law26210

Chapter 210

2026 -- H 7242
Enacted 06/19/2026

A N A C T

RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION

Introduced By: Representatives McGaw, Fogarty, Potter, Sanchez, Hull, Diaz, Giraldo, Stewart, Boylan, and Cotter

Date Introduced: January 21, 2026

It is enacted by the General Assembly as follows:

SECTION 1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property

Subject to Taxation" is hereby amended to read as follows:

44-3-3. Property exempt.

(a) The following property is exempt from taxation:

(1) Property belonging to the state, except as provided in § 44-4-4.1;

(2) Lands ceded or belonging to the United States;

(3) Bonds and other securities issued and exempted from taxation by the government of

the United States or of this state;

(4) Real estate, used exclusively for military purposes, owned by chartered or incorporated

organizations approved by the adjutant general and composed of members of the national guard,

the naval militia, or the independent, chartered-military organizations;

(5) Buildings for free public schools, buildings for religious worship, and the land upon

which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so

far as the buildings and land are occupied and used exclusively for religious or educational

purposes;

(6) Dwellings houses and the land on which they stand, not exceeding one acre in size, or

the minimum lot size for zone in which the dwelling house is located, whichever is the greater,

owned by, or held in trust for, any religious organization and actually used by its officiating clergy;

provided, further, that in the town of Charlestown, where the property previously described in this

paragraph is exempt in total, along with dwelling houses and the land on which they stand in

Charlestown, not exceeding one acre in size, or the minimum lot size for zone in which the dwelling

house is located, whichever is the greater, owned by, or held in trust for, any religious organization

and actually used by its officiating clergy, or used as a convent, nunnery, or retreat center by its

religious order;

(7) Intangible personal property owned by, or held in trust for, any religious or charitable

organization, if the principal or income is used or appropriated for religious or charitable purposes;

(8) Buildings and personal estate owned by any corporation used for a school, academy, or

seminary of learning, and of any incorporated public charitable institution, and the land upon which

the buildings stand and immediately surrounding them to an extent not exceeding one acre, so far

as they are used exclusively for educational purposes, but no property or estate whatever is hereafter

exempt from taxation in any case where any part of its income or profits, or of the business carried

on there, is divided among its owners or stockholders; provided, however, that unless any private

nonprofit corporation organized as a college or university located in the town of Smithfield reaches

a memorandum of agreement with the town of Smithfield, the town of Smithfield shall bill the

actual costs for police, fire, and rescue services supplied, unless otherwise reimbursed, to said

corporation commencing March 1, 2014;

(9) Estates, persons, and families of the president and professors for the time being of

Brown University for not more than ten thousand dollars ($10,000) for each officer, the officer’s

estate, person, and family included, but only to the extent that any person had claimed and utilized

the exemption prior to, and for a period ending, either on or after December 31, 1996;

(10) Property especially exempt by charter unless the exemption has been waived in whole

or in part; provided that, notwithstanding any provision of a charter or act of incorporation or other

law to the contrary, any real and personal property (or portion thereof) of a healthcare facility,

and/or any parent corporation, operator, manager, or subsidiary thereof, or of an institution of

higher education, that would otherwise be exempted from property taxation that is leased to,

subleased to, occupied or used by an entity, organization, or individual that is not itself exempted

from property taxation shall be taxed to the tenant, who, for the purposes of taxation is deemed the

owner;

(11) Lots of land exclusively for burial grounds;

(12) Property, real and personal, held for, or by, an incorporated library, society, or any

free public library, or any free public library society, so far as the property is held exclusively for

library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor

generally, or for a nonprofit hospital for the sick or disabled;

(13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated

organizations of veterans of any war in which the United States has been engaged, the parent body

of which has been incorporated by act of Congress, to the extent of four hundred thousand dollars

($400,000) if actually used and occupied by the association; provided, that the city council of the

city of Cranston may by ordinance exempt the real or personal estate as previously described in

this subdivision located within the city of Cranston to the extent of five hundred thousand dollars

($500,000);

(14) Property, real and personal, held for, or by, the fraternal corporation, association, or

body created to build and maintain a building or buildings for its meetings or the meetings of the

general assembly of its members, or subordinate bodies of the fraternity, and for the

accommodation of other fraternal bodies or associations, the entire net income of which real and

personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or

asylums, a home or homes, a school or schools, for the free education or relief of the members of

the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity, their

wives, widows, or orphans, and any fund given or held for the purpose of public education,

almshouses, and the land and buildings used in connection therewith;

(15) Real estate and personal property of any incorporated volunteer fire engine company

or incorporated volunteer ambulance or rescue corps in active service;

(16) The estate of any person who, in the judgment of the assessors, is unable from infirmity

or poverty to pay the tax; provided, that in the towns of Burrillville and West Greenwich, the tax

shall constitute a lien for five (5) years on the property where the owner is entitled to the exemption.

At the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold

or conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the

lien immediately becomes due and payable; any person claiming the exemption aggrieved by an

adverse decision of an assessor shall appeal the decision to the local board of tax review and

thereafter according to the provisions of § 44-5-26;

(17) Household furniture and family stores of a housekeeper in the whole, including

clothing, bedding, and other white goods, books, and all other tangible personal property items that

are common to the normal household;

(18) Improvements made to any real property to provide a shelter and fallout protection

from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided, that

the improvements meet applicable standards for shelter construction established, from time to time,

by the Rhode Island emergency management agency. The improvements are deemed to comply

with the provisions of any building code or ordinance with respect to the materials or the methods

of construction used and any shelter or its establishment is deemed to comply with the provisions

of any zoning code or ordinance;

(19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator;

(20) Manufacturer’s inventory.

