2003 -- S 0717

=======

LC02186

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2003

____________

A N A C T

RELATING TO AERONAUTICS

     Introduced By: Senator John C. Revens

     Date Introduced: February 26, 2003

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Chapter 1-4 of the General Laws entitled "Uniform Aeronautical

1-2

Regulatory Act" is hereby amended by adding thereto the following section:

1-3

     1-4-10.2. Prohibitions. – It shall be unlawful:

1-4

     (a) For any person to operate or authorize the operation of any civil aircraft which is not

1-5

possessed of a valid identification mark assigned by the federal government.

1-6

     (b) For any resident to own or authorize the operation of any civil aircraft owned by him

1-7

or her which does not have a currently effective Rhode Island state registration certificate, and for

1-8

which the aircraft operating fee, if required, has not been paid.

1-9

     (c) For any nonresident to own or authorize the operation of any civil aircraft owned by

1-10

him or her and located in Rhode Island for more than ninety (90) days cumulatively during a

1-11

registration year, which does not have a currently effective Rhode Island state registration

1-12

certificate, and for which the aircraft operating fee, if required, has not been paid.

1-13

     (d) For any person to own or to operate an aircraft which fails to display the currently

1-14

effective registration decal or other identifier as required by regulations adopted under section 1-

1-15

4-10 by the director.

1-16

     (e) For any person to operate or authorize the operation of any civil aircraft in air

1-17

commerce within the state which does not have a currently effective airworthiness certificate and

1-18

a state registration certificate and having paid the aircraft operating fee, if required.

1-19

     (f) For any person to operate or permit operation of aircraft on or from any airport for

2-1

compensation or hire, unless said area is registered with the department.

2-2

     (g) For any person to operate or authorize the operation of aircraft in violation of any

2-3

other rule or regulation, or in violation of the terms of any certificate, issued under the authority

2-4

of this chapter.

2-5

     (h) For any person to operate or attempt to operate an aircraft on the ground, on the

2-6

public waters, or in the air while under the influence of intoxicating liquor or of any controlled

2-7

drug which affects a person’s ability to operate an aircraft in a safe manner or while having 4/100

2-8

percent or more by weight alcohol in his or her blood.

2-9

     (i) For any owner or operator of an aircraft having knowledge of an aircraft accident or

2-10

aircraft incident to fail to report facts concerning the accident or incident to the department or a

2-11

law enforcement officer within seven (7) days of the occurrence of the event, unless incapacitated

2-12

by death or injury.

2-13

     (j) For any person to touch any part of aircraft wreckage at an aircraft accident scene,

2-14

except for rescue of persons and/or classified materials, without specific approval of the federal

2-15

or state official responsible for the accident scene.

2-16

     (k) For any person to operate any ground vehicle which is unrelated to aircraft operations

2-17

or servicing, or airport operations and maintenance, within the boundaries of any public airport

2-18

without the express consent of the airport manager. This subsection does not prohibit the

2-19

operation of a ground vehicle upon a road laid out in the airport to provide access to or egress

2-20

from the airport.

2-21

     (l) For any person to make or cause to be made an intentional false light, signal, or report

2-22

of an aircraft accident, or missing aircraft, or, in an emergency situation, to use any device or

2-23

equipment to initiate or to have others initiate an emergency response by any public or private

2-24

agency.

2-25

     SECTION 2. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and

2-26

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

2-27

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

2-28

the taxes imposed by this chapter the following gross receipts:

2-29

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

2-30

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

2-31

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

2-32

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

2-33

      (2) Newspapers. - (i) From the sale and from the storage, use, or other consumption in

2-34

this state of any newspaper.

3-1

      (ii) "Newspaper" means an unbound publication printed on newsprint which contains

3-2

news, editorial comment, opinions, features, advertising matter, and other matters of public

3-3

interest.

3-4

      (iii) "Newspaper" does not include a magazine, handbill, circular, flyer, sales catalog, or

3-5

similar item unless the item is printed for and distributed as a part of a newspaper.

3-6

      (3) School meals. - From the sale and from the storage, use, or other consumption in this

3-7

state of meals served by public, private, or parochial schools, school districts, colleges,

3-8

universities, student organizations, and parent teacher associations to the students or teachers of a

3-9

school, college, or university whether the meals are served by the educational institutions or by a

3-10

food service or management entity under contract to the educational institutions.

3-11

      (4) Containers. - (i) From the sale and from the storage, use, or other consumption in this

3-12

state of:

3-13

      (A) Nonreturnable containers, including boxes, paper bags, and wrapping materials

3-14

which are biodegradable and all bags and wrapping materials utilized in the medical and healing

3-15

arts, when sold without the contents to persons who place the contents in the container and sell

3-16

the contents with the container.

3-17

      (B) Containers when sold with the contents if the sale price of the contents is not

3-18

required to be included in the measure of the taxes imposed by this chapter.

3-19

      (C) Returnable containers when sold with the contents in connection with a retail sale of

3-20

the contents or when resold for refilling.

