digital

network to connect transportation network company riders to transportation network operators who

provide prearranged rides. Any TNC operating in this state is a retailer as provided in § 44-18-15

and is required to file a business application and registration form and obtain a permit to make sales

at retail with the tax administrator, to charge, collect, and remit Rhode Island sales and use tax; and

(iii) All other transit and ground passenger transportation (485999).

(3) Pet care services (812910) except veterinary and testing laboratories services.

(4)(i) "Room reseller" or "reseller" means any person, except a tour operator as defined in

§ 42-63.1-2, having any right, permission, license, or other authority from or through a hotel as

defined in § 42-63.1-2, to reserve, or arrange the transfer of occupancy of, accommodations the

reservation or transfer of which is subject to this chapter, such that the occupant pays all or a portion

of the rental and other fees to the room reseller or reseller,. room Room reseller or reseller shall

include, but not be limited to, sellers of travel packages as defined in this section. Notwithstanding

the provisions of any other law, where said reservation or transfer of occupancy is done using a

room reseller or reseller, the application of the sales and use tax under §§ 44-18-18 and 44-18-20,

and the hotel tax under § 44-18-36.1 shall be as follows: The room reseller or reseller is required

to register with, and shall collect and pay to, the tax administrator the sales and use and hotel taxes,

with said taxes being calculated upon the amount of rental and other fees paid by the occupant to

the room reseller or reseller, less the amount of any rental and other fees paid by the room reseller

or reseller to the hotel. The hotel shall collect and pay to the tax administrator said taxes upon the

amount of rental and other fees paid to the hotel by the room reseller or reseller and/or the occupant.

No assessment shall be made by the tax administrator against a hotel because of an incorrect

remittance of the taxes under this chapter by a room reseller or reseller. No assessment shall be

made by the tax administrator against a room reseller or reseller because of an incorrect remittance

of the taxes under this chapter by a hotel. If the hotel has paid the taxes imposed under this chapter,

the occupant and/or room reseller or reseller, as applicable, shall reimburse the hotel for said taxes.

If the room reseller or reseller has paid said taxes, the occupant shall reimburse the room reseller

or reseller for said taxes. Each hotel and room reseller or reseller shall add and collect, from the

occupant or the room reseller or the reseller, the full amount of the taxes imposed on the rental and

other fees. When added to the rental and other fees, the taxes shall be a debt owed by the occupant

to the hotel or room reseller or reseller, as applicable, and shall be recoverable at law in the same

manner as other debts. The amount of the taxes collected by the hotel and/or room reseller or

reseller from the occupant under this chapter shall be stated and charged separately from the rental

and other fees, and shall be shown separately on all records thereof, whether made at the time the

transfer of occupancy occurs, or on any evidence of the transfer issued or used by the hotel or the

room reseller or the reseller. A room reseller or reseller shall not be required to disclose to the

occupant the amount of tax charged by the hotel; provided, however, the room reseller or reseller

shall represent to the occupant that the separately stated taxes charged by the room reseller or

reseller include taxes charged by the hotel. No person shall operate a hotel in this state, or act as a

room reseller or reseller for any hotel in the state, unless the tax administrator has issued a permit

pursuant to § 44-19-1.

(ii) "Travel package" means a room, or rooms, bundled with one or more other, separate

components of travel such as air transportation, car rental, or similar items, which travel package

is charged to the customer or occupant for a single, retail price. When the room occupancy is

bundled for a single consideration, with other property, services, amusement charges, or any other

items, the separate sale of which would not otherwise be subject to tax under this chapter, the entire

single consideration shall be treated as the rental or other fees for room occupancy subject to tax

under this chapter; provided, however, that where the amount of the rental, or other fees for room

occupancy is stated separately from the price of such other property, services, amusement charges,

or other items, on any sales slip, invoice, receipt, or other statement given the occupant, and such

rental and other fees are determined by the tax administrator to be reasonable in relation to the

value of such other property, services, amusement charges, or other items, only such separately

stated rental and other fees will be subject to tax under this chapter. The value of the transfer of any

room, or rooms, bundled as part of a travel package may be determined by the tax administrator

from the room reseller's and/or reseller's and/or hotel's books and records that are kept in the regular

course of business.

(5) Investigation, Guard, and Armored Car Services (56161).

form and obtain a permit to make sales at retail with the tax administrator, to charge, collect, and

remit Rhode Island sales and use tax.

(d) The tax administrator is authorized to promulgate rules and regulations in accordance

with the provisions of chapter 42-35 35 of title 42 to carry out the provisions, policies, and purposes

of this chapter.

44-18-8. Retail sale or sale at retail defined.

A "retail sale" or "sale at retail" means any sale, lease, or rentals of tangible personal

property, prewritten computer software delivered electronically or by load and leave, vendor-hosted

prewritten computer software, or services as defined in § 44-18-7.3 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 § 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.

44-18-15. "Retailer" defined.

(a) "Retailer" includes:

(1) Every person engaged in the business of making sales at retail including prewritten

computer software delivered electronically or by load and leave, vendor-hosted prewritten

computer software, sales of services as defined in § 44-18-7.3, and sales at auction of tangible

personal property owned by the person or others.

(2) Every person making sales of tangible personal property including prewritten computer

software delivered electronically or by load and leave, or vendor-hosted prewritten computer

software, or sales of services as defined in § 44-18-7.3, through an independent contractor or other

representative, if the retailer enters into an agreement with a resident of this state, under which the

resident, for a commission or other consideration, directly or indirectly refers potential customers,

whether by a link on an Internet internet website or otherwise, to the retailer, provided the

cumulative gross receipts from sales by the retailer to customers in the state who are referred to the

retailer by all residents with this type of an agreement with the retailer, is in excess of five thousand

dollars ($5,000) during the preceding four (4) quarterly periods ending on the last day of March,

June, September and December. Such retailer shall be presumed to be soliciting business through

such independent contractor or other representative, which presumption may be rebutted by proof

that the resident with whom the retailer has an agreement did not engage in any solicitation in the

state on behalf of the retailer that would satisfy the nexus requirement of the United States

Constitution during such four (4) quarterly periods.

(3) Every person engaged in the business of making sales for storage, use, or other

consumption of: (1)(i) tangible personal property, (ii) sales at auction of tangible personal property

owned by the person or others, (iii) prewritten computer software delivered electronically or by

load and leave, (iv) vendor-hosted prewritten computer software, and (iv)(v) services as defined in

§ 44-18-7.3.

(4) A person conducting a horse race meeting with respect to horses, which are claimed

during the meeting.

(5) Every person engaged in the business of renting any living quarters in any hotel as

defined in § 42-63.1-2, rooming house, or tourist camp.

(6) Every person maintaining a business within or outside of this state who engages in the

regular or systematic solicitation of sales of tangible personal property, prewritten computer

software delivered electronically or by load and leave, vendor-hosted prewritten computer

software:

(i) Advertising in newspapers, magazines, and other periodicals published in this state, sold

over the counter in this state or sold by subscription to residents of this state, billboards located in

this state, airborne advertising messages produced or transported in the airspace above this state,

display cards and posters on common carriers or any other means of public conveyance

incorporated or operated primarily in this state, brochures, catalogs, circulars, coupons, pamphlets,

samples, and similar advertising material mailed to, or distributed within this state to residents of

this state;

(ii) Telephone;

(iii) Computer assisted shopping networks; and

(iv) Television, radio or any other electronic media, which is intended to be broadcast to

consumers located in this state.