(i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be

a manufacturer within a city or town within this state if that person uses any premises, room, or

place in it primarily for the purpose of transforming raw materials into a finished product for trade

through any or all of the following operations: adapting, altering, finishing, making, and

ornamenting; provided, that public utilities; non-regulated power producers commencing

commercial operation by selling electricity at retail or taking title to generating facilities on or after

July 1, 1997; building and construction contractors; warehousing operations, including distribution

bases or outlets of out-of-state manufacturers; and fabricating processes incidental to warehousing

or distribution of raw materials, such as alteration of stock for the convenience of a customer; are

excluded from this definition;

(ii) For the purposes of this section and §§ 44-4-10 and 44-5-38, the term “manufacturer’s

inventory,” or any similar term, means and includes the manufacturer’s raw materials, the

manufacturer’s work in process, and finished products manufactured by the manufacturer in this

state, and not sold, leased, or traded by the manufacturer or its title or right to possession divested;

provided, that the term does not include any finished products held by the manufacturer in any retail

store or other similar selling place operated by the manufacturer whether or not the retail

establishment is located in the same building in which the manufacturer operates the manufacturing

plant;

(iii) For the purpose of § 44-11-2, a “manufacturer” is a person whose principal business

in this state consists of transforming raw materials into a finished product for trade through any or

all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be

principally engaged if the gross receipts that person derived from the manufacturing operations in

this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than

fifty percent (50%) of the total gross receipts that person derived from all the business activities in

which that person engaged in this state during the taxable year. For the purpose of computing the

percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished

products manufactured by the manufacturer in this state, even though the manufacturer’s store or

other selling place may be at a different location from the location of the manufacturer’s

manufacturing plant in this state, are deemed to have been derived from manufacturing;

(iv) Within the meaning of the preceding paragraphs of this subdivision, the term

“manufacturer” also includes persons who are principally engaged in any of the general activities

coded and listed as establishments engaged in manufacturing in the Standard Industrial

Classification Manual prepared by the Technical Committee on Industrial Classification, Office of

Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as

revised from time to time, but eliminating as manufacturers those persons, who, because of their

limited type of manufacturing activities, are classified in the manual as falling within the trade

rather than an industrial classification of manufacturers. Among those thus eliminated, and

accordingly also excluded as manufacturers within the meaning of this paragraph, are persons

primarily engaged in selling, to the general public, products produced on the premises from which

they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and

custom tailors, except, that a person who manufactures bakery products for sale primarily for home

delivery, or through one or more non-baking retail outlets, and whether or not retail outlets are

operated by the person, is a manufacturer within the meaning of this paragraph;

(v) The term “Person” means and includes, as appropriate, a person, partnership, or

corporation; and

(vi) The department of revenue shall provide to the local assessors any assistance that is

necessary in determining the proper application of the definitions in this subdivision;

(21) Real and tangible personal property acquired to provide a treatment facility used

primarily to control the pollution or contamination of the waters or the air of the state, as defined

in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed,

reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or

standards for the control of water or air pollution or contamination, and certified as approved in an

order entered by the director of environmental management. The property is exempt as long as it is

operated properly in compliance with the order of approval of the director of environmental

management; provided, that any grant of the exemption by the director of environmental

management in excess of ten (10) years is approved by the city or town in which the property is

situated. This provision applies only to water and air pollution control properties and facilities

installed for the treatment of waste waters and air contaminants resulting from industrial

processing; furthermore, it applies only to water or air pollution control properties and facilities

placed in operation for the first time after April 13, 1970;

(22) Manufacturing machinery and equipment acquired or used by a manufacturer after

December 31, 1974. Manufacturing machinery and equipment is defined as:

(i) Machinery and equipment used exclusively in the actual manufacture or conversion of

raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision

(20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and

development or for quality assurance of its manufactured products;

(ii) Machinery and equipment that is partially used in the actual manufacture or conversion

of raw materials or goods in process of manufacture by a manufacturer, as defined in subdivision

(20), and machinery, fixtures, and equipment used by a manufacturer for research and development

or for quality assurance of its manufactured products, to the extent to which the machinery and

equipment is used for the manufacturing processes, research and development, or quality assurance.

In the instances where machinery and equipment is used in both manufacturing and/or research and

development and/or quality assurance activities and non-manufacturing activities, the assessment

on machinery and equipment is prorated by applying the percentage of usage of the equipment for

the manufacturing, research and development, and quality-assurance activity to the value of the

machinery and equipment for purposes of taxation, and the portion of the value used for

manufacturing, research and development, and quality assurance is exempt from taxation. The

burden of demonstrating this percentage usage of machinery and equipment for manufacturing and

for research and development and/or quality assurance of its manufactured products rests with the

manufacturer; and

(iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was

purchased after July 1, 1997; provided that the city or town council of the city or town in which the

machinery and equipment is located adopts an ordinance exempting the machinery and equipment

from taxation. For purposes of this subsection, city councils and town councils of any municipality

may, by ordinance, wholly or partially exempt from taxation the machinery and equipment

discussed in this subsection for the period of time established in the ordinance and may, by

ordinance, establish the procedures for taxpayers to avail themselves of the benefit of any

exemption permitted under this section; provided, that the ordinance does not apply to any

machinery or equipment of a business, subsidiary, or any affiliated business that locates or relocates

from a city or town in this state to another city or town in the state;