3-21

      (ii) As used in this subdivision, the term "returnable containers" means containers of a

3-22

kind customarily returned by the buyer of the contents for reuse. All other containers are

3-23

"nonreturnable containers."

3-24

      (5) Charitable, educational, and religious organizations. - (i) From the sale to as in

3-25

defined in this section, and from the storage, use, and other consumption in this state or any other

3-26

state of the United States of America of tangible personal property by hospitals not operated for a

3-27

profit, "educational institutions" as defined in subdivision (18) not operated for a profit, churches,

3-28

orphanages, and other institutions or organizations operated exclusively for religious or charitable

3-29

purposes, interest free loan associations not operated for profit, nonprofit organized sporting

3-30

leagues and associations and bands for boys and girls under the age of nineteen (19) years, the

3-31

following vocational student organizations that are state chapters of national vocational students

3-32

organizations: distributive education clubs of America, (DECA); future business leaders of

3-33

America/phi beta lambda (FBLA/PBL); future farmers of America (FFA); future homemakers of

3-34

America/home economics related occupations (FHA/HERD); and vocational industrial clubs of

4-1

America (VICA), organized nonprofit golden age and senior citizens clubs for men and women,

4-2

and parent teacher associations.

4-3

      (ii) In the case of contracts entered into with the federal government, its agencies or

4-4

instrumentalities, this state or any other state of the United States of America, its agencies, any

4-5

city, town, district, or other political subdivision of the states, hospitals not operated for profit,

4-6

educational institutions not operated for profit, churches, orphanages, and other institutions or

4-7

organizations operated exclusively for religious or charitable purposes, the contractor may

4-8

purchase such materials and supplies (materials and/or supplies are defined as those which are

4-9

essential to the project) that are to be utilized in the construction of the projects being performed

4-10

under the contracts without payment of the tax.

4-11

      (iii) The contractor shall not charge any sales or use tax to any exempt agency,

4-12

institution, or organization but shall in that instance provide his or her suppliers with certificates

4-13

in the form as determined by the division of taxation showing the reason for exemption; and the

4-14

contractor's records must substantiate the claim for exemption by showing the disposition of all

4-15

property so purchased. If any property is then used for a nonexempt purpose, the contractor must

4-16

pay the tax on the property used.

4-17

      (6) Gasoline. - From the sale and from the storage, use, or other consumption in this state

4-18

of: (i) gasoline and other products taxed under chapter 36 of title 31, and (ii) fuels used for the

4-19

propulsion of airplanes.

4-20

      (7) Purchase for manufacturing purposes. - (i) From the sale and from the storage, use, or

4-21

other consumption in this state of computer software, tangible personal property, electricity,

4-22

natural gas, artificial gas, steam, refrigeration, and water, when the property or service is

4-23

purchased for the purpose of being manufactured into a finished product for resale, and becomes

4-24

an ingredient, component, or integral part of the manufactured, compounded, processed,

4-25

assembled, or prepared product, or if the property or service is consumed in the process of

4-26

manufacturing for resale computer software, tangible personal property, electricity, natural gas,

4-27

artificial gas, steam, refrigeration, or water.

4-28

      (ii) "Consumed" means destroyed, used up, or worn out to the degree or extent that the

4-29

property cannot be repaired, reconditioned, or rendered fit for further manufacturing use.

4-30

      (iii) "Consumed" includes mere obsolescence.

4-31

      (iv) "Manufacturing" means and includes manufacturing, compounding, processing,

4-32

assembling, preparing, or producing.

4-33

      (v) "Process of manufacturing" means and includes all production operations performed

4-34

in the producing or processing room, shop, or plant, insofar as the operations are a part of and

5-1

connected with the manufacturing for resale of tangible personal property, electricity, natural gas,

5-2

artificial gas, steam, refrigeration, or water and all production operations performed insofar as the

5-3

operations are a part of and connected with the manufacturing for resale of computer software.

5-4

      (vi) "Process of manufacturing" does not mean or include administration operations such

5-5

as general office operations, accounting, collection, sales promotion, nor does it mean or include

5-6

distribution operations which occur subsequent to production operations, such as handling,

5-7

storing, selling, and transporting the manufactured products, even though the administration and

5-8

distribution operations are performed by or in connection with a manufacturing business.

5-9

      (8) State and political subdivisions. - From the sale to, and from the storage, use, or other

5-10

consumption by, this state, any city, town, district, or other political subdivision of this state.

5-11

Every redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a

5-12

subdivision of the municipality wherein it is located.

5-13

      (9) Food products. - (i) From the sale and the storage, use, or other consumption in this

5-14

state, subsequent to March 31, 1948, of food products for human consumption.

5-15

      (ii) "Food products" includes, except as otherwise provided in this subdivision, cereals

5-16

and cereal products; milk and milk products, other than candy and confectionery, but including

5-17

ice cream; oleomargarine; meat and meat products; fish and fish products; eggs and egg products;

5-18

vegetables and vegetable products; fruit and fruit products, including pure fruit juices; spices,

5-19

condiments, and salt; sugar and sugar products other than candy and confectionery; coffee and

5-20

coffee substitutes; tea, cocoa, and cocoa products, other than candy and confectionery; and

5-21

noncarbonated and noneffervescent bottled waters sold for human consumption.