(b) When the tax administrator determines that it is necessary for the proper administration

of chapters 18 and 19 of this title to regard any salespersons, representatives, truckers, peddlers, or

canvassers as the agents of the dealers, distributors, supervisors, employers, or persons under whom

they operate or from whom they obtain the tangible personal property sold by them, irrespective of

whether they are making sales on their own behalf or on behalf of the dealers, distributors,

supervisors, or employers, the tax administrator may so regard them and may regard the dealers,

distributors, supervisors, or employers as retailers for purposes of chapters 18 and 19 of this title.

44-18-20. Use tax imposed.

(a) An excise tax is imposed on the storage, use, or other consumption in this state of

tangible personal property; prewritten computer software delivered electronically or by load and

leave; vendor-hosted prewritten computer software; or services as defined in § 44-18-7.3, including

a motor vehicle, a boat, an airplane, or a trailer, purchased from any retailer at the rate of six percent

(6%) of the sale price of the property.

(b) An excise tax is imposed on the storage, use, or other consumption in this state of a

motor vehicle, a boat, an airplane, or a trailer purchased from other than a licensed motor vehicle

dealer or other than a retailer of boats, airplanes, or trailers respectively, at the rate of six percent

(6%) of the sale price of the motor vehicle, boat, airplane, or trailer.

defined in § 31-1-5(a) – (e)(f) and also includes boat trailers, camping trailers, house trailers, and

mobile homes.

(d) Notwithstanding the provisions contained in this section and in § 44-18-21 relating to

the imposition of a use tax and liability for this tax on certain casual sales, no tax is payable in any

casual sale:

(1) When the transferee or purchaser is the spouse, mother, father, brother, sister, or child

of the transferor or seller;

(2) When the transfer or sale is made in connection with the organization, reorganization,

dissolution, or partial liquidation of a business entity, provided:

(i) The last taxable sale, transfer, or use of the article being transferred or sold was subjected

to a tax imposed by this chapter;

(ii) The transferee is the business entity referred to or is a stockholder, owner, member, or

partner; and

(iii) Any gain or loss to the transferor is not recognized for income tax purposes under the

provisions of the federal income tax law and treasury regulations and rulings issued thereunder;

(3) When the sale or transfer is of a trailer, other than a camping trailer, of the type

ordinarily used for residential purposes and commonly known as a house trailer or as a mobile

home; or

(4) When the transferee or purchaser is exempt under the provisions of § 44-18-30 or other

general law of this state or special act of the general assembly of this state.

(e) The term "casual" means a sale made by a person other than a retailer, provided, that in

the case of a sale of a motor vehicle, the term means a sale made by a person other than a licensed

motor vehicle dealer or an auctioneer at an auction sale. In no case is the tax imposed under the

provisions of subsections (a) and (b) of this section on the storage, use, or other consumption in

this state of a used motor vehicle less than the product obtained by multiplying the amount of the

retail dollar value at the time of purchase of the motor vehicle by the applicable tax rate; provided,

that where the amount of the sale price exceeds the amount of the retail dollar value, the tax is

based on the sale price. The tax administrator shall use as his or her guide the retail dollar value as

shown in the current issue of any nationally recognized, used-vehicle guide for appraisal purposes

in this state. On request within thirty (30) days by the taxpayer after payment of the tax, if the tax

administrator determines that the retail dollar value as stated in this subsection is inequitable or

unreasonable, he or she shall, after affording the taxpayer reasonable opportunity to be heard, re-

determine the tax.

(f) Every person making more than five (5) retail sales of tangible personal property or

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or services as defined in § 44-18-7.3 during any twelve-month (12)

period, including sales made in the capacity of assignee for the benefit of creditors or receiver or

trustee in bankruptcy, is considered a retailer within the provisions of this chapter.

(g)(1) "Casual sale" includes a sale of tangible personal property not held or used by a

seller in the course of activities for which the seller is required to hold a seller's permit or permits

or would be required to hold a seller's permit or permits if the activities were conducted in this

state, provided that the sale is not one of a series of sales sufficient in number, scope, and character

(more than five (5) in any twelve-month (12) period) to constitute an activity for which the seller

is required to hold a seller's permit or would be required to hold a seller's permit if the activity were

conducted in this state.

(2) Casual sales also include sales made at bazaars, fairs, picnics, or similar events by

nonprofit organizations, that are organized for charitable, educational, civic, religious, social,

recreational, fraternal, or literary purposes during two (2) events not to exceed a total of six (6)

days duration each calendar year. Each event requires the issuance of a permit by the division of

taxation. Where sales are made at events by a vendor that holds a sales tax permit and is not a

nonprofit organization, the sales are in the regular course of business and are not exempt as casual

sales.

(h) The use tax imposed under this section for the period commencing July 1, 1990, is at

the rate of seven percent (7%). In recognition of the work being performed by the streamlined sales

and use tax governing board, upon passage of any federal law that authorizes states to require

remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the first (1st)

state fiscal quarter following the change, the rate imposed under § 44-18-18 shall be reduced from

seven percent (7.0%) to six and one-half percent (6.5%). The six and one- half percent (6.5%) rate

shall take effect on the date that the state requires remote sellers to collect and remit sales and use

taxes.

44-18-21. Liability for use tax.

(a) Every person storing, using, or consuming in this state tangible personal property,

including a motor vehicle, boat, airplane, or trailer, purchased from a retailer, and a motor vehicle,

boat, airplane, or trailer, purchased from other than a licensed motor vehicle dealer or other than a

retailer of boats, airplanes, or trailers respectively; or storing, using or consuming specified

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or services as defined in § 44-18-7.3 is liable for the use tax. The

person's liability is not extinguished until the tax has been paid to this state, except that a receipt

from a retailer engaging in business in this state or from a retailer who is authorized by the tax

administrator to collect the tax under rules and regulations that he or she may prescribe, given to

the purchaser pursuant to the provisions of § 44-18-22, is sufficient to relieve the purchaser from

further liability for the tax to which the receipt refers.

(b) Each person before obtaining an original or transferral registration for any article or

commodity in this state, which article or commodity is required to be licensed or registered in the

state, shall furnish satisfactory evidence to the tax administrator that any tax due under this chapter

with reference to the article or commodity has been paid, and for the purpose of effecting

compliance, the tax administrator, in addition to any other powers granted to him or her, may invoke

the provisions of § 31-3-4 in the case of a motor vehicle. The tax administrator, when he or she

deems it to be for the convenience of the general public, may authorize any agency of the state

concerned with the licensing or registering of these articles or commodities to collect the use tax

on any articles or commodities which the purchaser is required by this chapter to pay before

receiving an original or transferral registration. The general assembly shall annually appropriate a

sum that it deems necessary to carry out the purposes of this section. Notwithstanding the

provisions of §§ 44-18-19, 44-18-22, and 44-18-24, the sales or use tax on any motor vehicle and/or

recreational vehicle requiring registration by the administrator of the division of motor vehicles

shall not be added by the retailer to the sale price or charge but shall be paid directly by the

purchaser to the tax administrator, or his or her authorized deputy or agent as provided in this

section.

hundred twenty (120) days from the date of purchase and upon which the purchaser has paid the

use tax, the amount of the tax constitutes an overpayment. The amount of the overpayment may be

credited against the amount of use tax on any subsequent vehicle which the owner acquires to

replace the lost or destroyed vehicle or may be refunded, in whole or in part.

44-18-22. Collection of use tax by retailer.

Every retailer engaging in business in this state and making sales of tangible personal

property or prewritten computer software delivered electronically or by load and leave, or vendor-

hosted prewritten computer software, or services as defined in § 44-18-7.3, for storage, use, or other

consumption in this state, not exempted under this chapter shall, at the time of making the sales, or

if the storage, use, or other consumption of the tangible personal property, prewritten computer

software delivered electronically or by load and leave, vendor-hosted prewritten computer

software, or services as defined in § 44-18-7.3, is not then taxable under this chapter, at the time

the storage, use, or other consumption becomes taxable, collect the tax from the purchaser and give

to the purchaser a receipt in the manner and form prescribed by the tax administrator.