(23) Precious metal bullion, meaning any elementary metal that has been put through a

process of melting or refining, and that is in a state or condition that its value depends upon its

content and not its form. The term does not include fabricated precious metal that has been

processed or manufactured for some one or more specific and customary industrial, professional,

or artistic uses;

(24) Hydroelectric power-generation equipment, which includes, but is not limited to,

turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers,

protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The

hydroelectric power-generation equipment must have been purchased after July 1, 1979, and

acquired or used by a person or corporation who or that owns or leases a dam and utilizes the

equipment to generate hydroelectric power;

(25) Subject to authorization by formal action of the council of any city or town, any real

or personal property owned by, held in trust for, or leased to an organization incorporated under

chapter 6 of title 7, as amended, or an organization meeting the definition of “charitable trust” set

out in § 18-9-4, as amended, or an organization incorporated under the not-for-profits statutes of

another state or the District of Columbia, the purpose of which is the conserving of open space, as

that term is defined in chapter 36 of title 45, as amended, provided the property is used exclusively

for the purposes of the organization;

(26) Tangible personal property, the primary function of which is the recycling, reuse, or

recovery of materials (other than precious metals, as defined in § 44-18-30(24)(ii) and (iii)), from,

or the treatment of “hazardous wastes,” as defined in § 23-19.1-4, where the “hazardous wastes”

are generated primarily by the same taxpayer and where the personal property is located at, in, or

adjacent to a generating facility of the taxpayer. The taxpayer may, but need not, procure an order

from the director of the department of environmental management certifying that the tangible

personal property has this function, which order effects a conclusive presumption that the tangible

personal property qualifies for the exemption under this subdivision. If any information relating to

secret processes or methods of manufacture, production, or treatment is disclosed to the department

of environmental management only to procure an order, and is a “trade secret” as defined in § 28-

21-10(b), it shall not be open to public inspection or publicly disclosed unless disclosure is

otherwise required under chapter 21 of title 28 or chapter 24.4 of title 23;

(27) Motorboats as defined in § 46-22-2 for which the annual fee required in § 46-22-4 has

been paid;

(28) Real and personal property of the Providence Performing Arts Center, a non-business

corporation as of December 31, 1986;

(29) Tangible personal property owned by, and used exclusively for the purposes of, any

religious organization located in the city of Cranston;

(30) Real and personal property of the Travelers Aid Society of Rhode Island, a nonprofit

corporation, the Union Mall Real Estate Corporation, and any limited partnership or limited liability

company that is formed in connection with, or to facilitate the acquisition of, the Providence YMCA

Building;

(31) Real and personal property of Meeting Street Center or MSC Realty, Inc., both not-

for-profit Rhode Island corporations, and any other corporation, limited partnership, or limited

liability company that is formed in connection with, or to facilitate the acquisition of, the properties

designated as the Meeting Street National Center of Excellence on Eddy Street in Providence,

Rhode Island;

(32) The buildings, personal property, and land upon which the buildings stand, located on

Pomham Island, East Providence, currently identified as Assessor’s Map 211, Block 01, Parcel

001.00, that consists of approximately twenty-one thousand three hundred (21,300) square feet and

is located approximately eight hundred sixty feet (860′), more or less, from the shore, and limited

exclusively to these said buildings, personal estate and land, provided that said property is owned

by a qualified 501(c)(3) organization, such as the American Lighthouse Foundation, and is used

exclusively for a lighthouse;

(33) The Stadium Theatre Performing Arts Centre building located in Monument Square,

Woonsocket, Rhode Island, so long as said Stadium Theatre Performing Arts Center is owned by

the Stadium Theatre Foundation, a Rhode Island nonprofit corporation;

(34) Real and tangible personal property of St. Mary Academy — Bay View, located in

East Providence, Rhode Island;

(35) Real and personal property of East Bay Community Action Program and its

predecessor, Self Help, Inc; provided, that the organization is qualified as a tax-exempt corporation

under § 501(c)(3) of the United States Internal Revenue Code;

(36) Real and personal property located within the city of East Providence of the Columbus

Club of East Providence, a Rhode Island charitable nonprofit corporation;

(37) Real and personal property located within the city of East Providence of the Columbus

Club of Barrington, a Rhode Island charitable nonprofit corporation;

(38) Real and personal property located within the city of East Providence of Lodge 2337

BPO Elks, a Rhode Island nonprofit corporation;

(39) Real and personal property located within the city of East Providence of the St.

Andrews Lodge No. 39, a Rhode Island charitable nonprofit corporation;

(40) Real and personal property located within the city of East Providence of the Trustees

of Methodist Health and Welfare service a/k/a United Methodist Elder Care, a Rhode Island

nonprofit corporation;

(41) Real and personal property located on the first floor of 90 Leonard Avenue within the

city of East Providence of the Zion Gospel Temple, Inc., a religious nonprofit corporation;

(42) Real and personal property located within the city of East Providence of the Cape

Verdean Museum Exhibit, a Rhode Island nonprofit corporation;

(43) The real and personal property owned by a qualified 501(c)(3) organization that is

affiliated and in good standing with a national, congressionally chartered organization and thereby

adheres to that organization’s standards and provides activities designed for recreational,

educational, and character building purposes for children from ages six (6) years to seventeen (17)

years;

(44) Real and personal property of the Rhode Island Philharmonic Orchestra and Music

School; provided, that the organization is qualified as a tax-exempt corporation under § 501(c)(3)

of the United States Internal Revenue Code;