5-22

      (iii) "Food products" does not include spirituous, malt, or vinous liquors; soft drinks,

5-23

sodas, or beverages that are ordinarily dispensed at bars or soda fountains or in connection

5-24

therewith; medicines, tonics, vitamins, and preparations in liquid, powdered, granular, tablet,

5-25

capsule, lozenge, or pill form, sold as dietary supplements or adjuncts, except when sold on the

5-26

prescription of a physician; or mineral and carbonated bottled waters and ice.

5-27

      (iv) "Food products" also does not include meals served on or off the premises of the

5-28

retailer; or drinks or food furnished, prepared, or served for consumption at tables, chairs, or

5-29

counters, or from trays, glasses, dishes, or other tableware provided by the retailer.

5-30

      (v) The sale of meals and other food products ordinarily sold for immediate consumption

5-31

on or off the premises of the retailer is a taxable sale even though the products are sold on a "take

5-32

out" or "to go" order, and are actually packaged or wrapped and taken from the premises.

5-33

      (10) Medicines and drugs. - From the sale and from the storage, use, or other

5-34

consumption in this state, subsequent to March 31, 1948, of "medicines" and "drugs" as defined

6-1

in section 5-19-1 [repealed] sold on prescriptions and proprietary medicines, popularly called

6-2

patent medicines, including, but not limited to, disposable or reusable devices, such as syringe

6-3

infusers, ambulatory drug delivery pumps and supplies used with these items which are sold on

6-4

prescription to individuals to be used by them to dispense or administer prescription drugs, and

6-5

related ancillary dressings and supplies used to dispense or administer prescription drugs.

6-6

      (11) Prosthetic and orthopedic appliances. - From the sale and from the storage, use, or

6-7

other consumption in this state, subsequent to March 31, 1948, of crutches, artificial limbs,

6-8

dentures, spectacles and eyeglasses, artificial eyes, artificial hearing devices, and other prostheses

6-9

or orthopedic appliances, designed and purchased to be worn on the person of the owner or user.

6-10

      (12) Coffins, caskets, and burial garments. - From the sale and from the storage, use, or

6-11

other consumption in this state of coffins or caskets, and shrouds or other burial garments which

6-12

are ordinarily sold by a funeral director as part of the business of funeral directing.

6-13

      (13) Motor vehicles sold to nonresidents. - (i) From the sale, subsequent to June 30,

6-14

1958, of a motor vehicle to a bona fide nonresident of this state who does not register the motor

6-15

vehicle in this state, whether the sale or delivery of the motor vehicle is made in this state or at

6-16

the place of residence of the nonresident; provided, that a motor vehicle sold to a bona fide

6-17

nonresident whose state of residence does not allow a like exemption to its nonresidents is not

6-18

exempt from the tax imposed under section 44-18-20; provided, further, that in that event the

6-19

bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that would

6-20

be imposed in his or her state of residence not to exceed the rate that would have been imposed

6-21

under section 44-18-20. Notwithstanding any other provisions of law, a licensed motor vehicle

6-22

dealer shall add and collect the tax required under this subdivision and remit the tax to the tax

6-23

administrator under the provisions of chapters 18 and 19 of this title. Provided, further, that when

6-24

a Rhode Island licensed motor vehicle dealer is required to add and collect the sales and use tax

6-25

on the sale of a motor vehicle to a bona fide nonresident as provided in this section, the dealer in

6-26

computing the tax takes into consideration the law of the state of the nonresident as it relates to

6-27

the trade-in of motor vehicles.

6-28

      (ii) The tax administrator, in addition to the provisions of sections 44-19-27 and 44-19-

6-29

28, may require any licensed motor vehicle dealer to keep records of sales to bona fide

6-30

nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption

6-31

provided in this subdivision, including the affidavit of a licensed motor vehicle dealer that the

6-32

purchaser of the motor vehicle was the holder of, and had in his or her possession a valid out of

6-33

state motor vehicle registration or a valid out of state driver's license.

6-34

      (iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days

7-1

of the date of its sale to him or her is deemed to have purchased the motor vehicle for use,

7-2

storage, or other consumption in this state, and is subject to, and liable for the use tax imposed

7-3

under the provisions of section 44-18-20.

7-4

      (14) Sales in public buildings by blind people. - From the sale and from the storage, use,

7-5

or other consumption in all public buildings in this state of all products or wares by any person

7-6

licensed under section 40-9-11.1.

7-7

      (15) Air and water pollution control facilities. - From the sale, storage, use, or other

7-8

consumption in this state of tangible personal property or supplies acquired for incorporation into

7-9

or used and consumed in the operation of a facility, the primary purpose of which is to aid in the

7-10

control of the pollution or contamination of the waters or air of the state, as defined in chapter 12

7-11

of title 46 and chapter 25 of title 23, respectively, and which has been certified as approved for

7-12

that purpose by the director of environmental management. The director of environmental

7-13

management may certify to a portion of the tangible personal property or supplies acquired for

7-14

incorporation into those facilities or used and consumed in the operation of those facilities to the

7-15

extent that that portion has as its primary purpose the control of the pollution or contamination of

7-16

the waters or air of this state. As used in this subdivision, "facility" means any land, facility,

7-17

device, building, machinery, or equipment.