44-18-23. "Engaging in business" defined.

As used in §§ 44-18-21 and 44-18-22 the term "engaging in business in this state" means

the selling or delivering in this state, or any activity in this state related to the selling or delivering

in this state of tangible personal property or prewritten computer software delivered electronically

or by load and leave, or vendor-hosted prewritten computer software, for storage, use, or other

consumption in this state; or services as defined in § 44-18-7.3 in this state. This term includes, but

is not limited to, the following acts or methods of transacting business:

(1) Maintaining, occupying, or using in this state permanently or temporarily, directly or

indirectly or through a subsidiary, representative, or agent by whatever name called and whether or

not qualified to do business in this state, any office, place of distribution, sales or sample room or

place, warehouse or storage place, or other place of business;

(2) Having any subsidiary, representative, agent, salesperson, canvasser, or solicitor

permanently or temporarily, and whether or not the subsidiary, representative, or agent is qualified

to do business in this state, operate in this state for the purpose of selling, delivering, or the taking

of orders for any tangible personal property, or prewritten computer software delivered

electronically or by load and leave, or vendor-hosted prewritten computer software, or services as

defined in § 44-18-7.3;

(3) The regular or systematic solicitation of sales of tangible personal property, or

prewritten computer software delivered electronically or by load and leave, or vendor-hosted

prewritten computer software, or services as defined in § 44-18-7.3, in this state by means of:

(i) Advertising in newspapers, magazines, and other periodicals published in this state, sold

over the counter in this state or sold by subscription to residents of this state, billboards located in

this state, airborne advertising messages produced or transported in the air space above this state,

display cards and posters on common carriers or any other means of public conveyance

incorporated or operating primarily in this state, brochures, catalogs, circulars, coupons, pamphlets,

samples, and similar advertising material mailed to, or distributed within this state to residents of

this state;

(ii) Telephone;

(iii) Computer-assisted shopping networks; and

(iv) Television, radio or any other electronic media, which is intended to be broadcast to

consumers located in this state.

44-18-25. Presumption that sale is for storage, use, or consumption – Resale

certificate.

It is presumed that all gross receipts are subject to the sales tax, and that the use of all

tangible personal property, or prewritten computer software delivered electronically or by load and

leave, or vendor-hosted prewritten computer software, or services as defined in § 44-18-7.3, are

subject to the use tax, and that all tangible personal property, or prewritten computer software

delivered electronically or by load and leave, or vendor-hosted prewritten computer software, or

services as defined in § 44-18-7.3, sold or in processing or intended for delivery or delivered in this

state is sold or delivered for storage, use, or other consumption in this state, until the contrary is

established to the satisfaction of the tax administrator. The burden of proving the contrary is upon

the person who makes the sale and the purchaser, unless the person who makes the sale takes from

the purchaser a certificate to the effect that the purchase was for resale. The certificate shall contain

any information and be in the form that the tax administrator may require.

44-18-30. Gross receipts exempt from sales and use taxes.

There are exempted from the taxes imposed by this chapter the following gross receipts:

(1) Sales and uses beyond constitutional power of state. From the sale and from the storage,

use, or other consumption in this state of tangible personal property the gross receipts from the sale

of which, or the storage, use, or other consumption of which, this state is prohibited from taxing

under the Constitution of the United States or under the constitution of this state.

(2) Newspapers.

(i) From the sale and from the storage, use, or other consumption in this state of any

newspaper.

(ii) "Newspaper" means an unbound publication printed on newsprint that 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 that

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.

the contents or when resold for refilling.

(D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage

producers who place the alcoholic beverages in the containers.

(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

student 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); Vocational

Industrial Clubs of America (VICA); organized nonprofit golden age and senior citizens clubs for

men and women; and parent-teacher associations; and from the sale, storage, use, and other

consumption in this state, of and by the Industrial Foundation of Burrillville, a Rhode Island

domestic nonprofit corporation.

(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 that 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, or sales promotion, nor does it mean or include

distribution operations that 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 § 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 § 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 § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and

insulin whether or not sold on prescription. For purposes of this exemption drugs shall not include

over-the-counter drugs and grooming and hygiene products as defined in § 44-18-7.1(h)(iii).

(ii) Durable medical equipment as defined in § 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 that 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 § 44-18-7.1(t),

sold on prescription, including, but not limited to: artificial limbs, dentures, spectacles, eyeglasses,

and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on prescription;

and mobility enhancing equipment as defined in § 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 that 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 § 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 § 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 §§ 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 § 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 § 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 23 of title 23, respectively, and that 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 subsection (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 that is

empowered to confer diplomas, educational, literary, or academic degrees; that has a regular

faculty, curriculum, and organized body of pupils or students in attendance throughout the usual

school year; that keeps and furnishes to students and others records required and accepted for

entrance to schools of secondary, collegiate, or graduate rank; and 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) From the sale of: (a) Special adaptations, (b) The component parts of the special

adaptations, for a "wheelchair accessible taxicab" as defined in § 39-14-1, and/or a "wheelchair

accessible public motor vehicle" as defined in § 39-14.1-1.

(iv) 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 heating fuel.

(21) Electricity and gas. From the sale and from the storage, use, or other consumption in

this state of electricity and gas.

(22) Manufacturing machinery and equipment.

(i) From the sale and from the storage, use, or other consumption in this state of tools, dies,

molds, machinery, 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

that is not to be sold and that 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 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. 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 that has been put through a process of smelting or refining, including, but not limited

to: gold, silver, platinum, rhodium, and chromium, and that 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 that 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 watercraft that are in excess of five (5) net tons and

that 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 taking or

attempting to take any fish, shellfish, crustacea, or bait species with the intent of disposing of it 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 § 20-2-27.1 that 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; and (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; and (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 sales prior to October 1, 2012.

Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including

footwear, intended to be worn or carried on or about the human body up to two hundred and fifty

dollars ($250) of the sales price per item. 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). In

recognition of the work being performed by the streamlined sales and use tax governing board,

upon passage of any federal law that authorizes states to require remote sellers to collect and remit

sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. The

unlimited exemption on sales of clothing and footwear shall take effect on the date that the state

requires remote sellers to collect and remit sales and use taxes.

(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

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 §§ 44-19-1727 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 that 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 § 31-1-8 and is eligible for

registration displaying farm plates as provided for in § 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 subsection (18) of this section, and any

educational institution within the purview of § 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 § 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 § 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 that either: (i) Accompany the product that 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. § 2011 et seq.

(40) Transportation charges. From the sale or hiring of motor carriers as defined in § 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 subsection, "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 §§ 44-18-10, 44-18-11 and 44-18-20, the tax

imposed by § 44-18-20 is not applicable for the period commencing on the first day of October in

any year up 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 §§ 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 § 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. § 1 et seq. 851, 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 that suffers a disaster, as defined in this subdivision, in this state. "Disaster" means any

occurrence, natural or otherwise, that 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 that 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 § 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 § 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 §§ 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 § 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

that 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 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 §§ 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; and

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 § 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) Agricultural products for human consumption. From the sale and from the storage,

use, or other consumption of livestock and poultry of the kinds of products that ordinarily constitute

food for human consumption and of livestock of the kind the products of which ordinarily

constitutes constitute fibers for human use.

(62) Diesel emission control technology. From the sale and use of diesel retrofit technology

that is required by § 31-47.3-4.

(63) Feed for certain animals used in commercial farming. From the sale of feed for animals

as described in subsection (61) of this section.

(64) Alcoholic beverages. From the sale and storage, use, or other consumption in this state

by a Class A licensee of alcoholic beverages, as defined in § 44-18-7.1, excluding beer and malt

beverages; provided, further, notwithstanding § 6-13-1 or any other general or public law to the

contrary, alcoholic beverages, as defined in § 44-18-7.1, shall not be subject to minimum markup.

(65) Seeds and plants used to grow food and food ingredients. From the sale, storage, use,

or other consumption in this state of seeds and plants used to grow food and food ingredients as

defined in § 44-18-7.1(l)(i). "Seeds and plants used to grow food and food ingredients" shall not

include marijuana seeds or plants.

SECTION 11. Section 44-19-7 of the General Laws in Chapter 44-19 entitled "Sales and

Use Taxes - Enforcement and Collection" is hereby amended to read as follows:

44-19-7. Registration of retailers.

Every retailer selling tangible personal property or prewritten computer software delivered

electronically or by load and leave or vendor-hosted prewritten computer software for storage, use,

or other consumption in this state, as well as services as defined in § 44-18-7.3, in this state, or

renting living quarters in any hotel as defined in § 42-63.1-2, rooming house, or tourist camp in

this state must register with the tax administrator and give the name and address of all agents

operating in this state, the location of all distribution or sales houses or offices, or of any hotel as

defined in § 42-63.1-2, rooming house, or tourist camp or other places of business in this state, and

other information that the tax administrator may require.

SECTION 12. Section 44-20-13.2 of the General Laws in Chapter 44-20 entitled "Cigarette

and Other Tobacco Products Tax" is hereby amended to read as follows:

44-20-13.2. Tax imposed on other tobacco products, smokeless tobacco, cigars, and

pipe tobacco products.

(a) A tax is imposed on all other tobacco products, smokeless tobacco, cigars, and pipe

tobacco products sold, or held for sale in the state by any person, the payment of the tax to be

accomplished according to a mechanism established by the administrator, division of taxation,

department of revenue. The tax imposed by this section shall be as follows:

(1) At the rate of eighty percent (80%) of the wholesale cost of other tobacco products,

cigars, pipe tobacco products, and smokeless tobacco other than snuff.

(2) Notwithstanding the eighty percent (80%) rate in subsection (a) above, in the case of

cigars, the tax shall not exceed fifty cents ($.50) for each cigar.

(3) At the rate of one dollar ($1.00) per ounce of snuff, and a proportionate tax at the like

rate on all fractional parts of an ounce thereof. Such tax shall be computed based on the net weight

as listed by the manufacturer; provided, however, that any product listed by the manufacturer as

having a net weight of less than 1.2 ounces shall be taxed as if the product has a net weight of 1.2

ounces.

(b) Any dealer having in his or her possession any other tobacco products with respect to

the storage or use of which a tax is imposed by this section shall, within five (5) days after coming

into possession of the other tobacco products in this state, file a return with the tax administrator in

a form prescribed by the tax administrator. The return shall be accompanied by a payment of the

amount of the tax shown on the form to be due. Records required under this section shall be

preserved on the premises described in the relevant license in such a manner as to ensure

permanency and accessibility for inspection at reasonable hours by authorized personnel of the

administrator.

SECTION 13. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

44-30-2.6. Rhode Island taxable income -- Rate of tax.

(a) "Rhode Island taxable income" means federal taxable income as determined under the

Internal Revenue Code, 26 U.S.C. § 1 et seq., not including the increase in the basic, standard-

deduction amount for married couples filing joint returns as provided in the Jobs and Growth Tax

Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief Reconciliation Act of

2001 (EGTRRA), and as modified by the modifications in § 44-30-12.

(b) Notwithstanding the provisions of §§ 44-30-1 and 44-30-2, for tax years beginning on

or after January 1, 2001, a Rhode Island personal income tax is imposed upon the Rhode Island

taxable income of residents and nonresidents, including estates and trusts, at the rate of twenty-five

and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for tax year 2002

and thereafter of the federal income tax rates, including capital gains rates and any other special

rates for other types of income, except as provided in § 44-30-2.7, which were in effect immediately

prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA);

provided, rate schedules shall be adjusted for inflation by the tax administrator beginning in taxable

year 2002 and thereafter in the manner prescribed for adjustment by the commissioner of Internal

Revenue in 26 U.S.C. § 1(f). However, for tax years beginning on or after January 1, 2006, a

taxpayer may elect to use the alternative flat tax rate provided in § 44-30-2.10 to calculate his or

her personal income tax liability.

minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode Island

alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by

multiplying the federal tentative minimum tax without allowing for the increased exemptions under

the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal form 6251

Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%) for tax year

2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing the product

to the Rhode Island tax as computed otherwise under this section. The excess shall be the taxpayer's

Rhode Island alternative minimum tax.

(1) For tax years beginning on or after January 1, 2005, and thereafter, the exemption

amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by

the tax administrator in the manner prescribed for adjustment by the commissioner of Internal

Revenue in 26 U.S.C. § 1(f).

(2) For the period January 1, 2007, through December 31, 2007, and thereafter, Rhode

Island taxable income shall be determined by deducting from federal adjusted gross income as

defined in 26 U.S.C. § 62 as modified by the modifications in § 44-30-12 the Rhode Island

itemized-deduction amount and the Rhode Island exemption amount as determined in this section.

(A) Tax imposed.

(1) There is hereby imposed on the taxable income of married individuals filing joint

returns and surviving spouses a tax determined in accordance with the following table:

If taxable income is: The tax is:

Not over $53,150 3.75% of taxable income

Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the excess over $53,150

Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the excess over $128,500

Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the excess over $195,850

Over $349,700 $26,333.75 plus 9.90% of the excess over $349,700

(2) There is hereby imposed on the taxable income of every head of household a tax

determined in accordance with the following table:

If taxable income is: The tax is:

Not over $42,650 3.75% of taxable income

Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the excess over $42,650

Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the excess over $110,100

Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the excess over $178,350

Over $349,700 $27,031.75 plus 9.90% of the excess over $349,700

(3) There is hereby imposed on the taxable income of unmarried individuals (other than

surviving spouses and heads of households) a tax determined in accordance with the following

table:

If taxable income is: The tax is:

Not over $31,850 3.75% of taxable income

Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the excess over $31,850

Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the excess over $77,100

Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the excess over $160,850

Over $349,700 $27,849.00 plus 9.90% of the excess over $349,700

(4) There is hereby imposed on the taxable income of married individuals filing separate

returns and bankruptcy estates a tax determined in accordance with the following table:

If taxable income is: The tax is:

Not over $26,575 3.75% of taxable income

Over $26,575 but not over $64,250 $996.56 plus 7.00% of the excess over $26,575

Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the excess over $64,250

Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the excess over $97,925

Over $174,850 $13,166.88 plus 9.90% of the excess over $174,850

(5) There is hereby imposed a taxable income of an estate or trust a tax determined in

accordance with the following table:

If taxable income is: The tax is:

Not over $2,150 3.75% of taxable income

Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess over $2,150

Over $5,000 but not over $7,650 $280.13 plus 7.75% of the excess over $5,000

Over $7,650 but not over $10,450 $485.50 plus 9.00% of the excess over $7,650

Over $10,450 $737.50 plus 9.90% of the excess over $10,450

(6) Adjustments for inflation.

The dollars amount contained in paragraph (A) shall be increased by an amount equal to:

(a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by;

(b) The cost-of-living adjustment determined under section (J) with a base year of 1993;

adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall

be determined under section (J) by substituting "1994" for "1993."

(B) Maximum capital gains rates.

(1) In general.

If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax

imposed by this section for such taxable year shall not exceed the sum of:

(a) 2.5 % of the net capital gain as reported for federal income tax purposes under section

26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b).