(45) The real and personal property located within the town of West Warwick at 211

Cowesett Avenue, Plat 29-Lot 25, which consists of approximately twenty-eight thousand seven

hundred fifty (28,750) square feet and is owned by the Station Fire Memorial Foundation of East

Greenwich, a Rhode Island nonprofit corporation;

(46) Real and personal property of the Comprehensive Community Action Program, a

qualified tax-exempt corporation under § 501(c)(3) of the United States Internal Revenue Code;

(47) Real and personal property located at 52 Plain Street, within the city of Pawtucket of

the Pawtucket Youth Soccer Association, a Rhode Island nonprofit corporation;

(48) Renewable energy resources, as defined in § 39-26-5, used in residential systems and

associated equipment used therewith in service after December 31, 2015;

(49) Renewable energy resources, as defined in § 39-26-5, if employed by a manufacturer,

as defined in subsection (a) of this section, shall be exempt from taxation in accordance with

subsection (a) of this section;

(50) Real and personal property located at 415 Tower Hill Road within the town of North

Kingstown, of South County Community Action, Inc., a qualified tax-exempt corporation under §

501(c)(3) of the United States Internal Revenue Code;

(51) As an effort to promote business growth, tangible business or personal property, in

whole or in part, within the town of Charlestown’s community limits, subject to authorization by

formal action of the town council of the town of Charlestown;

(52) All real and personal property located at 1300 Frenchtown Road, within the town of

East Greenwich, identified as assessor’s map 027, plat 019, lot 071, and known as the New England

Wireless and Steam Museum, Inc., a qualified tax-exempt corporation under § 501(c)(3) of the

United States Internal Revenue Code;

(53) Real and tangible personal property of Mount Saint Charles Academy located within

the city of Woonsocket, specifically identified as the following assessor’s plats and lots: Logee

Street, plat 23, lot 62, Logee Street, plat 24, lots 304 and 305; Welles Street, plat 23, lot 310;

Monroe Street, plat 23, lot 312; and Roberge Avenue, plat 24, lot 47;

(54) Real and tangible personal property of Steere House, a Rhode Island nonprofit

corporation, located in Providence, Rhode Island;

(55) Real and personal property located within the town of West Warwick of Tides Family

Services, Inc., a Rhode Island nonprofit corporation;

(56) Real and personal property of Tides Family Services, Inc., a Rhode Island nonprofit

corporation, located in the city of Pawtucket at 242 Dexter Street, plat 44, lot 444;

(57) Real and personal property located within the town of Middletown of Lucy’s Hearth,

a Rhode Island nonprofit corporation;

(58) Real and tangible personal property of Habitat for Humanity of Rhode Island—

Greater Providence, Inc., a Rhode Island nonprofit corporation, located in Providence, Rhode

Island;

(59) Real and personal property of the Artic Playhouse, a Rhode Island nonprofit

corporation, located in the town of West Warwick at 1249 Main Street;

(60) Real and personal property located at 321 Main Street, within the town of South

Kingstown, of the Contemporary Theatre Company, a qualified, tax-exempt corporation under §

501(c)(3) of the United States Internal Revenue Code;

(61) Real and personal property of The Samaritans, Inc., a Rhode Island nonprofit §

501(c)(3) corporation located at 67 Park Place, Pawtucket, Rhode Island, to the extent the city

council of Pawtucket may from time to time determine;

(62) Real and personal property of North Kingstown, Exeter Animal Protection League,

Inc., dba “Pet Refuge,” 500 Stony Lane, a Rhode Island nonprofit corporation, located in North

Kingstown, Rhode Island;

(63) Real and personal property located within the city of East Providence of Foster

Forward (formerly the Rhode Island Foster Parents Association), a Rhode Island charitable

nonprofit corporation;

(64) Real and personal property located at 54 Kelly Avenue within the town of East

Providence, of the Associated Radio Amateurs of Southern New England, a Rhode Island nonprofit

corporation;

(65) Real and tangible personal property of Providence Country Day School, a Rhode

Island nonprofit corporation, located in East Providence, Rhode Island and further identified as plat

406, block 6, lot 6, and plat 506, block 1, lot 8;

(66) As an effort to promote business growth, tangible business or personal property, in

whole or in part, within the town of Bristol’s community limits, subject to authorization by formal

action of the town council of the town of Bristol;

(67) Real and tangible personal property of the Heritage Harbor Foundation, a Rhode

Island nonprofit corporation, located at 1445 Wampanoag Trail, Suites 103 and 201, within the city

of East Providence;

(68) Real property of Ocean State Community Wellness, Inc., a qualified tax-exempt

corporation under § 501(c)(3) of the United States Internal Revenue Code, located in North

Kingstown, Rhode Island, with a physical address of 7450 Post Road, and further identified as plat

108, lot 83;

(69) Real and tangible personal property of St. John Baptist De La Salle Institute, d/b/a La

Salle Academy, a Rhode Island domestic nonprofit corporation, located in Providence, Rhode

Island denominated at the time this subsection was adopted as Plat 83 Lot 276 by the tax assessor

for the city of Providence comprising approximately 26.08 acres of land along with all buildings

and improvements that have been or may be made;

(70) Real and tangible personal property of The Providence Community Health Centers,

Inc., a Rhode Island domestic nonprofit corporation, located in Providence, Rhode Island;