7-18

      (16) Camps. - From the rental charged for living quarters, or sleeping or housekeeping

7-19

accommodations at camps or retreat houses operated by religious, charitable, educational, or

7-20

other organizations and associations mentioned in subdivision (5), or by privately owned and

7-21

operated summer camps for children.

7-22

      (17) Certain institutions. - From the rental charged for living or sleeping quarters in an

7-23

institution licensed by the state for the hospitalization, custodial, or nursing care of human beings.

7-24

      (18) Educational institutions. - From the rental charged by any educational institution for

7-25

living quarters, or sleeping or housekeeping accommodations or other rooms or accommodations

7-26

to any student or teacher necessitated by attendance at an educational institution. "Educational

7-27

institution" as used in this section means an institution of learning not operated for profit which is

7-28

empowered to confer diplomas, educational, literary, or academic degrees, which has a regular

7-29

faculty, curriculum, and organized body of pupils or students in attendance throughout the usual

7-30

school year, which keeps and furnishes to students and others records required and accepted for

7-31

entrance to schools of secondary, collegiate, or graduate rank, no part of the net earnings of which

7-32

inures to the benefit of any individual.

7-33

      (19) Motor vehicle and adaptive equipment for persons with disabilities. - (i) From the

7-34

sale of: (A) special adaptations, (B) the component parts of the special adaptations, or (C) a

8-1

specially adapted motor vehicle; provided, that the owner furnishes to the tax administrator an

8-2

affidavit of a licensed physician to the effect that the specially adapted motor vehicle is necessary

8-3

to transport a family member with a disability or where the vehicle has been specially adapted to

8-4

meet the specific needs of the person with a disability. This exemption applies to not more than

8-5

one motor vehicle owned and registered for personal, noncommercial use.

8-6

      (ii) For the purpose of this subsection the term "special adaptations" includes, but is not

8-7

limited to: wheelchair lifts; wheelchair carriers; wheelchair ramps; wheelchair securements; hand

8-8

controls; steering devices; extensions, relocations, and crossovers of operator controls; power

8-9

assisted controls; raised tops or dropped floors; raised entry doors; or alternative signaling

8-10

devices to auditory signals.

8-11

      (iii) For the purpose of this subdivision the exemption for a "specially adapted motor

8-12

vehicle" means a use tax credit not to exceed the amount of use tax that would otherwise be due

8-13

on the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the

8-14

special adaptations, including installation.

8-15

      (20) Heating fuels. - From the sale and from the storage, use, or other consumption in

8-16

this state of every type of fuel used in the heating of homes and residential premises.

8-17

      (21) Electricity and gas. - From the sale and from the storage, use, or other consumption

8-18

in this state of electricity and gas furnished for domestic use by occupants of residential premises.

8-19

      (22) Manufacturing machinery and equipment. - (i) From the sale and from the storage,

8-20

use, or other consumption in this state of tools, dies, and molds, and machinery and equipment

8-21

(including replacement parts), and related items to the extent used in an industrial plant in

8-22

connection with the actual manufacture, conversion, or processing of tangible personal property,

8-23

or to the extent used in connection with the actual manufacture, conversion or processing of

8-24

computer software as that term is utilized in industry numbers 7371, 7372, and 7373 in the

8-25

standard industrial classification manual prepared by the technical committee on industrial

8-26

classification, office of statistical standards, executive office of the president, United States

8-27

bureau of the budget, as revised from time to time, to be sold, or that machinery and equipment

8-28

used in the furnishing of power to an industrial manufacturing plant. For the purposes of this

8-29

subdivision, the term "industrial plant" means a factory at a fixed location primarily engaged in

8-30

the manufacture, conversion, or processing of tangible personal property to be sold in the regular

8-31

course of business;

8-32

      (ii) Machinery and equipment and related items are not deemed to be used in connection

8-33

with the actual manufacture, conversion, or processing of tangible personal property, or in

8-34

connection with the actual manufacture, conversion or processing of computer software as that

9-1

term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification

9-2

manual prepared by the technical committee on industrial classification, office of statistical

9-3

standards, executive office of the president, United States bureau of the budget, as revised from

9-4

time to time, to be sold to the extent the property is used in administration or distribution

9-5

operations;

9-6

      (iii) Machinery and equipment and related items used in connection with the actual

9-7

manufacture, conversion, or processing of any computer software or any tangible personal

9-8

property which is not to be sold and which would be exempt under subdivision (7) or this

9-9

subdivision if purchased from a vendor or machinery and equipment and related items used

9-10

during any manufacturing, converting or processing function is exempt under this subdivision

9-11

even if that operation, function, or purpose is not an integral or essential part of a continuous

9-12

production flow or manufacturing process;

9-13

      (iv) Where a portion of a group of portable or mobile machinery is used in connection

9-14

with the actual manufacture, conversion, or processing of computer software or tangible personal

9-15

property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under

9-16

this subdivision even though the machinery in that group is used interchangeably and not

9-17

otherwise identifiable as to use.