(b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.

1(h)(1)(c).

U.S.C. 1(h)(1)(d).

(d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.

1(h)(1)(e).

(2) For tax years beginning on or after January 1, 2010, the tax imposed on net capital gain

shall be determined under subdivision 44-30-2.6(c)(2)(A).

(1) In general.

For the purposes of section (2), "itemized deductions" means the amount of federal

itemized deductions as modified by the modifications in § 44-30-12.

(2) Individuals who do not itemize their deductions.

In the case of an individual who does not elect to itemize his deductions for the taxable

year, they may elect to take a standard deduction.

(3) Basic standard deduction.

The Rhode Island standard deduction shall be allowed in accordance with the following

table:

Filing status Amount

Single $5,350

Married filing jointly or qualifying widow(er) $8,900

Married filing separately $4,450

Head of Household $7,850

(4) Additional standard deduction for the aged and blind.

An additional standard deduction shall be allowed for individuals age sixty-five (65) or

older or blind in the amount of $1,300 for individuals who are not married and $1,050 for

individuals who are married.

(5) Limitation on basic standard deduction in the case of certain dependents.

In the case of an individual to whom a deduction under section (E) is allowable to another

taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater of:

(a) $850;

(b) The sum of $300 and such individual's earned income;

(6) Certain individuals not eligible for standard deduction.

In the case of:

(a) A married individual filing a separate return where either spouse itemizes deductions;

(b) Nonresident alien individual;

The standard deduction shall be zero.

(7) Adjustments for inflation.

Each dollar amount contained in paragraphs (3), (4) and (5) shall be increased by an amount

equal to:

(a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988, multiplied

(b) The cost-of-living adjustment determined under section (J) with a base year of 1988.

(D) Overall limitation on itemized deductions.

(1) General rule.

In the case of an individual whose adjusted gross income as modified by § 44-30-12

exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the

taxable year shall be reduced by the lesser of:

(a) Three percent (3%) of the excess of adjusted gross income as modified by § 44-30-12

over the applicable amount; or

(b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable for

such taxable year.

(2) Applicable amount.

(a) In general.

For purposes of this section, the term "applicable amount" means $156,400 ($78,200 in the

case of a separate return by a married individual)

(b) Adjustments for inflation.

Each dollar amount contained in paragraph (a) shall be increased by an amount equal to:

(i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by

(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.

(3) Phase-out of Limitation.

(a) In general.

In the case of taxable year beginning after December 31, 2005, and before January 1, 2010,

the reduction under section (1) shall be equal to the applicable fraction of the amount which would

be the amount of such reduction.

(b) Applicable fraction.

For purposes of paragraph (a), the applicable fraction shall be determined in accordance

with the following table:

For taxable years beginning in calendar year The applicable fraction is

2006 and 2007 2/3

2008 and 2009 1/3

(E) Exemption amount.

(1) In general.

Except as otherwise provided in this subsection, the term "exemption amount" means

$3,400.

(2) Exemption amount disallowed in case of certain dependents.

In the case of an individual with respect to whom a deduction under this section is allowable

to another taxpayer for the same taxable year, the exemption amount applicable to such individual

for such individual's taxable year shall be zero.

(3) Adjustments for inflation.

The dollar amount contained in paragraph (1) shall be increased by an amount equal to:

(a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by

(b) The cost-of-living adjustment determined under section (J) with a base year of 1989.

(4) Limitation.

(a) In general.

In the case of any taxpayer whose adjusted gross income as modified for the taxable year

exceeds the threshold amount shall be reduced by the applicable percentage.

(b) Applicable percentage.

In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the

threshold amount, the exemption amount shall be reduced by two (2) percentage points for each

$2,500 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year

exceeds the threshold amount. In the case of a married individual filing a separate return, the

preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no event shall the

applicable percentage exceed one hundred percent (100%).

For the purposes of this paragraph, the term "threshold amount" shall be determined with

the following table:

Filing status Amount

Single $156,400

Married filing jointly of qualifying widow(er) $234,600

Married filing separately $117,300

Head of Household $195,500

(d) Adjustments for inflation.

Each dollar amount contained in paragraph (b) shall be increased by an amount equal to:

(i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by

(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.

(5) Phase-out of limitation.

(a) In general.

In the case of taxable years beginning after December 31, 2005, and before January 1,

2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which

would be the amount of such reduction.

(b) Applicable fraction.

For the purposes of paragraph (a), the applicable fraction shall be determined in accordance

with the following table:

For taxable years beginning in calendar year The applicable fraction is

2006 and 2007 2/3

2008 and 2009 1/3

(F) Alternative minimum tax.

(1) General rule. There is hereby imposed (in addition to any other tax imposed by this

subtitle) a tax equal to the excess (if any) of:

(a) The tentative minimum tax for the taxable year, over

(b) The regular tax for the taxable year.

(2) The tentative minimum tax for the taxable year is the sum of:

(a) 6.5 percent of so much of the taxable excess as does not exceed $175,000, plus

(b) 7.0 percent of so much of the taxable excess above $175,000.

(3) The amount determined under the preceding sentence shall be reduced by the alternative

minimum tax foreign tax credit for the taxable year.

(4) Taxable excess. For the purposes of this subsection the term "taxable excess" means so

much of the federal alternative minimum taxable income as modified by the modifications in § 44-

30-12 as exceeds the exemption amount.

(5) In the case of a married individual filing a separate return, subparagraph (2) shall be

applied by substituting "$87,500" for $175,000 each place it appears.

(6) Exemption amount.

For purposes of this section "exemption amount" means:

Filing status Amount

Single $39,150

Married filing jointly or qualifying widow(er) $53,700

Married filing separately $26,850

Head of Household $39,150

Estate or trust $24,650

(7) Treatment of unearned income of minor children

(a) In general.

In the case of a minor child, the exemption amount for purposes of section (6) shall not

exceed the sum of:

(i) Such child's earned income, plus

(ii) $6,000.

(8) Adjustments for inflation.

The dollar amount contained in paragraphs (6) and (7) shall be increased by an amount

equal to:

(a) Such dollar amount contained in paragraphs (6) and (7) in the year 2004, multiplied by

(b) The cost-of-living adjustment determined under section (J) with a base year of 2004.

(9) Phase-out.

(a) In general.

The exemption amount of any taxpayer shall be reduced (but not below zero) by an amount

equal to twenty-five percent (25%) of the amount by which alternative minimum taxable income

of the taxpayer exceeds the threshold amount.

(b) Threshold amount.

For purposes of this paragraph, the term "threshold amount" shall be determined with the

following table:

Filing status Amount

Single $123,250

Married filing jointly or qualifying widow(er) $164,350

Married filing separately $82,175

Head of Household $123,250

Estate or Trust $82,150

Each dollar amount contained in paragraph (9) shall be increased by an amount equal to:

(i) Such dollar amount contained in paragraph (9) in the year 2004, multiplied by

(ii) The cost-of-living adjustment determined under section (J) with a base year of 2004.

(G) Other Rhode Island taxes.

(1) General rule. There is hereby imposed (in addition to any other tax imposed by this

subtitle) a tax equal to twenty-five percent (25%) of:

(a) The Federal income tax on lump-sum distributions.

(b) The Federal income tax on parents' election to report child's interest and dividends.

return.

(H) Tax for children under 18 with investment income.

(1) General rule. There is hereby imposed a tax equal to twenty-five percent (25%) of:

(a) The Federal tax for children under the age of 18 with investment income.

(I) Averaging of farm income.

(1) General rule. At the election of an individual engaged in a farming business or fishing

business, the tax imposed in section 2 shall be equal to twenty-five percent (25%) of:

(a) The Federal averaging of farm income as determined in IRC section 1301 [26 U.S.C. §

1301].

(J) Cost-of-living adjustment.

(1) In general.

The cost-of-living adjustment for any calendar year is the percentage (if any) by which:

(a) The CPI for the preceding calendar year exceeds

(b) The CPI for the base year.

(2) CPI for any calendar year.

For purposes of paragraph (1), the CPI for any calendar year is the average of the consumer

price index as of the close of the twelve (12) month period ending on August 31 of such calendar

year.

(3) Consumer price index.

For purposes of paragraph (2), the term "consumer price index" means the last consumer

price index for all urban consumers published by the department of labor. For purposes of the

preceding sentence, the revision of the consumer price index that is most consistent with the

consumer price index for calendar year 1986 shall be used.

(4) Rounding.

(a) In general.

If any increase determined under paragraph (1) is not a multiple of $50, such increase shall

be rounded to the next lowest multiple of $50.

(b) In the case of a married individual filing a separate return, subparagraph (a) shall be

applied by substituting "$25" for $50 each place it appears.

(K) Credits against tax. For tax years beginning on or after January 1, 2001, a taxpayer

entitled to any of the following federal credits enacted prior to January 1, 1996 shall be entitled to

a credit against the Rhode Island tax imposed under this section:

(1) [Deleted by P.L. 2007, ch. 73, art. 7, § 5].

(2) Child and dependent care credit;

(3) General business credits;

(4) Credit for elderly or the disabled;

(5) Credit for prior year minimum tax;

(6) Mortgage interest credit;

(7) Empowerment zone employment credit;

(8) Qualified electric vehicle credit.

(L) Credit against tax for adoption. For tax years beginning on or after January 1, 2006, a

taxpayer entitled to the federal adoption credit shall be entitled to a credit against the Rhode Island

tax imposed under this section if the adopted child was under the care, custody, or supervision of

the Rhode Island department of children, youth and families prior to the adoption.

(M) The credit shall be twenty-five percent (25%) of the aforementioned federal credits

provided there shall be no deduction based on any federal credits enacted after January 1, 1996,

including the rate reduction credit provided by the federal Economic Growth and Tax

Reconciliation Act of 2001 (EGTRRA). In no event shall the tax imposed under this section be

reduced to less than zero. A taxpayer required to recapture any of the above credits for federal tax

purposes shall determine the Rhode Island amount to be recaptured in the same manner as

prescribed in this subsection.

(N) Rhode Island earned-income credit.

(1) In general.

For tax years beginning before January 1, 2015, a taxpayer entitled to a federal earned-

income credit shall be allowed a Rhode Island earned-income credit equal to twenty-five percent

(25%) of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode

Island income tax.

For tax years beginning on or after January 1, 2015, and before January 1, 2016, a taxpayer

entitled to a federal earned-income credit shall be allowed a Rhode Island earned-income credit

equal to ten percent (10%) of the federal earned-income credit. Such credit shall not exceed the

amount of the Rhode Island income tax.

For tax years beginning on or after January 1, 2016, a taxpayer entitled to a federal earned-

income credit shall be allowed a Rhode Island earned-income credit equal to twelve and one-half

percent (12.5%) of the federal earned-income credit. Such credit shall not exceed the amount of the

Rhode Island income tax.

For tax years beginning on or after January 1, 2017, a taxpayer entitled to a federal earned-

income credit shall be allowed a Rhode Island earned-income credit equal to fifteen percent (15%)

of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode Island

income tax.

(2) Refundable portion.

In the event the Rhode Island earned-income credit allowed under paragraph (N)(1) of this

section exceeds the amount of Rhode Island income tax, a refundable earned-income credit shall

be allowed as follows.

(i) For tax years beginning before January 1, 2015, for purposes of paragraph (2) refundable

earned-income credit means fifteen percent (15%) of the amount by which the Rhode Island earned-

income credit exceeds the Rhode Island income tax.

(ii) For tax years beginning on or after January 1, 2015, for purposes of paragraph (2)

refundable earned-income credit means one hundred percent (100%) of the amount by which the

Rhode Island earned-income credit exceeds the Rhode Island income tax.

(O) The tax administrator shall recalculate and submit necessary revisions to paragraphs

(A) through (J) to the general assembly no later than February 1, 2010 and every three (3) years

thereafter for inclusion in the statute.

(3) For the period January 1, 2011 through December 31, 2011, and thereafter, "Rhode

Island taxable income" means federal adjusted gross income as determined under the Internal

Revenue Code, 26 U.S.C. 1 et seq., and as modified for Rhode Island purposes pursuant to § 44-

30-12 less the amount of Rhode Island Basic Standard Deduction allowed pursuant to subparagraph

44-30-2.6(c)(3)(B), and less the amount of personal exemption allowed pursuant to subparagraph

44-30-2.6(c)(3)(C).

(A) Tax imposed.

(I) There is hereby imposed on the taxable income of married individuals filing joint

returns, qualifying widow(er), every head of household, unmarried individuals, married individuals

filing separate returns and bankruptcy estates, a tax determined in accordance with the following

table:

RI Taxable Income RI Income Tax

Over But not over Pay +% on Excess on the amount over

$0 - $ 55,000 $ 0 + 3.75% $0

55,000 - 125,000 2,063 + 4.75% 55,000

125,000 - 5,388 + 5.99% 125,000

(II) There is hereby imposed on the taxable income of an estate or trust a tax determined in

accordance with the following table:

RI Taxable Income RI Income Tax

Over But not over Pay + % on Excess on the amount over

$0 - $ 2,230 $ 0 + 3.75% $0

2,230 - 7,022 84 + 4.75% 2,230

7,022 - 312 + 5.99% 7,022

(B) Deductions:

(I) Rhode Island Basic Standard Deduction. Only the Rhode Island standard deduction shall

be allowed in accordance with the following table:

Filing status: Amount

Single $7,500

Married filing jointly or qualifying widow(er) $15,000

Married filing separately $7,500

Head of Household $11,250

(II) Nonresident alien individuals, estates and trusts are not eligible for standard

deductions.

(III) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island

purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand

dollars ($175,000), the standard deduction amount shall be reduced by the applicable percentage.

The term "applicable percentage" means twenty (20) percentage points for each five thousand

dollars ($5,000) (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable

year exceeds one hundred seventy-five thousand dollars ($175,000).

(I) The term "exemption amount" means three thousand five hundred dollars ($3,500)

multiplied by the number of exemptions allowed for the taxable year for federal income tax

purposes. For tax years beginning on or after 2018, the term "exemption amount" means the same

as it does in 26 USC § 151 and 26 USC § 152 just prior to the enactment of the Tax Cuts and Jobs

Act (Pub. L. 115-97) on December 22, 2017.

(II) Exemption amount disallowed in case of certain dependents. In the case of an

individual with respect to whom a deduction under this section is allowable to another taxpayer for

the same taxable year, the exemption amount applicable to such individual for such individual's

taxable year shall be zero.

(III) Identifying information required.

(1) Except as provided in § 44-30-2.6(c)(3)(C)(II) of this section, no exemption shall be

allowed under this section with respect to any individual unless the Taxpayer Identification Number

of such individual is included on the federal return claiming the exemption for the same tax filing

period.

(2) Notwithstanding the provisions of § 44-30-2.6(c)(3)(C)(I) of this section, in the event

that the Taxpayer Identification Number for each individual is not required to be included on the

federal tax return for the purposes of claiming a person personal exemption(s), then the Taxpayer

Identification Number must be provided on the Rhode Island tax return for the purpose of claiming

said exemption(s).

(D) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island

purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand

dollars ($175,000), the exemption amount shall be reduced by the applicable percentage. The term

"applicable percentage" means twenty (20) percentage points for each five thousand dollars

($5,000) (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year

exceeds one hundred seventy-five thousand dollars ($175,000).

(E) Adjustment for inflation. The dollar amount contained in subparagraphs 44-30-

2.6(c)(3)(A), 44-30-2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) shall be increased annually by an amount

equal to:

(I) Such dollar amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30-2.6(c)(3)(B)

and 44-30-2.6(c)(3)(C) adjusted for inflation using a base tax year of 2000, multiplied by;

(II) The cost-of-living adjustment with a base year of 2000.

(III) For the purposes of this section, the cost-of-living adjustment for any calendar year is

the percentage (if any) by which the consumer price index for the preceding calendar year exceeds

the consumer price index for the base year. The consumer price index for any calendar year is the

average of the consumer price index as of the close of the twelve-month (12) period ending on

August 31, of such calendar year.

(IV) For the purpose of this section the term "consumer price index" means the last

consumer price index for all urban consumers published by the department of labor. For the purpose

of this section the revision of the consumer price index that is most consistent with the consumer

price index for calendar year 1986 shall be used.

(V) If any increase determined under this section is not a multiple of fifty dollars ($50.00),

such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a

married individual filing separate return, if any increase determined under this section is not a

multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple

of twenty-five dollars ($25.00).

(F) Credits against tax.

(I) Notwithstanding any other provisions of Rhode Island Law, for tax years beginning on

or after January 1, 2011, the only credits allowed against a tax imposed under this chapter shall be

as follows:

(a) Rhode Island earned-income credit: Credit shall be allowed for earned-income credit

pursuant to subparagraph 44-30-2.6(c)(2)(N).

(b) Property Tax Relief Credit: Credit shall be allowed for property tax relief as provided

in § 44-33-1 et seq.

credit as provided in § 44-30.3-1 et seq.

(d) Credit for income taxes of other states. Credit shall be allowed for income tax paid to

other states pursuant to § 44-30-74.

(e) Historic Structures Tax Credit: Credit shall be allowed for historic structures tax credit

as provided in § 44-33.2-1 et seq.

(f) Motion Picture Productions Tax Credit: Credit shall be allowed for motion picture

production tax credit as provided in § 44-31.2-1 et seq.

(g) Child and Dependent Care: Credit shall be allowed for twenty-five percent (25%) of

the federal child and dependent care credit allowable for the taxable year for federal purposes;

provided, however, such credit shall not exceed the Rhode Island tax liability.

(h) Tax credits for contributions to Scholarship Organizations: Credit shall be allowed for

contributions to scholarship organizations as provided in chapter 62 of title 44.

(i) Credit for tax withheld. Wages upon which tax is required to be withheld shall be taxable

as if no withholding were required, but any amount of Rhode Island personal income tax actually

deducted and withheld in any calendar year shall be deemed to have been paid to the tax

administrator on behalf of the person from whom withheld, and the person shall be credited with

having paid that amount of tax for the taxable year beginning in that calendar year. For a taxable

year of less than twelve (12) months, the credit shall be made under regulations of the tax

administrator.

(j) Stay Invested in RI Wavemaker Fellowship: Credit shall be allowed for stay invested in

RI wavemaker fellowship program as provided in § 42-64.26-1 et seq.

(k) Rebuild Rhode Island: Credit shall be allowed for rebuild RI tax credit as provided in

§ 42-64.20-1 et seq.

(l) Rhode Island Qualified Jobs Incentive Program: Credit shall be allowed for Rhode

Island new qualified jobs incentive program credit as provided in § 44-48.3-1 et seq.

(m) Historic homeownership assistance act: Effective for tax year 2017 and thereafter,

unused carryforward for such credit previously issued shall be allowed for the historic

homeownership assistance act as provided in § 44-33.1-4. This allowance is for credits already

issued pursuant to § 44-33.1-4 and shall not be construed to authorize the issuance of new credits

under the historic homeownership assistance act.

(2) Except as provided in section 1 above, no other state and federal tax credit shall be

available to the taxpayers in computing tax liability under this chapter.

SECTION 14. Section 44-1-2 of the General Laws in Chapter 44-1 entitled "State Tax

Officials" is hereby amended to read as follows:

44-1-2. Powers and duties of tax administrator.

The tax administrator is required:

(1) To assess and collect all taxes previously assessed by the division of state taxation in

the department of revenue and regulation, including the franchise tax on domestic corporations,

corporate excess tax, tax upon gross earnings of public service corporations, tax upon interest

bearing deposits in national banks, the inheritance tax, tax on gasoline and motor fuels, and tax on

the manufacture of alcoholic beverages;

(2) To assess and collect the taxes upon banks and insurance companies previously

administered by the division of banking and insurance in the department of revenue and regulation,

including the tax on foreign and domestic insurance companies, tax on foreign building and loan

associations, deposit tax on savings banks, and deposit tax on trust companies;

(3) To assess and collect the tax on pari-mutuel or auction mutuel betting, previously

administered by the division of horse racing in the department of revenue and regulation.;

(4) [Deleted by P.L. 2006, ch. 246, art. 38, § 10].

(5) To assess and collect the monthly surcharges that are collected by telecommunication

services providers pursuant to § 39-21.1-14 and are remitted to the division of taxation.;

(6) To audit, assess, and collect all unclaimed intangible and tangible property pursuant to

chapter 21.1 of title 33.;

(7) To provide to the department of labor and training any state tax information, state

records, or state documents they or the requesting agency certify as necessary to assist the agency

in efforts to investigate suspected misclassification of employee status, wage and hour violations,

or prevailing wage violations subject to the agency's jurisdiction, even if deemed confidential under

applicable law, provided that the confidentiality of such materials shall be maintained, to the extent

required of the releasing department by any federal or state law or regulation, by all state

departments to which the materials are released and no such information shall be publicly disclosed,

except to the extent necessary for the requesting department or agency to adjudicate a violation of

applicable law. The certification must include a representation that there is probable cause to

believe that a violation has occurred. State departments sharing this information or materials may

enter into written agreements via memorandums of understanding to ensure the safeguarding of

such released information or materials.; and

(8) To preserve the Rhode Island tax base under Rhode Island law prior to the December

22, 2017, Congressional enactment of Public Law 115-97, The Tax Cuts and Jobs Act, the tax

administrator, upon prior written notice to the speaker of the house, senate president, and

chairpersons of the house and senate finance committees, is specifically authorized to amend tax

forms and related instructions in response to any changes the Internal Revenue Service makes to

its forms, regulations, and/or processing which will materially impact state revenues, to the extent

that impact is measurable. Any Internal Revenue Service changes to forms, regulations, and/or

processing which go into effect during the current tax year or within six (6) months of the beginning

of the next tax year and which will materially impact state revenue will be deemed grounds for the

promulgation of emergency rules and regulations under Rhode Island General Laws § 42-35-2.10.

The provisions of this subsection (8) shall sunset on December 31, 2021.

SECTION 15. Sections 42-63.1-3 and 42-63.1-12 of the General Laws in Chapter 42-63.1

entitled "Tourism and Development" are hereby amended to read as follows:

42-63.1-3. Distribution of tax.

(a) For returns and tax payments received on or before December 31, 2015, except as

provided in § 42-63.1-12, the proceeds of the hotel tax, excluding such portion of the hotel tax

collected from residential units offered for tourist or transient use through a hosting platform, shall

be distributed as follows by the division of taxation and the city of Newport:

(1) Forty-seven percent (47%) of the tax generated by the hotels in the district, except as

otherwise provided in this chapter, shall be given to the regional tourism district wherein the hotel

is located; provided, however, that from the tax generated by the hotels in the city of Warwick,

thirty-one percent (31%) of the tax shall be given to the Warwick regional tourism district

established in § 42-63.1-5(a)(5) and sixteen percent (16%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors' Bureau established in § 42-63.1-11; and provided

further, that from the tax generated by the hotels in the city of Providence, sixteen percent (16%)

of that tax shall be given to the Greater Providence-Warwick Convention and Visitors' Bureau

established by § 42-63.1-11, and thirty-one percent (31%) of that tax shall be given to the

Convention Authority of the city of Providence established pursuant to the provisions of chapter

84 of the public laws of January, 1980; provided, however, that the receipts attributable to the

district as defined in § 42-63.1-5(a)(7) shall be deposited as general revenues, and that the receipts

attributable to the district as defined in § 42-63.1-5(a)(8) shall be given to the Rhode Island

commerce corporation as established in chapter 64 of title 42.

(2) Twenty-five percent (25%) of the hotel tax shall be given to the city or town where the

hotel, which generated the tax, is physically located, to be used for whatever purpose the city or

town decides.

(3) Twenty-one (21%) of the hotel tax shall be given to the Rhode Island commerce

corporation established in chapter 64 of title 42, and seven percent (7%) to the Greater Providence-

Warwick Convention and Visitors' Bureau.

(b) For returns and tax payments received after December 31, 2015, except as provided in

§ 42-63.1-12, the proceeds of the hotel tax, excluding such portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

(1) For the tax generated by the hotels in the Aquidneck Island district, as defined in § 42-

63.1-5, forty-two percent (42%) of the tax shall be given to the Aquidneck Island district, twenty-

five (25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-eight percent (28%) of

the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title

42.

(2) For the tax generated by the hotels in the Providence district as defined in § 42-63.1-5,

twenty eight percent (28%) of the tax shall be given to the Providence district, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, twenty-three (23%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-four (24%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

(3) For the tax generated by the hotels in the Warwick district as defined in § 42-63.1-5,

twenty-eight percent (28%) of the tax shall be given to the Warwick District, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, twenty-three percent (23%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-four (24%) of

the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title

42.

(4) For the tax generated by the hotels in the Statewide district, as defined in § 42-63.1-5,

twenty-five percent (25%) of the tax shall be given to the city or town where the hotel, which

generated the tax, is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy

percent (70%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of title 42.

(5) With respect to the tax generated by hotels in districts other than those set forth in

subdivisions (b)(1) through (b)(4), forty-two percent (42%) of the tax shall be given to the regional

tourism district, as defined in § 42-63.1-5, wherein the hotel is located, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick Convention

and Visitors Bureau established in § 42-63.1-11, and twenty-eight (28%) of the tax shall be given

to the Rhode Island commerce corporation established in chapter 64 of title 42.

transient use through a hosting platform shall be distributed as follows by the division of taxation

and the city of Newport: twenty-five percent (25%) of the tax shall be given to the city or town

where the residential unit, which generated the tax, is physically located, and seventy-five percent

(75%) of the tax shall be given to the Rhode Island commerce corporation established in chapter

64 of title 42.

(d) The Rhode Island commerce corporation shall be required in each fiscal year to spend

on the promotion and marketing of Rhode Island as a destination for tourists or businesses an

amount of money of no less than the total proceeds of the hotel tax it receives pursuant to this

chapter for such fiscal year.

(e) Notwithstanding the foregoing provisions of this section, for returns and tax payments

received on or after July 1, 2016, and on or before June 30, 2017, except as provided in § 42-63.1-

12, the proceeds of the hotel tax, excluding such portion of the hotel tax collected from residential

units offered for tourist or transient use through a hosting platform, shall be distributed in

accordance with the distribution percentages established in § 42-63.1-3 subsections (a)(1) through

§ 42-63.1-3(a)(3) of this section by the division of taxation and the city of Newport.

(f) For returns and tax payments received on or after July 1, 2018, except as provided in §

42-63.1-12, the proceeds of the hotel tax, excluding such portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

(1) For the tax generated by the hotels in the Aquidneck Island district, as defined in § 42-

63.1-5, forty-five percent (45%) of the tax shall be given to the Aquidneck Island district, twenty-

five (25%) of the tax shall be given to the city or town where the hotel, which generated the tax, is

physically located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five percent (25%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

(2) For the tax generated by the hotels in the Providence district as defined in § 42-63.1-5,

thirty percent (30%) of the tax shall be given to the Providence district, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, twenty-four (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one (21%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

(3) For the tax generated by the hotels in the Warwick district as defined in § 42-63.1-5,

thirty percent (30%) of the tax shall be given to the Warwick District, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one (21%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of title 42.

(4) For the tax generated by the hotels in the Statewide district, as defined in § 42-63.1-5,

twenty-five percent (25%) of the tax shall be given to the city or town where the hotel, which

generated the tax, is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy

percent (70%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of title 42.

(5) With respect to the tax generated by hotels in districts other than those set forth in

subdivisions (b)(1) through (b)(4), forty-five percent (45%) of the tax shall be given to the regional

tourism district, as defined in § 42-63.1-5, wherein the hotel is located, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel, which generated the tax, is physically

located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick Convention

and Visitors Bureau established in § 42-63.1-11, and twenty-five (25%) of the tax shall be given to

the Rhode Island commerce corporation established in chapter 64 of title 42.

42-63.1-12. Distribution of tax to Rhode Island Convention Center Authority.

(a) For returns and tax received on or before December 31, 2015, the proceeds of the hotel

tax generated by any and all hotels physically connected to the Rhode Island Convention Center

shall be distributed as follows: twenty-seven percent (27%) shall be deposited as general revenues;

thirty-one percent (31%) shall be given to the convention authority of the city of Providence; twelve

percent (12%) shall be given to the greater Providence-Warwick convention and visitor's bureau;

thirty percent (30%) shall be given to the Rhode Island convention center authority to be used in

the furtherance of the purposes set forth in § 42-99-4.

(b) For returns and tax received after December 31, 2015, the proceeds of the hotel tax

generated by any and all hotels physically connected to the Rhode Island Convention Center shall

be distributed as follows: twenty-eight percent (28%) shall be given to the convention authority of

the city of Providence; twelve percent (12%) shall be given to the greater Providence-Warwick

convention and visitor's bureau; and sixty percent (60%) shall be given to the Rhode Island

Commerce Corporation established in chapter 64 of title 42.

into contracts with the Greater Providence-Warwick Convention and Visitors' Bureau in the

furtherance of the purposes set forth in this chapter.

(d) For returns and tax received on or after July 1, 2018, the proceeds of the hotel tax

generated by any and all hotels physically connected to the Rhode Island Convention Center shall

be distributed as follows: thirty percent (30%) shall be given to the convention authority of the city

of Providence; twenty percent (20%) shall be given to the greater Providence-Warwick convention

and visitor’s bureau; and fifty percent (50%) shall be given to the Rhode Island Commerce

Corporation established in chapter 64 of title 42.

SECTION 16. Severability. -- If any provisions of the article or the application thereof to

any person or circumstances is held invalid, such invalidity shall not affect any other provisions or

applications of this article, which can be given effect without the invalid provision or application,

and to this end the provisions of this article are declared to be severable.

SECTION 17. Sections 2 through Section 7 shall take effect upon passage. Section 13 shall

take effect for tax years on or after January 1, 2018. Section 11 shall take effect on October 1, 2018.

Section 10, as it pertains to vendor-hosted prewritten software, shall take effect as of October 1,

2018. The remainder of Section 10 and the remainder of this article shall take effect as of July 1,

2018.