(71) In the city of Central Falls and the city of Pawtucket, real property and tangible

personal property located on or in the premise acquired or leased by a railroad entity and for the

purpose of providing boarding and disembarking of railroad passengers and the supporting

passenger railroad operations and services. For the purpose of this section, a railroad entity shall be

any incorporated entity that has been duly authorized by the Rhode Island public utilities

commission to provide passenger railroad services;

(72) Real and tangible personal property of the American Legion Riverside Post Holding

Company, d/b/a American Legion Post 10, a Rhode Island nonprofit corporation, located at 830

Willet Avenue, within the city of East Providence on Map 513, Block 27, Parcel 001.00 as long as

said property is owned by American Legion Post 10;

(73) Real and tangible personal property of the Holy Rosary Band Society, a Rhode Island

nonprofit corporation, located at 328 Taunton Avenue, within the city of East Providence on Map

306, Block 01, Parcel 012.00;

(74) Real and tangible personal property of Foster Forward, a Rhode Island domestic

nonprofit corporation, located within the city of Pawtucket, at 16 North Bend Street, and further

identified as assessor’s plat 21, lot 312;

(75) Real and tangible personal property of the Old and Ancient Rowers Society of Rhode

Island, a Rhode Island domestic nonprofit corporation, located at 166 Walmsley Lane, within the

town of North Kingstown on Plat 004/Lot 019;

(76) Real and tangible personal property of the Rhode Island Public Health Foundation, a

domestic nonprofit corporation or any other entity formed by the Rhode Island Public Health

Foundation in connection with, or to facilitate the acquisition of, one property to be owned by the

Rhode Island Public Health Foundation or such entity, located in the city of Providence;

(77) Real and tangible personal property of the Manissean Tribal Council, a Rhode Island

nonprofit corporation, located in the town of New Shoreham, Rhode Island;

(78) Real and tangible personal property of Sophia Academy located at 582 Elmwood

Avenue, the San Miguel Education Center located at 525 Branch Avenue, and the Community

Preparatory School, Inc. located at 135 Prairie Avenue, all of which are domestic nonprofit

corporations, and all of which are located within the city of Providence;

(79) Real and tangible personal property of Cape Verdean Museum Exhibit, a Rhode Island

domestic nonprofit corporation, located at 617 Prospect Street, within the city of Pawtucket on

Assessors’ Plat 37, Lot 434;

(80) Real and tangible personal property of Sojourner House, a Rhode Island nonprofit

corporation, located in the city of Providence, at 386 Smith Street, further identified as Assessor’s

Plat 67, Lot 46, and 1570 Westminster Street, further identified as Assessor’s Plat 35, Lot 200;

(81) Real and tangible personal property of the Little Flower Home, a Rhode Island

domestic nonprofit corporation, located at 304 Hooper Street, within the Town of Tiverton on Map

102, Lot 196; provided that, the organization remains a federal 501(c)(3) tax-exempt corporation

and a domestic nonprofit charitable corporation;

(82) Real and tangible personal property of the Brain Injury Association of Rhode Island,

Inc., a nonprofit corporation, located at 1017 Waterman Avenue within the city of East Providence

on tax assessor’s map 607, Block 11, Parcel 4;

(83) Real and tangible personal property of the Johnnycake Center Realty Corporation, a

Rhode Island nonprofit corporation, located in the town of South Kingstown, and further identified

as 12 Green Street, Assessor’s Map 49-1, Lot 148, 44 Kersey Road, further identified as Assessor’s

Map 49-1, Lot 136, 54 Kersey Road, further identified as Assessor’s Map 49-1, Lot 137, and 1004

Kingstown Road, further identified as Assessor’s Map 49-4, Lot 124;

(84) Real and tangible personal property of the Little Compton Game Club, a Rhode Island

domestic nonprofit corporation, located at 83 John Dyer Road and 88 John Dyer Road, within the

town of Little Compton on Assessor’s Plat 44 Lots 4 and 5;

(85) Real and tangible personal property of Wildlife Rehabilitators Association of Rhode

Island (Wildlife Clinic of Rhode Island), a Rhode Island domestic nonprofit corporation, located at

2865 Tower Hill Road, within the town of North Kingstown on Assessor’s Map Plat 5, Lot 1;

(86) Non-commercial real and tangible personal property of Southside Community Land

Trust, a Rhode Island domestic nonprofit corporation, located in the city of Providence, at 404

Broad Street, further identified as Assessor’s Plat 23, Lot 753;

(87) Tangible personal property of Northwest Community Health Care d/b/a WellOne

Primary Medical and Dental Care, a Rhode Island domestic nonprofit corporation, located in the

town of North Scituate at 35 Village Plaza Way, and further identified as Plat 38, Lot 72;

(88) Real and tangible personal property of Friends of Little Compton Wellness Center,

Inc., a domestic nonprofit corporation located at 115 East Main Road, within the town of Little

Compton, on Assessor’s Plat 28, Lot 45;

(89) Real and tangible personal property of PROJECT Weber/RENEW, a Rhode Island

domestic nonprofit corporation; provided that, it is qualified as a tax-exempt corporation pursuant

to 26 U.S.C. 501(c)(3) of the Internal Revenue Code;

(90) Real and tangible personal property of Codac, Inc., a Rhode Island domestic nonprofit

corporation, located in the city of Providence, Rhode Island, at 45 Royal Little Drive, further

identified as Assessor’s Plat 74, Lot 402;

(91) Real and tangible personal property of the Center for Southeast Asians, a Rhode Island

domestic nonprofit corporation, located in the city of Providence, at 105 Glenham Street, further

identified as Assessor’s Plat 45, Lot 668, 270 Elmwood Avenue, further identified as Assessor’s