9-18

      (23) Trade in value of motor vehicles. - From the sale and from the storage, use, or other

9-19

consumption in this state of so much of the purchase price paid for a new or used automobile as is

9-20

allocated for a trade in allowance on the automobile of the buyer given in trade to the seller or of

9-21

the proceeds applicable only to the motor vehicle as are received from an insurance claim as a

9-22

result of a stolen or damaged motor vehicle, or of the proceeds applicable only to the automobile

9-23

as are received from the manufacturer of automobiles for the repurchase of the automobile

9-24

whether the repurchase was voluntary or not towards the purchase of a new or used automobile

9-25

by the buyer; provided, that the proceeds from an insurance claim or repurchase is in lieu of the

9-26

benefit prescribed in section 44-18-21 for the total loss or destruction of the automobile; and

9-27

provided, further, that the tax has not been reimbursed as part of the insurance claim or

9-28

repurchase. For the purpose of this subdivision, the word "automobile" means a private passenger

9-29

automobile not used for hire and does not refer to any other type of motor vehicle.

9-30

      (24) Precious metal bullion. - (i) From the sale and from the storage, use, or other

9-31

consumption in this state of precious metal bullion, substantially equivalent to a transaction in

9-32

securities or commodities.

9-33

      (ii) For purposes of this subdivision, "precious metal bullion" means any elementary

9-34

precious metal which has been put through a process of smelting or refining, including, but not

10-1

limited to, gold, silver, platinum, rhodium, and chromium, and which is in a state or condition

10-2

that its value depends upon its content and not upon its form.

10-3

      (iii) The term does not include fabricated precious metal which has been processed or

10-4

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

10-5

uses.

10-6

      (25) [Deleted by P.L. 2000, ch. 109, section 48.]

10-7

      (26) Commercial vessels. - From sales made to a commercial ship, barge, or other vessel

10-8

of fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from

10-9

the repair, alteration, or conversion of the vessels, and from the sale of property purchased for the

10-10

use of the vessels including provisions, supplies, and material for the maintenance and/or repair

10-11

of the vessels.

10-12

      (27) Commercial fishing vessels. - From the sale and from the storage, use, or other

10-13

consumption in this state of vessels and other water craft which are in excess of five (5) net tons

10-14

and which are used exclusively for "commercial fishing", as defined in this subdivision, and from

10-15

the repair, alteration, or conversion of those vessels and other watercraft, and from the sale of

10-16

property purchased for the use of those vessels and other watercraft including provisions,

10-17

supplies, and material for the maintenance and/or repair of the vessels and other watercraft and

10-18

the boats' nets, cables, tackle, and other fishing equipment appurtenant to or used in connection

10-19

with the commercial fishing of the vessels and other watercraft. "Commercial fishing" means the

10-20

taking or the attempting to take any fish, shellfish, crustacea, or bait species with the intent of

10-21

disposing of them for profit or by sale, barter, trade, or in commercial channels. The term does

10-22

not include subsistence fishing, i.e., the taking for personal use and not for sale or barter; or sport

10-23

fishing; but shall include vessels and other watercraft with a Rhode Island party and charter boat

10-24

license issued by the department of environmental management pursuant to section 20-2-27.1

10-25

which meet the following criteria: (i) the operator must have a current U.S.C.G. license to carry

10-26

passengers for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii)

10-27

U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a Rhode Island

10-28

boat registration to prove Rhode Island home port status; (iv) the vessel must be used as a

10-29

commercial passenger carrying fishing vessel to carry passengers for fishing. The vessel must be

10-30

able to demonstrate that at least fifty percent (50%) of its annual gross income derives from

10-31

charters or provides documentation of a minimum of one hundred (100) charter trips annually; (v)

10-32

the vessel must have a valid Rhode Island party and charter boat license. The tax administrator

10-33

shall implement the provisions of this subdivision by promulgating rules and regulations relating

10-34

thereto.

11-1

      (28) Clothing and footwear. - From the sales of articles of clothing, including footwear,

11-2

intended to be worn or carried on or about the human body. For the purposes of this section,

11-3

"clothing or footwear" does not include special clothing or footwear primarily designed for

11-4

athletic activity or protective use and which is not normally worn except when so used; and sales

11-5

of wearing materials or any cloth made of natural or synthetic fibers and used for clothing

11-6

purposes.

11-7

      (29) Water for residential use. - From the sale and from the storage, use, or other

11-8

consumption in this state of water furnished for domestic use by occupants of residential

11-9

premises.

11-10

      (30) Bibles. - [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see

11-11

Notes to Decisions.]From the sale and from the storage, use, or other consumption in the state of

11-12

any canonized scriptures of any tax exempt non profit religious organization including, but not

11-13

limited to, the Old Testament and the New Testament versions.

11-14

      (31) Boats. - (i) From the sale of a boat or vessel to a bona fide nonresident of this state

11-15

who does not register the boat or vessel in this state, or document the boat or vessel with the

11-16

United States government at a home port within the state, whether the sale or delivery of the boat

11-17

or vessel is made in this state or elsewhere; provided, that the nonresident transports the boat

11-18

within thirty (30) days after delivery by the seller, outside the state for use thereafter solely

11-19

outside the state.

11-20

      (ii) The tax administrator, in addition to the provisions of sections 44-19-17 and 44-19-

11-21

28, may require the seller of the boat or vessel to keep records of the sales to bona fide

11-22

nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption

11-23

provided in this subdivision, including the affidavit of the seller that the buyer represented

11-24

himself or herself to be a bona fide nonresident of this state and of the buyer that he or she is a

11-25

nonresident of this state.

11-26

      (32) Youth activities equipment. - From the sale, storage, use, or other consumption in

11-27

this state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island

11-28

eleemosynary organizations, for the purposes of youth activities which the organization is formed

11-29

to sponsor and support; and by accredited elementary and secondary schools for the purposes of

11-30

the schools or of organized activities of the enrolled students.

11-31

      (33) Farm equipment. - From the sale and from the storage or use of machinery and

11-32

equipment used directly for commercial farming and agricultural production; including, but not

11-33

limited to, tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors,

11-34

balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment,

12-1

greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and

12-2

other farming equipment, including replacement parts, appurtenant to or used in connection with

12-3

commercial farming and tools and supplies used in the repair and maintenance of farming

12-4

equipment. "Commercial farming" means the keeping or boarding of five (5) or more horses or

12-5

the production within this state of agricultural products, including, but not limited to, field or

12-6

orchard crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or

12-7

production provides at least two thousand five hundred dollars ($2,500) in annual gross sales to

12-8

the operator, whether an individual, a group, a partnership, or a corporation for exemptions issued

12-9

prior to July 1, 2002; for exemptions issued or renewed after July 1, 2002, there shall be two (2)

12-10

levels. Level I shall be based on proof of annual gross sales from commercial farming of at least

12-11

twenty-five hundred dollars ($2,500) and shall be valid for purchases subject to the exemption

12-12

provided in this subdivision except for motor vehicles with an excise tax value of five thousand

12-13

dollars ($5,000) or less; Level II shall be based on proof of annual gross sales from commercial

12-14

farming of at least ten thousand dollars ($10,000) or greater and shall be valid for purchases

12-15

subject to the exemption provided in this subdivision including motor vehicles with an excise tax

12-16

value of five thousand dollars ($5,000) or greater. For the initial issuance of the exemptions,

12-17

proof of the requisite amount of annual gross sales from commercial farming shall be required for

12-18

the prior year; for any renewal of an exemption granted in accordance with this subdivision at

12-19

either Level I or Level II, proof of gross annual sales from commercial farming at the requisite

12-20

amount shall be required for each of the prior two (2) years. Certificates of exemption issued or

12-21

renewed after July 1, 2002 shall clearly indicate the level of the exemption and be valid for four

12-22

(4) years after the date of issue. This exemption applies even if the same equipment is used for

12-23

ancillary uses, or is temporarily used for a non-farming or a non-agricultural purpose, but shall

12-24

not apply to motor vehicles acquired after July 1, 2002, unless the vehicle is a farm vehicle as

12-25

defined pursuant to section 31-1-8 and is eligible for registration displaying farm plates as

12-26

provided for in section 31-3-31.

12-27

      (34) Compressed air. - From the sale and from the storage, use, or other consumption in

12-28

the state of compressed air.

12-29

      (35) Flags. - From the sale and from the storage, consumption, or other use in this state

12-30

of United States, Rhode Island or POW-MIA flags.

12-31

      (36) Motor vehicle and adaptive equipment to certain veterans. - From the sale of a

12-32

motor vehicle and adaptive equipment to and for the use of a veteran with a service connected

12-33

loss of or the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee,

12-34

whether service connected or not. The motor vehicle must be purchased by and especially

13-1

equipped for use by the qualifying veteran. Certificate of exemption or refunds of taxes paid is

13-2

granted under rules or regulations that the tax administrator may prescribe.

13-3

      (37) Textbooks. - From the sale and from the storage, use, or other consumption in this

13-4

state of textbooks by an "educational institution" as defined in subdivision (18) and as well as any

13-5

educational institution within the purview of section 16-63-9(4) and used textbooks by any

13-6

purveyor.

13-7

      (38) Tangible personal property and supplies used in on-site hazardous waste recycling,

13-8

reuse, or treatment. - From the sale, storage, use, or other consumption in this state of tangible

13-9

personal property or supplies used or consumed in the operation of equipment, the exclusive

13-10

function of which is the recycling, reuse, or recovery of materials (other than precious metals, as

13-11

defined in subdivision (24)(ii)) from the treatment of "hazardous wastes", as defined in section

13-12

23-19.1-4, where the "hazardous wastes" are generated in Rhode Island solely by the same

13-13

taxpayer and where the personal property is located at, in, or adjacent to a generating facility of

13-14

the taxpayer in Rhode Island. The taxpayer shall procure an order from the director of the

13-15

department of environmental management certifying that the equipment and/or supplies as used,

13-16

or consumed, qualify for the exemption under this subdivision. If any information relating to

13-17

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

13-18

department of environmental management only to procure an order, and is a "trade secret" as

13-19

defined in section 28-21-10(b), it is not open to public inspection or publicly disclosed unless

13-20

disclosure is required under chapter 21 of title 28 or chapter 24.4 of title 23.

13-21

      (39) Promotional and product literature of boat manufacturers. - From the sale and from

13-22

the storage, use, or other consumption of promotional and product literature of boat

13-23

manufacturers shipped to points outside of Rhode Island which either: (i) accompany the product

13-24

which is sold, (ii) are shipped in bulk to out of state dealers for use in the sale of the product, or

13-25

(iii) are mailed to customers at no charge.

13-26

      (40) Food items paid for by food stamps. - From the sale and from the storage, use, or

13-27

other consumption in this state of eligible food items payment for which is properly made to the

13-28

retailer in the form of U.S. government food stamps issued in accordance with the Food Stamp

13-29

Act of 1977, 7 U.S.C. section 2011 et seq., as amended.

13-30

      (41) Transportation charges. - From the sale or hiring of motor carriers as defined in

13-31

section 39-12-2(l) to haul goods, when the contract or hiring cost is charged by a motor freight

13-32

tariff filed with the Rhode Island public utilities commission on the number of miles driven or by

13-33

the number of hours spent on the job.

13-34

      (42) Trade in value of boats. - From the sale and from the storage, use, or other

14-1

consumption in this state of so much of the purchase price paid for a new or used boat as is

14-2

allocated for a trade in allowance on the boat of the buyer given in trade to the seller or of the

14-3

proceeds applicable only to the boat as are received from an insurance claim as a result of a stolen

14-4

or damaged boat, towards the purchase of a new or used boat by the buyer.

14-5

      (43) Equipment used for research and development. - From the sale and from the

14-6

storage, use, or other consumption of equipment to the extent used for research and development

14-7

purposes by a qualifying firm. For the purposes of this subdivision, "qualifying firm" means a

14-8

business for which the use of research and development equipment is an integral part of its

14-9

operation, and "equipment" means scientific equipment, computers, software, and related items.

14-10

      (44) Coins. - From the sale and from the other consumption in this state of coins having

14-11

numismatic or investment value.

14-12

      (45) Farm structure construction materials. - Lumber, hardware and other materials used

14-13

in the new construction of farm structures, including production facilities such as, but not limited

14-14

to, farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying

14-15

houses, fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing

14-16

rooms, machinery storage, seasonal farm worker housing, certified farm markets, bunker and

14-17

trench silos, feed storage sheds, and any other structures used in connection with commercial

14-18

farming.

14-19

      (46) Telecommunications carrier access service. - Carrier access service or

14-20

telecommunications service when purchased by a telecommunications company from another

14-21

telecommunications company to facilitate the provision of telecommunications service.

14-22

      (47) Boats or vessels brought into the state exclusively for winter storage, maintenance,

14-23

repair or sale. - Notwithstanding the provisions of sections 44-18-10, 44-18-11, 44-18-20, the tax

14-24

imposed by section 44-18-20 is not applicable for the period commencing on the first day of

14-25

October in any year to and including the 30th day of April next succeeding with respect to the use

14-26

of any boat or vessel within this state exclusively for purposes of: (i) delivery of the vessel to a

14-27

facility in this state for storage, including dry storage and storage in water by means of apparatus

14-28

preventing ice damage to the hull, maintenance, or repair; (ii) the actual process of storage,

14-29

maintenance, or repair of the boat or vessel; or (iii) storage for the purpose of selling the boat or

14-30

vessel.

14-31

      (48) Jewelry display product. - From the sale and from the storage, use, or other

14-32

consumption in this state of tangible personal property used to display any jewelry product;

14-33

provided, that title to the jewelry display product is transferred by the jewelry manufacturer or

14-34

seller and that the jewelry display product is shipped out of state for use solely outside the state

15-1

and is not returned to the jewelry manufacturer or seller.

15-2

      (49) Boats or vessels generally. - Notwithstanding the provisions of this chapter, the tax

15-3

imposed by sections 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the

15-4

storage, use, or other consumption in this state of any new or used boat. Provided, that the

15-5

exemption provided for in this subdivision does not apply after October 1, 1993 unless prior to

15-6

October 1, 1993 the federal ten percent (10%) surcharge on luxury boats is repealed.

15-7

      (50) Banks and Regulated investment companies interstate toll-free calls. -

15-8

Notwithstanding the provisions of this chapter, the tax imposed by this chapter does not apply to

15-9

the furnishing of interstate and international, toll-free terminating telecommunication service that

15-10

is used directly and exclusively by or for the benefit of an eligible company as defined in this

15-11

subdivision; provided, further, that an eligible company employs on average during the calendar

15-12

year no less than five hundred (500) full-time equivalent employees as that term is defined in

15-13

section 42-64.5-2. For purposes of this section, an "eligible company" means a "regulated

15-14

investment company" as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C.

15-15

section 1 et seq., as amended, or a corporation to the extent the service is provided, directly or

15-16

indirectly, to or on behalf of a regulated investment company, an employee benefit plan, a

15-17

retirement plan or a pension plan or a state chartered bank.

15-18

      (51) Mobile and manufactured homes generally. - From the sale and from the storage,

15-19

use, or other consumption in this state of mobile and/or manufactured homes as defined and

15-20

subject to taxation pursuant to the provisions of chapter 44 of title 31.

15-21

      (52) Alternative fuel. [Effective until January 1, 2003.]- From the sale and from the

15-22

storage, use, or other consumption in this state of alternative fuel, as defined pursuant to the

15-23

Energy Policy Act of 1992 (P.L. 102-486, section 301 (42 U.S.C. section 13211)), from January

15-24

1, 1998 to December 31, 2002.

15-25

      (53) Alternative fueled vehicles. [Effective until January 1, 2003.]- From the sale and

15-26

from the storage, use or other consumption in this state, from January 1, 1998 to December 31,

15-27

2002, of: (i) so much of the purchase price paid for a new dedicated alternative fueled vehicle as

15-28

is allocated to the incremental cost of purchasing a new dedicated alternative fueled vehicle; or

15-29

(ii) or so much of the purchase price paid for a converted gasoline or diesel-fueled motor vehicle

15-30

as is allocated to the cost of conversion; and (iii) all costs associated with the construction of

15-31

filling stations dispensing alternative fuel and motor vehicle electric recharging stations.

15-32

"Alternative fuel" and "alternative fueled vehicle" are defined pursuant to the Energy Policy Act

15-33

of 1992 (P.L. 102-486, section 301 (42 U.S.C. section 13211)). "Incremental costs" means the

15-34

increase to the sale price of an alternative fueled vehicle, above the sale price of a comparable

16-1

motor vehicle similar in all other respects but for the equipment necessary to render it an

16-2

alternative fueled vehicle, which increased sale price is attributable to the vehicle being equipped

16-3

to render it an alternative fueled vehicle.

16-4

      (54) Manufacturing business reconstruction materials. - (i) From the sale and from the

16-5

storage, use or other consumption in this state of lumber, hardware, and other building materials

16-6

used in the reconstruction of a manufacturing business facility which suffers a disaster, as defined

16-7

in this subdivision, in this state. "Disaster" means any occurrence, natural or otherwise, which

16-8

results in the destruction of sixty percent (60%) or more of an operating manufacturing business

16-9

facility within this state. Provided, that "disaster" does not include any damage resulting from the

16-10

willful act of the owner of the manufacturing business facility.

16-11

      (ii) Manufacturing business facility includes, but is not limited to, the structures housing

16-12

the production and administrative facilities.

16-13

      (iii) In the event a manufacturer has more than one manufacturing site in this state, the

16-14

sixty percent (60%) provision applies to the damages suffered at that one site.

16-15

      (iv) To the extent that the cost of the reconstruction material are reimbursed by

16-16

insurance, this exemption does not apply.

16-17

      (55) Tangible personal property and supplies used in the processing or preparation of

16-18

floral products and floral arrangements. - From the sale, storage, use, or other consumption in this

16-19

state of tangible personal property or supplies purchased by florists, garden centers, or other like

16-20

producers or vendors of flowers, plants, floral products, and natural and artificial floral

16-21

arrangements which are ultimately sold with flowers, plants, floral products, and natural and

16-22

artificial floral arrangements or are otherwise used in the decoration, fabrication, creation,

16-23

processing, or preparation of flowers, plants, floral products, or natural and artificial floral

16-24

arrangements, including descriptive labels, stickers, and cards affixed to the flower, plant, floral

16-25

product or arrangement, artificial flowers, spray materials, floral paint and tint, plant shine, flower

16-26

food, insecticide and fertilizers.

16-27

      (56) Horse food products. - From the sale and from the storage, use, or other

16-28

consumption in this state of horse food products purchased by a person engaged in the business of

16-29

the boarding of horses.

16-30

     (57) Aircraft. - From the sale of aircraft, defined to mean any machine or device,

16-31

including airplanes and helicopters, capable of atmospheric flight.

16-32

     (58) Aircraft replacement parts. - From the sale of repair or replacement parts exclusively

16-33

for use in aircraft or in the significant overhauling or rebuilding of aircraft or aircraft parts or

16-34

components on a factory basis.

17-1

     SECTION 3. This act shall take effect upon passage.

=======

LC02186

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO AERONAUTICS

***

18-1

     This act would prohibit certain operations of civil aircraft and would also exempt from

18-2

taxation the gross receipts from the sale of aircraft or aircraft parts.

18-3

     This act would take effect upon passage.

=======

LC02186

=======