Plat 44, Lot 388 and 126 Princeton Avenue, further identified as Assessor’s Plat 44, Lot 723;

(92) Real and tangible personal property of the Rhode Island Business Development

Institute, a domestic nonprofit corporation, located at 220 Smith Street within the city of Providence

on the assessor’s map as Plat 67, Lot 100;

(93) Real and tangible personal property of the Providence Preservation Society, a Rhode

Island domestic nonprofit corporation, located at 24 Meeting Street, within the city of Providence

on Tax Assessor’s Map, Plat 10, Lot 75; and

(94) Real and tangible personal property of the Pokanoket Management Group, a Rhode

Island nonprofit corporation, trustee of the Pokanoket Tribe Land Trust, located in the town of

Bristol, Rhode Island, and used directly to cultivate, preserve and protect the natural, cultural,

traditional and historical resources, watersheds, habitats, ecosystems and archaeological sites of

and within the ancestral territory of the Pokanoket people; and

(95)(i) Real and tangible personal property of urban farmers and urban farmland, including

one building per lot if the building meets all of the following conditions: (A) The building is

occupied by one or more urban farmers who are engaged in agricultural operations as defined

herein; (B) The building is used to house agricultural activities including, but not limited to, seed

starting, storage of agricultural materials and processing of agricultural products; (C) The building

size is no greater than two thousand five hundred square feet (2,500 sq. ft).

(ii) For the sole purposes of this subsection:

(A) “Actively devoted to agricultural or horticultural use” means land used, under normally

acceptable practices, in the production of plants and animals useful to people including, but not

limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral,

ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy

products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including

beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any

or all such animals for the production of meat, milk, fiber in saleable livestock; and the production

of fish, shellfish, plant material and fish products through aquacultural practices.

(B) “Agricultural operations” means any commercial enterprise or community garden

enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture,

forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing

animals, poultry, or bees.

cultivation and husbandry techniques including, but not limited to, techniques for the proper animal

and plant densities and spacing, harvesting techniques, irrigation techniques, soil conditioning and

preservation techniques, erosion control practices, waste disposal techniques, cover crops, and

rotation cycles recommended by the university of Rhode Island, U.S. Department of Agriculture,

recognized producers organizations and seed and implement manufacturers for Rhode Island soils

and practices approved by the department of environmental management agricultural advisory

committee.

(D) “Urban area” means any municipality that is incorporated as a city or has a population

density greater than three thousand (3,000) residents per square mile as of the most recently

published U.S. Census.

(E) “Urban farmer” means the principal person engaged in agricultural operations on urban

farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent.

(F) “Urban farmland” means land that is actively devoted to agricultural or horticultural

use in an urban area in which an urban farmer is the principal operator of the agricultural operations

on such land.

(iii) The department of environmental management shall provide to the local assessors any

assistance that is necessary in determining the proper application of the definitions in this

subsection, at the request of either the local assessor or a property owner.

(iv) Land use change tax:

(A) Pursuant to § 44-5-39, real property of urban farmers that has been exempt from

taxation pursuant to this subsection, for fewer than fifteen (15) years, and the real property is no

longer urban farmland as defined in this section, municipalities may assess additional taxes payable

by the then current owner, at such time of the land use change, on such real property, in an amount

not to exceed:

(I) Ten percent (10%) of the then fair market value of the land if the use is changed during

the first six (6) years of classification.

(II) Nine percent (9%) of the then fair market value of the land if the use is changed during

the seventh year of classification.

(III) Eight percent (8%) of the then fair market value of the land if the use is changed during

the eighth year of classification.

(IV) Seven percent (7%) of the then fair market value of the land if the use is changed

during the ninth year of classification.

(V) Six percent (6%) of the then fair market value of the land if the use is changed during

the tenth year of classification.

(VI) Five percent (5%) of the then fair market value of the land if the use is changed during

the eleventh year of classification.

(VII) Four percent (4%) of the then fair market value of the land if the use is changed

during the twelfth year of classification.

(VIII) Three percent (3%) of the then fair market value of the land if the use is changed

during the thirteenth year of classification.

(IX) Two percent (2%) of the then fair market value of the land if the use is changed during

the fourteenth year of classification.

(X) One percent (1%) of the then fair market value of the land if the use is changed during

the fifteenth year of classification.

(XI) No additional tax shall be imposed following the end of the fifteenth year of

classification.

(96) Real and tangible personal property of small farmers and small farmland.

(i) For the sole purposes of this subsection:

(A) “Actively devoted to agricultural or horticultural use” means land used, under normally

acceptable practices, in the production of plants and animals useful to people, including, but not

limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral,

ornamental and greenhouse products, the growing of Christmas trees; dairy animals and dairy

products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including

beef cattle, swine, horses and mules; the stabling of horses; commercial breeding or grazing of any

or all such animals for the production of meat, milk, fiber in saleable livestock; and the production

of fish, shellfish, plant material and fish products through aquacultural practices.

(B) “Agricultural operations” means any commercial enterprise or community garden

enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture,

forestry, composting, stabling of horses, dairy farming, or aquaculture, or the raising of livestock,

furbearing animals, poultry, or bees.

than five (5) acres of land actively devoted to agricultural or horticultural use as indicated for

income tax purposes by filing an IRS Schedule F or equivalent.

(D) “Small farmland” means land totaling fewer than five (5) acres actively devoted to

agricultural or horticultural use in which a small farmer is the principal operator of the agricultural

operations on such land.

(E) “Under normally acceptable practices” means management of the small farmland using

cultivation and husbandry techniques, including, but not limited to, techniques for the proper

animal and plant densities and spacing, harvesting techniques, irrigation techniques, soil

conditioning and preservation techniques, erosion control practices, waste disposal techniques,

cover crops, and rotation cycles recommended by the university of Rhode Island, U.S. Department

of Agriculture, recognized producers organizations and seed and implement manufacturers for

Rhode Island soils and practices approved by the department of environmental management

agricultural advisory committee.

(ii) The department of environmental management shall provide to the local assessors any

assistance that is necessary in determining the proper application of the definitions in this

subsection, at the request of either the local assessor or a property owner.

(iii) Land use change tax:

(A) Pursuant to § 44-5-39, real property of small farmers that has been exempt from

taxation pursuant to this subsection for fewer than fifteen (15) years, and the real property is no

longer small farmland as defined in this section, municipalities may assess additional taxes payable

by the then current owner on such real property in an amount not to exceed:

(I) Ten percent (10%) of the then fair market value of the land if the use is changed during

the first six (6) years of classification.

(II) Nine percent (9%) of the then fair market value of the land if the use is changed during

the seventh year of classification.

(III) Eight percent (8%) of the then fair market value of the land if the use is changed during

the eighth year of classification.

(IV) Seven percent (7%) of the then fair market value of the land if the use is changed

during the ninth year of classification.

(V) Six percent (6%) of the then fair market value of the land if the use is changed during

the tenth year of classification.

(VI) Five percent (5%) of the then fair market value of the land if the use is changed during

the eleventh year of classification.

(VII) Four percent (4%) of the then fair market value of the land if the use is changed

during the twelfth year of classification.

(VIII) Three percent (3%) of the then fair market value of the land if the use is changed

during the thirteenth year of classification.

(IX) Two percent (2%) of the then fair market value of the land if the use is changed during

the fourteenth year of classification.

(X) One percent (1%) of the then fair market value of the land if the use is changed during

the fifteenth year of classification.

(XI) No additional tax shall be imposed following the end of the fifteenth year of

classification.

(b) Except as provided below, when a city or town taxes a for-profit hospital facility, the

value of its real property shall be the value determined by the most recent full revaluation or

statistical property update performed by the city or town; provided, however, in the year a nonprofit

hospital facility converts to or otherwise becomes a for-profit hospital facility, or a for-profit

hospital facility is initially established, the value of the real property and personal property of the

for-profit hospital facility shall be determined by a valuation performed by the assessor for the

purpose of determining an initial assessed value of real and personal property, not previously taxed

by the city or town, as of the most recent date of assessment pursuant to § 44-5-1, subject to a right

of appeal by the for-profit hospital facility which shall be made to the city or town tax assessor with

a direct appeal from an adverse decision to the Rhode Island superior court business calendar.

A “for-profit hospital facility” includes all real and personal property affiliated with any

hospital as identified in an application filed pursuant to chapter 17 or 17.14 of title 23.

Notwithstanding the above, a city or town may enter into a stabilization agreement with a for-profit

hospital facility under § 44-3-9 or other laws specific to the particular city or town relating to

stabilization agreements. In a year in which a nonprofit hospital facility converts to, or otherwise

becomes, a for-profit hospital facility, or a for-profit hospital facility is otherwise established, in

that year only the amount levied by the city or town and/or the amount payable under the

stabilization agreement for that year related to the for-profit hospital facility shall not be counted

towards determining the maximum tax levy permitted under § 44-5-2.

for businesses, including small businesses, and to promote economic development, a city, town, or

fire district may establish an exemption for tangible personal property within its geographic limits

by formal action of the appropriate governing body within the city, town, or fire district, which

exemptions shall be uniformly applied and in compliance with local tax classification requirements.

Exemptions established pursuant to this subsection shall conform to the requirements of § 44-5-

12.2.

SECTION 2. Section 44-11-11 of the General Laws in Chapter 44-11 entitled "Business

Corporation Tax" is hereby amended to read as follows:

44-11-11. “Net income” defined.

(a)(1) “Net income” means, for any taxable year and for any corporate taxpayer, the taxable

income of the taxpayer for that taxable year under the laws of the United States, plus:

(i) Any interest not included in the taxable income;

(ii) Any specific exemptions;

(iii) The tax imposed by this chapter;

(iv) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck

Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus

Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or

any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount

of the loan forgiven exceeds $250,000; and minus:

(v) Interest on obligations of the United States or its possessions, and other interest exempt

from taxation by this state;

(vi) The federal net operating loss deduction;

(vii) For any taxable year beginning on or after January 1, 2025, in the case of a taxpayer

that is licensed in accordance with chapters 28.6 and/or 28.11 of title 21, the amount equal to any

expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed under

26 U.S.C. § 280E; and

(viii) For the taxable year beginning on or before January 1, 2025, the amount of any

income, deduction, or allowance that would be subject to federal income tax but for the

Congressional enactment of the One Big Beautiful Bill Act or any other similar Congressional

enactment. The enactment of the One Big Beautiful Bill Act or any other similar Congressional

enactment and 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 shall be deemed grounds for the promulgation of emergency rules and regulations

under § 42-35-2.10 to effectuate the purpose of preserving the Rhode Island tax base under Rhode

Island law with respect to the One Big Beautiful Bill Act or any other similar Congressional

enactment; and

(ix) Income from the production of food by urban farmers and small farmers.

(A) For the sole purpose of this subsection:

(I) “Actively devoted to agricultural or horticultural use” means land used, under normally

acceptable practices, in the production of plants and animals useful to people including, but not

limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral,

ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy

products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including

beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any

or all such animals for the production of meat, milk, fiber in saleable livestock; and the production

of fish, shellfish, plant material and fish products through aquacultural practices.

(II) “Agricultural operations” means any commercial enterprise or community garden

enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture,

forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing

animals, poultry, or bees.

(III) “Small farmer” means the principal person engaged in agricultural operations on fewer

than five (5) acres of land actively devoted to agricultural or horticultural use as indicated for

income tax purposes by filing an IRS Schedule F or equivalent.

(IV) “Under normally acceptable practices” means management of the urban farmland

using cultivation and husbandry techniques including, but not limited to, techniques for the proper

animal and plant densities and spacing, harvesting techniques, irrigation techniques, soil

conditioning and preservation techniques, erosion control practices, waste disposal techniques,

cover crops, and rotation cycles recommended by the university of Rhode Island, U.S. Department

of Agriculture, recognized producers organizations and seed and implement manufacturers for

Rhode Island soils and practices approved by the department of environmental management

agricultural advisory committee.

(V) “Urban area” means any municipality that is incorporated as a city or has a population

density greater than three thousand (3,000) residents per square mile as of the most recently

published U.S. Census.

(VI) “Urban farmer” means the principal person engaged in agricultural operations on

urban farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent.

(VII) “Urban farmland” means land that is actively devoted to agricultural or horticultural

use in an urban area in which an urban farmer is the principal operator of the agricultural operations

on such land.

(2) All binding federal elections made by or on behalf of the taxpayer applicable either

directly or indirectly to the determination of taxable income shall be binding on the taxpayer except

where this chapter or its attendant regulations specifically modify or provide otherwise. Rhode

Island taxable income shall not include the “gross-up of dividends” required by the federal Internal

Revenue Code to be taken into taxable income in connection with the taxpayer’s election of the

foreign tax credit.

(b) A net operating loss deduction shall be allowed, which shall be the same as the net

operating loss deduction allowed under 26 U.S.C. § 172, except that:

(1) Any net operating loss included in determining the deduction shall be adjusted to reflect

the inclusions and exclusions from entire net income required by subsection (a) of this section and

§ 44-11-11.1;

(2) The deduction shall not include any net operating loss sustained during any taxable year

in which the taxpayer was not subject to the tax imposed by this chapter; and

(3) Limitation on 26 U.S.C. § 172 deduction.

(i) The deduction shall not exceed the deduction for the taxable year allowable under 26

U.S.C. § 172; provided, that the deduction for a taxable year may not be carried back to any other

taxable year for Rhode Island purposes but shall only be allowable on a carry forward basis for the

five (5) succeeding taxable years; and

(ii) For any taxable year beginning on or after January 1, 2025, the deduction shall not

exceed the deduction for the taxable year allowable under 26 U.S.C. § 172; provided that, the

deduction for a taxable year may not be carried back to any other taxable year for Rhode Island

purposes, but shall only be allowable on a carry forward basis for the twenty (20) succeeding

taxable years.

this chapter, will be treated as they are under federal income tax law and shall not pay the amount

of the tax computed under § 44-11-2(a). Any income to shareholders of DISCs is to be treated in

the same manner as it is treated under federal income tax law as it exists on December 31, 1984.

(d) A corporation that qualifies as a “foreign sales corporation” (FSC) under the provisions

of subchapter N, 26 U.S.C. § 861 et seq., and that has in effect for the entire taxable year a valid

election under federal law to be treated as a FSC, shall not pay the amount of the tax computed

under § 44-11-2(a). Any income to shareholders of FSCs is to be treated in the same manner as it

is treated under federal income tax law as it exists on January 1, 1985.

(e) For purposes of a corporation’s state tax liability, any deduction to income allowable

under 26 U.S.C. § 1400Z-2(c) may be claimed in the case of any investment held by the taxpayer

for at least seven years. The division of taxation shall promulgate, in its discretion, rules and

regulations relative to the accelerated application of deductions under 26 U.S.C. § 1400Z-2(c).

SECTION 3. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and

Use Taxes — Liability and Computation" is hereby amended to read as follows:

44-18-30. Gross receipts exempt from sales and use taxes.

There are exempted from the taxes imposed by this chapter the following gross receipts:

(1) Sales and uses beyond constitutional power of state. From the sale and from the storage,

use, or other consumption in this state of tangible personal property the gross receipts from the sale

of which, or the storage, use, or other consumption of which, this state is prohibited from taxing

under the Constitution of the United States or under the constitution of this state.

(2) Newspapers.

(i) From the sale and from the storage, use, or other consumption in this state of any

newspaper.

(ii) “Newspaper” means an unbound publication printed on newsprint 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 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, urns, shrouds and burial garments. From the sale and from the

storage, use, or other consumption in this state of coffins, caskets, burial containers, urns, urn liners,

urn vaults, grave liners, grave vaults, burial tent setups, prayer cards, shrouds, and 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 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 United States Coast Guard (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 § 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 §§ 44-19-27 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.

(i) An urban farmer is not required to meet any minimum annual, gross sales amount in

prior years to qualify for either Level I or Level II exemption levels. Proof of satisfying the

definitional requirements in this subsection shall be required.

(A) For the sole purposes of this subsection: