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art.021/8/021/7/021/6/021/5/021/4/021/3/021/2/024/1

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ARTICLE 21 AS AMENDED

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RELATING TO TAXATION AND REVENUES

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     SECTION 1. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled

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“Licensing of Health Care Facilities” is hereby amended to read as follows:

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     23-17-38.1. Hospitals – Licensing fee. -- (a) There is imposed a hospital licensing fee at

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the rate of five and four hundred sixty-five thousandths percent (5.465%) upon the net patient

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services revenue of every hospital for the hospital's first fiscal year ending on or after January 1,

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2009. This licensing fee shall be administered and collected by the tax administrator, division of

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taxation within the department of administration, and all the administration, collection and other

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provisions of chapters 50 and 51 of title 44 shall apply. Every hospital shall pay the licensing fee

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to the tax administrator on or before July 18, 2011 and payments shall be made by electronic

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transfer of monies to the general treasurer and deposited to the general fund in accordance with §

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44-50-11 [repealed]. Every hospital shall, on or before June 20, 2011, make a return to the tax

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administrator containing the correct computation of net patient services revenue for the hospital

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fiscal year ending September 30, 2009, and the licensing fee due upon that amount. All returns

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shall be signed by the hospital's authorized representative, subject to the pains and penalties of

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perjury.

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     (b)(a) There is also imposed a hospital licensing fee at the rate of five and forty-three

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hundredths percent (5.43%) upon the net patient services revenue of every hospital for the

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hospital's first fiscal year ending on or after January 1, 2010. This licensing fee shall be

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administered and collected by the tax administrator, division of taxation within the department of

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administration, and all the administration, collection and other provisions of chapters 50 and 51 of

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title 44 shall apply. Every hospital shall pay the licensing fee to the tax administrator on or before

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July 16, 2012 and payments shall be made by electronic transfer of monies to the general

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treasurer and deposited to the general fund in accordance with section 44-50-11 [repealed]. Every

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hospital shall, on or before June 18, 2012, make a return to the tax administrator containing the

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correct computation of net patient services revenue for the hospital fiscal year ending September

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30, 2010, and the licensing fee due upon that amount. All returns shall be signed by the hospital's

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authorized representative, subject to the pains and penalties of perjury.

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     (b) There is also imposed a hospital licensing fee at the rate of five and thirty-five

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hundredths percent (5.35%) upon the net patient services revenue of every hospital for the

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hospital's first fiscal year ending on or after January 1, 2011, except that the license fee for all

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hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent

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(37%). The discount for Washington County hospitals is subject to approval by the Secretary of

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the US Department of Health and Human Services of a state plan amendment submitted by the

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Executive Office of Health and Human Services for the purpose of pursuing a waiver of the

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uniformity requirement for the hospital license fee. This licensing fee shall be administered and

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collected by the tax administrator, division of taxation within the department of revenue, and all

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the administration, collection and other provisions of 51 of title 44 shall apply. Every hospital

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shall pay the licensing fee to the tax administrator on or before July 15, 2013 and payments shall

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be made by electronic transfer of monies to the general treasurer and deposited to the general

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fund. Every hospital shall, on or before June 17, 2013, make a return to the tax administrator

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containing the correct computation of net patient services revenue for the hospital fiscal year

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ending September 30, 2011, and the licensing fee due upon that amount. All returns shall be

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signed by the hospital's authorized representative, subject to the pains and penalties of perjury.

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     (c) For purposes of this section the following words and phrases have the following

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meanings:

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     (1) "Hospital" means a person or governmental unit duly licensed in accordance with this

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chapter to establish, maintain, and operate a hospital, except a hospital whose primary service and

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primary bed inventory are psychiatric.

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     (2) "Gross patient services revenue" means the gross revenue related to patient care

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services.

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     (3) "Net patient services revenue" means the charges related to patient care services less

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(i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

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     (d) The tax administrator shall make and promulgate any rules, regulations, and

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procedures not inconsistent with state law and fiscal procedures that he or she deems necessary

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for the proper administration of this section and to carry out the provisions, policy and purposes

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of this section.

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     (e) The licensing fee imposed by this section shall apply to hospitals as defined herein

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which are duly licensed on July 1, 2011 2012, and shall be in addition to the inspection fee

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imposed by § 23-17-38 and to any licensing fees previously imposed in accordance with § 23-17-

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38.1.

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     SECTION 2. Title 44 of the General Laws entitled “TAXATION” is hereby amended by

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adding thereto the following chapter:

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     CHAPTER 44-6.4

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     2012 RHODE ISLAND TAX AMNESTY ACT

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     44-6.4-1. Short title. -- This chapter shall be known as the "2012 Rhode Island Tax

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Amnesty Act".

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     44-6.4-2. Definitions. -- As used in this chapter, the following terms have the meaning

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ascribed to them in this section, except when the context clearly indicates a different meaning:

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     (1) "Taxable period" means any period for which a tax return is required by law to be

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filed with the tax administrator;

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     (2) "Taxpayer" means any person, corporation, or other entity subject to any tax imposed

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by any law of the state of Rhode Island and payable to the state of Rhode Island and collected by

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the tax administrator.

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     44-6.4-3. Establishment of tax amnesty. -- (a) The tax administrator shall establish a tax

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amnesty program for all taxpayers owing any tax imposed by reason of or pursuant to

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authorization by any law of the state of Rhode Island and collected by the tax administrator.

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Amnesty tax return forms shall be prepared by the tax administrator and shall provide that the

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taxpayer clearly specify the tax due and the taxable period for which amnesty is being sought by

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the taxpayer.

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     (b) The amnesty program shall be conducted for a seventy-five (75) day period ending on

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November 15, 2012. The amnesty program shall provide that, upon written application by a

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taxpayer and payment by the taxpayer of all taxes and interest due from the taxpayer to the state

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of Rhode Island for any taxable period ending on or prior to December 31, 2011, the tax

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administrator shall not seek to collect any penalties which may be applicable and shall not seek

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the civil or criminal prosecution of any taxpayer for the taxable period for which amnesty has

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been granted. Amnesty shall be granted only to those taxpayers applying for amnesty during the

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amnesty period who have paid the tax and interest due upon filing the amnesty tax return, or who

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have entered into an installment payment agreement for reasons of financial hardship and upon

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terms and conditions set by the tax administrator. In the case of the failure of a taxpayer to pay

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any installment due under the agreement, such an agreement shall cease to be effective and the

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balance of the amounts required to be paid thereunder shall be due immediately. Amnesty shall be

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granted for only the taxable period specified in the application and only if all amnesty conditions

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are satisfied by the taxpayer.

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     (c) The provisions of this section shall include a taxable period for which a bill or notice

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of deficiency determination has been sent to the taxpayer and a taxable period in which an audit

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has been completed but has not yet been billed.

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     (d) Amnesty shall not be granted to taxpayers who are under any criminal investigation or

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are a party to any civil or criminal proceeding, pending in any court of the United States or the

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state of Rhode Island, for fraud in relation to any state tax imposed by the law of the state and

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collected by the tax administrator.

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     44-6.4-4. Interest under tax amnesty. -- Notwithstanding any provision of law to the

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contrary, interest on any taxes paid for periods covered under the amnesty provisions of this

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chapter shall be computed at the rate imposed under section 44-1-7, reduced by twenty five

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percent (25%).

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     44-6.4-5. Appropriation. -- There is hereby appropriated, out of any money in the

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treasury not otherwise appropriated for the 2013 fiscal year, the sum of three hundred thousand

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dollars ($300,000) to the division of taxation to carry out the purposes of this chapter. The state

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controller is hereby authorized and directed to draw his or her orders upon the general treasurer

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for the payment of the sum or so much thereof as may be required from time to time and upon

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receipt by him of properly authenticated vouchers.

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     44-6.4-6. Implementation. -- Notwithstanding any provision of law to the contrary, the

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tax administrator may do all things necessary in order to provide for the timely implementation of

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this chapter, including, but not limited to, procurement of printing and other services and

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expenditure of appropriated funds as provided for in section 44-6.4-5.

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     44-6.4-7. Disposition of monies. -- (a) Except as provided in subsection (b) within, all

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monies collected pursuant to any tax imposed by the state of Rhode Island under the provisions of

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this chapter shall be accounted for separately and paid into the general fund.

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     (b) Monies collected for the establishment of the TDI Reserve Fund (section 28-39-7),

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the Employment Security Fund (section 28-42-18), the Employment Security Interest Fund

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(section 28-42-75), the Job Development Fund (section 28-42-83), and the Employment Security

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Reemployment Fund (section 28-42-87) shall be deposited in said respective funds.

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     44-6.4-8. Analysis of amnesty program by tax administrator. -- The tax administrator

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shall provide an analysis of the amnesty program to the chairpersons of the house finance

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committee and senate finance committee, with copies to the members of the revenue estimating

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conference, by January 1, 2013. The report shall include an analysis of revenues received by tax

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source, distinguishing between the tax collected and interest collected for each source. In

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addition, the report shall further identify the amounts that are new revenues from those already

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included in the general revenue receivable taxes, defined under generally accepted accounting

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principles and the state's audited financial statements.

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     44-6.4-9. Rules and regulations.-- The tax administrator may promulgate such rules and

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regulations as are necessary to implement the provisions of this chapter.

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     SECTION 3. Sections 44-18-7, 44-18-8, 44-18-12, 44-18-15, 44-18-18, 44-18-20, 44-18-

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21, 44-18-22, 44-18-23, 44-18-25 and 44-18-30 of the General Laws in Chapter 44-18 entitled

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“Sales and Use Taxes – Liability and Computation” are hereby amended to read as follows:

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     44-18-7. Sales defined [effective until October 1, 2012]. --"Sales" means and includes:

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     (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or

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otherwise, in any manner or by any means of tangible personal property for a consideration.

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"Transfer of possession", "lease", or "rental" includes transactions found by the tax administrator

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to be in lieu of a transfer of title, exchange, or barter.

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     (2) The producing, fabricating, processing, printing, or imprinting of tangible personal

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property for a consideration for consumers who furnish either directly or indirectly the materials

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used in the producing, fabricating, processing, printing, or imprinting.

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     (3) The furnishing and distributing of tangible personal property for a consideration by

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social, athletic, and similar clubs and fraternal organizations to their members or others.

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     (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks,

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including any cover, minimum, entertainment, or other charge in connection therewith.

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     (5) A transaction whereby the possession of tangible personal property is transferred, but

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the seller retains the title as security for the payment of the price.

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     (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate

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commerce, of tangible personal property from the place where it is located for delivery to a point

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in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental,

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conditional or otherwise, in any manner or by any means whatsoever, of the property for a

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consideration.

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     (7) A transfer for a consideration of the title or possession of tangible personal property,

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which has been produced, fabricated, or printed to the special order of the customer, or any

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publication.

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     (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam,

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refrigeration, and water.

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     (9) The furnishing for consideration of intrastate, interstate and international

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telecommunications service sourced in this state in accordance with subsections 44-18.1(15) and

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

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than as provided for in subdivision 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this

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title only, telecommunication service does not include service rendered using a prepaid telephone

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calling arrangement.

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     (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance

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with the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 – 126), subject to the

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specific exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8

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and 44-18-12, mobile telecommunications services that are deemed to be provided by the

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customer's home service provider are subject to tax under this chapter if the customer's place of

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primary use is in this state regardless of where the mobile telecommunications services originate,

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terminate or pass through. Mobile telecommunications services provided to a customer, the

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charges for which are billed by or for the customer's home service provider, shall be deemed to be

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provided by the customer's home service provider.

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     (10) The furnishing of service for transmission of messages by telegraph, cable, or radio

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and the furnishing of community antenna television, subscription television, and cable television

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services.

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     (11) The rental of living quarters in any hotel, rooming house, or tourist camp.

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     (12) The transfer for consideration of prepaid telephone calling arrangements and the

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recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§

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

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calling service and prepaid wireless calling service.

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     (13) The furnishing of package tour and scenic and sightseeing transportation services as

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set forth in the 2007 North American Industrial Classification System codes 561520 and 487

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provided that such services are conducted in the state, in whole or in part. Said services include

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all activities engaged in for other persons for a fee, retainer, commission, or other monetary

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charge, which activities involve the performance of a service as distinguished from selling

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property.

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

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in paragraph 44-18-7.1(h)(ii).

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

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

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     (16)(15) The sale, storage, use or other consumption of medical marijuana as defined in

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§21-28.6-3.

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     44-18-7. Sales defined [effective October 1, 2012]. --"Sales" means and includes:

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     (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or

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otherwise, in any manner or by any means of tangible personal property for a consideration.

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"Transfer of possession", "lease", or "rental" includes transactions found by the tax administrator

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to be in lieu of a transfer of title, exchange, or barter.

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     (2) The producing, fabricating, processing, printing, or imprinting of tangible personal

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property for a consideration for consumers who furnish either directly or indirectly the materials

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used in the producing, fabricating, processing, printing, or imprinting.

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     (3) The furnishing and distributing of tangible personal property for a consideration by

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social, athletic, and similar clubs and fraternal organizations to their members or others.

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     (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks,

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including any cover, minimum, entertainment, or other charge in connection therewith.

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     (5) A transaction whereby the possession of tangible personal property is transferred, but

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the seller retains the title as security for the payment of the price.

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     (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate

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commerce, of tangible personal property from the place where it is located for delivery to a point

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in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental,

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conditional or otherwise, in any manner or by any means whatsoever, of the property for a

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consideration.

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     (7) A transfer for a consideration of the title or possession of tangible personal property,

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which has been produced, fabricated, or printed to the special order of the customer, or any

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publication.

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     (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam,

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refrigeration, and water.

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     (9) The furnishing for consideration of intrastate, interstate and international

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telecommunications service sourced in this state in accordance with subsections 44-18.1(15) and

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

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than as provided for in subdivision 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this

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title only, telecommunication service does not include service rendered using a prepaid telephone

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calling arrangement.

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     (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance

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with the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 – 126), subject to the

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specific exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8

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and 44-18-12, mobile telecommunications services that are deemed to be provided by the

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customer's home service provider are subject to tax under this chapter if the customer's place of

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primary use is in this state regardless of where the mobile telecommunications services originate,

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terminate or pass through. Mobile telecommunications services provided to a customer, the

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charges for which are billed by or for the customer's home service provider, shall be deemed to be

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provided by the customer's home service provider.

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     (10) The furnishing of service for transmission of messages by telegraph, cable, or radio

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and the furnishing of community antenna television, subscription television, and cable television

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services.

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     (11) The rental of living quarters in any hotel, rooming house, or tourist camp.

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     (12) The transfer for consideration of prepaid telephone calling arrangements and the

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recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§

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

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calling service and prepaid wireless calling service.

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

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paragraph 44-18-7.1(h)(ii).

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

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

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     (15) The sale, storage, use or other consumption of medical marijuana as defined in §21-

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28.6-3.

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     (16) The furnishing of services in this state as defined in section 44-18-7.3.

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     44-18-8. Retail sale or sale at retail defined [effective until October 1, 2012]. -- A

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"retail sale" or "sale at retail" means any sale, lease or rentals of tangible personal property,

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prewritten computer software delivered electronically or by load and leave, and/or package tour

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and scenic and sightseeing transportation services, for any purpose other than resale, sublease or

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subrent in the regular course of business. The sale of tangible personal property to be used for

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purposes of rental in the regular course of business is considered to be a sale for resale. In regard

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to telecommunications service as defined in § 44-18-7(9), retail sale does not include the

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purchase of telecommunications service by a telecommunications provider from another

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telecommunication provider for resale to the ultimate consumer; provided, that the purchaser

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submits to the seller a certificate attesting to the applicability of this exclusion, upon receipt of

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which the seller is relieved of any tax liability for the sale.

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     44-18-8. Retail sale or sale at retail defined [effective October 1, 2012]. -- A "retail

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sale" or "sale at retail" means any sale, lease or rentals of tangible personal property, prewritten

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computer software delivered electronically or by load and leave, or services as defined in section

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44-18-7.3 for any purpose other than resale, sublease or subrent in the regular course of business.

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The sale of tangible personal property to be used for purposes of rental in the regular course of

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business is considered to be a sale for resale. In regard to telecommunications service as defined

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in § 44-18-7(9), retail sale does not include the purchase of telecommunications service by a

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telecommunications provider from another telecommunication provider for resale to the ultimate

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consumer; provided, that the purchaser submits to the seller a certificate attesting to the

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applicability of this exclusion, upon receipt of which the seller is relieved of any tax liability for

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the sale.

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     44-18-12. Sale price" defined [effective until October 1, 2012]. -- (a) "Sales price"

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applies to the measure subject to sales tax and means the total amount of consideration, including

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cash, credit, property, and services, for which personal property or services are sold, leased, or

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rented, valued in money, whether received in money or otherwise, without any deduction for the

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following:

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     (i) The seller's cost of the property sold;

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     (ii) The cost of materials used, labor or service cost, interest, losses, all costs of

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transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

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     (iii) Charges by the seller for any services necessary to complete the sale, other than

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delivery and installation charges;

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     (iv) Delivery charges, as defined in § 44-18-7.1(i);

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     (v) Credit for any trade-in, as determined by state law;

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     (vi) The amount charged for package tour and scenic and sightseeing transportation

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services; or

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     (b) "Sales price" shall not include:

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     (i) Discounts, including cash, term, or coupons that are not reimbursed by a third party

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that are allowed by a seller and taken by a purchaser on a sale;

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     (ii) The amount charged for labor or services, except for package tours and scenic and

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sightseeing transportation services, rendered in installing or applying the property sold when the

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charge is separately stated by the retailer to the purchaser; provided that in transactions subject to

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the provisions of this chapter the retailer shall separately state such charge when requested by the

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purchaser and, further, the failure to separately state such charge when requested may be

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restrained in the same manner as other unlawful acts or practices prescribed in chapter 13.1 of

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title 6.

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     (iii) Interest, financing, and carrying charges from credit extended on the sale of personal

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property or services, if the amount is separately stated on the invoice, bill of sale or similar

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document given to the purchaser; and

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     (iv) Any taxes legally imposed directly on the consumer that are separately stated on the

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invoice, bill of sale or similar document given to the purchaser.

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     (v) Manufacturer rebates allowed on the sale of motor vehicles.

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     (c) "Sales price" shall include consideration received by the seller from third parties if:

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     (i) The seller actually receives consideration from a party other than the purchaser and the

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consideration is directly related to a price reduction or discount on the sale;

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     (ii) The seller has an obligation to pass the price reduction or discount through to the

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purchaser;

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     (iii) The amount of the consideration attributable to the sale is fixed and determinable by

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the seller at the time of the sale of the item to the purchaser; and

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     (iv) One of the following criteria is met:

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     (A) The purchaser presents a coupon, certificate or other documentation to the seller to

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claim a price reduction or discount where the coupon, certificate or documentation is authorized,

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distributed or granted by a third party with the understanding that the third party will reimburse

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any seller to whom the coupon, certificate or documentation is presented;

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     (B) The purchaser identifies himself or herself to the seller as a member of a group or

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organization entitled to a price reduction or discount (a "preferred customer" card that is available

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to any patron does not constitute membership in such a group), or

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     (C) The price reduction or discount is identified as a third party price reduction or

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discount on the invoice received by the purchaser or on a coupon, certificate or other

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documentation presented by the purchaser.

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     44-18-12. Sale price" defined [effective October 1, 2012]. -- (a) "Sales price" applies to

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the measure subject to sales tax and means the total amount of consideration, including cash,

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credit, property, and services, for which personal property or services are sold, leased, or rented,

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valued in money, whether received in money or otherwise, without any deduction for the

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following:

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     (i) The seller's cost of the property sold;

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     (ii) The cost of materials used, labor or service cost, interest, losses, all costs of

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transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

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     (iii) Charges by the seller for any services necessary to complete the sale, other than

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delivery and installation charges;

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     (iv) Delivery charges, as defined in § 44-18-7.1(i);

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     (v) Credit for any trade-in, as determined by state law; or

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     (vi) The amount charged for services, as defined in section 44-18-7.3.

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     (b) "Sales price" shall not include:

10-65

     (i) Discounts, including cash, term, or coupons that are not reimbursed by a third party

10-66

that are allowed by a seller and taken by a purchaser on a sale;

10-67

     (ii) The amount charged for labor or services rendered in installing or applying the

10-68

property sold when the charge is separately stated by the retailer to the purchaser; provided that in

11-1

transactions subject to the provisions of this chapter the retailer shall separately state such charge

11-2

when requested by the purchaser and, further, the failure to separately state such charge when

11-3

requested may be restrained in the same manner as other unlawful acts or practices prescribed in

11-4

chapter 13.1 of title 6.

11-5

     (iii) Interest, financing, and carrying charges from credit extended on the sale of personal

11-6

property or services, if the amount is separately stated on the invoice, bill of sale or similar

11-7

document given to the purchaser; and

11-8

     (iv) Any taxes legally imposed directly on the consumer that are separately stated on the

11-9

invoice, bill of sale or similar document given to the purchaser.

11-10

     (v) Manufacturer rebates allowed on the sale of motor vehicles.

11-11

     (c) "Sales price" shall include consideration received by the seller from third parties if:

11-12

     (i) The seller actually receives consideration from a party other than the purchaser and the

11-13

consideration is directly related to a price reduction or discount on the sale;

11-14

     (ii) The seller has an obligation to pass the price reduction or discount through to the

11-15

purchaser;

11-16

     (iii) The amount of the consideration attributable to the sale is fixed and determinable by

11-17

the seller at the time of the sale of the item to the purchaser; and

11-18

     (iv) One of the following criteria is met:

11-19

     (A) The purchaser presents a coupon, certificate or other documentation to the seller to

11-20

claim a price reduction or discount where the coupon, certificate or documentation is authorized,

11-21

distributed or granted by a third party with the understanding that the third party will reimburse

11-22

any seller to whom the coupon, certificate or documentation is presented;

11-23

     (B) The purchaser identifies himself or herself to the seller as a member of a group or

11-24

organization entitled to a price reduction or discount (a "preferred customer" card that is available

11-25

to any patron does not constitute membership in such a group), or

11-26

     (C) The price reduction or discount is identified as a third party price reduction or

11-27

discount on the invoice received by the purchaser or on a coupon, certificate or other

11-28

documentation presented by the purchaser.

11-29

     44-18-15."Retailer" defined [effective until October 1, 2012].-- (a) "Retailer" includes:

11-30

     (1) Every person engaged in the business of making sales at retail, prewritten computer

11-31

software delivered electronically or by load and leave, and/or package tour and scenic and

11-32

sightseeing transportation services, including sales at auction of tangible personal property owned

11-33

by the person or others.

12-34

     (2) Every person making sales of tangible personal property, prewritten computer

12-35

software delivered electronically or by load and leave, and/or package tour and scenic and

12-36

sightseeing transportation services, through an independent contractor or other representative, if

12-37

the retailer enters into an agreement with a resident of this state, under which the resident, for a

12-38

commission or other consideration, directly or indirectly refers potential customers, whether by a

12-39

link on an Internet website or otherwise, to the retailer, provided the cumulative gross receipts

12-40

from sales by the retailer to customers in the state who are referred to the retailer by all residents

12-41

with this type of an agreement with the retailer, is in excess of five thousand dollars ($5,000)

12-42

during the preceding four (4) quarterly periods ending on the last day of March, June, September

12-43

and December. Such retailer shall be presumed to be soliciting business through such independent

12-44

contractor or other representative, which presumption may be rebutted by proof that the resident

12-45

with whom the retailer has an agreement did not engage in any solicitation in the state on behalf

12-46

of the retailer that would satisfy the nexus requirement of the United States Constitution during

12-47

such four (4) quarterly periods.

12-48

     (3) Every person engaged in the business of making sales for storage, use, or other

12-49

consumption, or the business of making sales at auction of tangible personal property, for storage,

12-50

use, or other consumption prewritten computer software delivered electronically or by load and

12-51

leave, and/or package tour and scenic and sightseeing transportation services, owned by the

12-52

person or others for storage, use, or other consumption.

12-53

     (4) A person conducting a horse race meeting with respect to horses, which are claimed

12-54

during the meeting.

12-55

     (5) Every person engaged in the business of renting any living quarters in any hotel,

12-56

rooming house, or tourist camp.

12-57

     (6) Every person maintaining a business within or outside of this state who engages in the

12-58

regular or systematic solicitation of sales of tangible personal property, prewritten computer

12-59

software delivered electronically or by load and leave, and/or package tour and scenic and

12-60

sightseeing transportation services, in this state by means of:

12-61

     (i) Advertising in newspapers, magazines, and other periodicals published in this state,

12-62

sold over the counter in this state or sold by subscription to residents of this state, billboards

12-63

located in this state, airborne advertising messages produced or transported in the airspace above

12-64

this state, display cards and posters on common carriers or any other means of public conveyance

12-65

incorporated or operated primarily in this state, brochures, catalogs, circulars, coupons,

12-66

pamphlets, samples, and similar advertising material mailed to, or distributed within this state to

12-67

residents of this state;

13-68

     (ii) Telephone;

13-69

     (iii) Computer assisted shopping networks; and

13-70

     (iv) Television, radio or any other electronic media, which is intended to be broadcast to

13-71

consumers located in this state.

13-72

     (b) When the tax administrator determines that it is necessary for the proper

13-73

administration of chapters 18 and 19 of this title to regard any salespersons, representatives,

13-74

truckers, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, employers,

13-75

or persons under whom they operate or from whom they obtain the tangible personal property

13-76

sold by them, irrespective of whether they are making sales on their own behalf or on behalf of

13-77

the dealers, distributors, supervisors, or employers, the tax administrator may so regard them and

13-78

may regard the dealers, distributors, supervisors, or employers as retailers for purposes of

13-79

chapters 18 and 19 of this title.

13-80

     44-18-15."Retailer" defined [effective October 1, 2012].-- (a) "Retailer" includes:

13-81

     (1) Every person engaged in the business of making sales at retail including prewritten

13-82

computer software delivered electronically or by load and leave, sales of services as defined in

13-83

section 44-18-7.3, and sales at auction of tangible personal property owned by the person or

13-84

others.

13-85

     (2) Every person making sales of tangible personal property including prewritten

13-86

computer software delivered electronically or by load and leave, or sales of services as defined in

13-87

section 44-18-7.3, through an independent contractor or other representative, if the retailer enters

13-88

into an agreement with a resident of this state, under which the resident, for a commission or

13-89

other consideration, directly or indirectly refers potential customers, whether by a link on an

13-90

Internet website or otherwise, to the retailer, provided the cumulative gross receipts from sales by

13-91

the retailer to customers in the state who are referred to the retailer by all residents with this type

13-92

of an agreement with the retailer, is in excess of five thousand dollars ($5,000) during the

13-93

preceding four (4) quarterly periods ending on the last day of March, June, September and

13-94

December. Such retailer shall be presumed to be soliciting business through such independent

13-95

contractor or other representative, which presumption may be rebutted by proof that the resident

13-96

with whom the retailer has an agreement did not engage in any solicitation in the state on behalf

13-97

of the retailer that would satisfy the nexus requirement of the United States Constitution during

13-98

such four (4) quarterly periods.

13-99

     (3) Every person engaged in the business of making sales for storage, use, or other

13-100

consumption of: (1) tangible personal property, (ii) , or the business of making sales at auction of

13-101

tangible personal property owned by the person or others, prewritten computer software delivered

13-102

electronically or by load and leave, and (iv) services as defined in section 44-18-7.3.

14-1

     (4) A person conducting a horse race meeting with respect to horses, which are claimed

14-2

during the meeting.

14-3

     (5) Every person engaged in the business of renting any living quarters in any hotel as

14-4

defined in section 42-63.1-2, rooming house, or tourist camp.

14-5

     (6) Every person maintaining a business within or outside of this state who engages in the

14-6

regular or systematic solicitation of sales of tangible personal property, prewritten computer

14-7

software delivered electronically or by load and leave:

14-8

     (i) Advertising in newspapers, magazines, and other periodicals published in this state,

14-9

sold over the counter in this state or sold by subscription to residents of this state, billboards

14-10

located in this state, airborne advertising messages produced or transported in the airspace above

14-11

this state, display cards and posters on common carriers or any other means of public conveyance

14-12

incorporated or operated primarily in this state, brochures, catalogs, circulars, coupons,

14-13

pamphlets, samples, and similar advertising material mailed to, or distributed within this state to

14-14

residents of this state;

14-15

     (ii) Telephone;

14-16

     (iii) Computer assisted shopping networks; and

14-17

     (iv) Television, radio or any other electronic media, which is intended to be broadcast to

14-18

consumers located in this state.

14-19

     (b) When the tax administrator determines that it is necessary for the proper

14-20

administration of chapters 18 and 19 of this title to regard any salespersons, representatives,

14-21

truckers, peddlers, or canvassers as the agents of the dealers, distributors, supervisors, employers,

14-22

or persons under whom they operate or from whom they obtain the tangible personal property

14-23

sold by them, irrespective of whether they are making sales on their own behalf or on behalf of

14-24

the dealers, distributors, supervisors, or employers, the tax administrator may so regard them and

14-25

may regard the dealers, distributors, supervisors, or employers as retailers for purposes of

14-26

chapters 18 and 19 of this title.

14-27

     44-18-18. Sales tax imposed [effective October 1, 2012]. -- A tax is imposed upon sales

14-28

at retail in this state including charges for rentals of living quarters in hotels as defined in section

14-29

42-63.1-2, rooming houses, or tourist camps, at the rate of six percent (6%) of the gross receipts

14-30

of the retailer from the sales or rental charges; provided, that the tax imposed on charges for the

14-31

rentals applies only to the first period of not exceeding thirty (30) consecutive calendar days of

14-32

each rental; provided, further, that for the period commencing July 1, 1990, the tax rate is seven

14-33

percent (7%). The tax is paid to the tax administrator by the retailer at the time and in the manner

14-34

provided. Excluded from this tax are those living quarters in hotels, rooming houses, or tourist

15-1

camps for which the occupant has a written lease for the living quarters which lease covers a

15-2

rental period of twelve (12) months or more. In recognition of the work being performed by the

15-3

Streamlined Sales and Use Tax Governing Board, upon any federal law which requires remote

15-4

sellers to collect and remit taxes, effective the first (1st) day of the first (1st) state fiscal quarter

15-5

following the change, the rate imposed under § 44-18-18 shall be six and one-half percent (6.5%).

15-6

     44-18-20. Use tax imposed [effective until October 1, 2012]. -- (a) An excise tax is

15-7

imposed on the storage, use, or other consumption in this state of tangible personal property, or

15-8

prewritten computer software delivered electronically or by load and leave, and/or package tour

15-9

and scenic and sightseeing transportation services, including a motor vehicle, a boat, an airplane,

15-10

or a trailer, purchased from any retailer at the rate of six percent (6%) of the sale price of the

15-11

property.

15-12

     (b) An excise tax is imposed on the storage, use, or other consumption in this state of a

15-13

motor vehicle, a boat, an airplane, or a trailer purchased from other than a licensed motor vehicle

15-14

dealer or other than a retailer of boats, airplanes, or trailers respectively, at the rate of six percent

15-15

(6%) of the sale price of the motor vehicle, boat, airplane, or trailer.

15-16

     (c) The word "trailer" as used in this section and in § 44-18-21 means and includes those

15-17

defined in § 31-1-5(a) – (e) and also includes boat trailers, camping trailers, house trailers, and

15-18

mobile homes.

15-19

     (d) Notwithstanding the provisions contained in this section and in § 44-18-21 relating to

15-20

the imposition of a use tax and liability for this tax on certain casual sales, no tax is payable in

15-21

any casual sale:

15-22

     (1) When the transferee or purchaser is the spouse, mother, father, brother, sister, or child

15-23

of the transferor or seller;

15-24

     (2) When the transfer or sale is made in connection with the organization, reorganization,

15-25

dissolution, or partial liquidation of a business entity; provided:

15-26

     (i) The last taxable sale, transfer, or use of the article being transferred or sold was

15-27

subjected to a tax imposed by this chapter;

15-28

     (ii) The transferee is the business entity referred to or is a stockholder, owner, member, or

15-29

partner; and

15-30

     (iii) Any gain or loss to the transferor is not recognized for income tax purposes under the

15-31

provisions of the federal income tax law and treasury regulations and rulings issued thereunder;

15-32

     (3) When the sale or transfer is of a trailer, other than a camping trailer, of the type

15-33

ordinarily used for residential purposes and commonly known as a house trailer or as a mobile

15-34

home; or

16-1

     (4) When the transferee or purchaser is exempt under the provisions of § 44-18-30 or

16-2

other general law of this state or special act of the general assembly of this state.

16-3

     (e) The term "casual" means a sale made by a person other than a retailer; provided, that

16-4

in the case of a sale of a motor vehicle, the term means a sale made by a person other than a

16-5

licensed motor vehicle dealer or an auctioneer at an auction sale. In no case is the tax imposed

16-6

under the provisions of subsections (a) and (b) of this section on the storage, use, or other

16-7

consumption in this state of a used motor vehicle less than the product obtained by multiplying

16-8

the amount of the retail dollar value at the time of purchase of the motor vehicle by the applicable

16-9

tax rate; provided, that where the amount of the sale price exceeds the amount of the retail dollar

16-10

value, the tax is based on the sale price. The tax administrator shall use as his or her guide the

16-11

retail dollar value as shown in the current issue of any nationally recognized used vehicle guide

16-12

for appraisal purposes in this state. On request within thirty (30) days by the taxpayer after

16-13

payment of the tax, if the tax administrator determines that the retail dollar value as stated in this

16-14

subsection is inequitable or unreasonable, he or she shall, after affording the taxpayer reasonable

16-15

opportunity to be heard, re-determine the tax.

16-16

     (f) Every person making more than five (5) retail sales of tangible personal property or

16-17

prewritten computer software delivered electronically or by load and leave, and/or package tour

16-18

and scenic and sightseeing transportation services during any twelve (12) month period, including

16-19

sales made in the capacity of assignee for the benefit of creditors or receiver or trustee in

16-20

bankruptcy, is considered a retailer within the provisions of this chapter.

16-21

     (g) "Casual sale" includes a sale of tangible personal property not held or used by a seller

16-22

in the course of activities for which the seller is required to hold a seller's permit or permits or

16-23

would be required to hold a seller's permit or permits if the activities were conducted in this state;

16-24

provided, that the sale is not one of a series of sales sufficient in number, scope, and character

16-25

(more than five (5) in any twelve (12) month period) to constitute an activity for which the seller

16-26

is required to hold a seller's permit or would be required to hold a seller's permit if the activity

16-27

were conducted in this state.

16-28

     (2) Casual sales also include sales made at bazaars, fairs, picnics, or similar events by

16-29

nonprofit organizations, which are organized for charitable, educational, civic, religious, social,

16-30

recreational, fraternal, or literary purposes during two (2) events not to exceed a total of six (6)

16-31

days duration each calendar year. Each event requires the issuance of a permit by the division of

16-32

taxation. Where sales are made at events by a vendor, which holds a sales tax permit and is not a

16-33

nonprofit organization, the sales are in the regular course of business and are not exempt as casual

16-34

sales.

17-1

     (h) The use tax imposed under this section for the period commencing July 1, 1990 is at

17-2

the rate of seven percent (7%). In recognition of the work being performed by the Streamlined

17-3

Sales and Use Tax Governing Board, upon any federal law which requires remote sellers to

17-4

collect and remit taxes, effective the first (1st) day of the first (1st) state fiscal quarter following

17-5

the change, the rate imposed under § 44-18-18 shall be six and one-half percent (6.5%).

17-6

     44-18-20. Use tax imposed [effective October 1, 2012]. -- (a) An excise tax is imposed

17-7

on the storage, use, or other consumption in this state of tangible personal property, prewritten

17-8

computer software delivered electronically or by load and leave or services as defined section 44-

17-9

18-7.3; including a motor vehicle, a boat, an airplane, or a trailer, purchased from any retailer at

17-10

the rate of six percent (6%) of the sale price of the property.

17-11

     (b) An excise tax is imposed on the storage, use, or other consumption in this state of a

17-12

motor vehicle, a boat, an airplane, or a trailer purchased from other than a licensed motor vehicle

17-13

dealer or other than a retailer of boats, airplanes, or trailers respectively, at the rate of six percent

17-14

(6%) of the sale price of the motor vehicle, boat, airplane, or trailer.

17-15

     (c) The word "trailer" as used in this section and in § 44-18-21 means and includes those

17-16

defined in § 31-1-5(a) – (e) and also includes boat trailers, camping trailers, house trailers, and

17-17

mobile homes.

17-18

     (d) Notwithstanding the provisions contained in this section and in § 44-18-21 relating to

17-19

the imposition of a use tax and liability for this tax on certain casual sales, no tax is payable in

17-20

any casual sale:

17-21

     (1) When the transferee or purchaser is the spouse, mother, father, brother, sister, or child

17-22

of the transferor or seller;

17-23

     (2) When the transfer or sale is made in connection with the organization, reorganization,

17-24

dissolution, or partial liquidation of a business entity; provided:

17-25

     (i) The last taxable sale, transfer, or use of the article being transferred or sold was

17-26

subjected to a tax imposed by this chapter;

17-27

     (ii) The transferee is the business entity referred to or is a stockholder, owner, member, or

17-28

partner; and

17-29

     (iii) Any gain or loss to the transferor is not recognized for income tax purposes under the

17-30

provisions of the federal income tax law and treasury regulations and rulings issued thereunder;

17-31

     (3) When the sale or transfer is of a trailer, other than a camping trailer, of the type

17-32

ordinarily used for residential purposes and commonly known as a house trailer or as a mobile

17-33

home; or

18-34

     (4) When the transferee or purchaser is exempt under the provisions of § 44-18-30 or

18-35

other general law of this state or special act of the general assembly of this state.

18-36

     (e) The term "casual" means a sale made by a person other than a retailer; provided, that

18-37

in the case of a sale of a motor vehicle, the term means a sale made by a person other than a

18-38

licensed motor vehicle dealer or an auctioneer at an auction sale. In no case is the tax imposed

18-39

under the provisions of subsections (a) and (b) of this section on the storage, use, or other

18-40

consumption in this state of a used motor vehicle less than the product obtained by multiplying

18-41

the amount of the retail dollar value at the time of purchase of the motor vehicle by the applicable

18-42

tax rate; provided, that where the amount of the sale price exceeds the amount of the retail dollar

18-43

value, the tax is based on the sale price. The tax administrator shall use as his or her guide the

18-44

retail dollar value as shown in the current issue of any nationally recognized used vehicle guide

18-45

for appraisal purposes in this state. On request within thirty (30) days by the taxpayer after

18-46

payment of the tax, if the tax administrator determines that the retail dollar value as stated in this

18-47

subsection is inequitable or unreasonable, he or she shall, after affording the taxpayer reasonable

18-48

opportunity to be heard, re-determine the tax.

18-49

     (f) Every person making more than five (5) retail sales of tangible personal property or

18-50

prewritten computer software delivered electronically or by load and leave, or services as defined

18-51

in section 44-18-7.3 during any twelve (12) month period, including sales made in the capacity of

18-52

assignee for the benefit of creditors or receiver or trustee in bankruptcy, is considered a retailer

18-53

within the provisions of this chapter.

18-54

     (g) "Casual sale" includes a sale of tangible personal property not held or used by a seller

18-55

in the course of activities for which the seller is required to hold a seller's permit or permits or

18-56

would be required to hold a seller's permit or permits if the activities were conducted in this state;

18-57

provided, that the sale is not one of a series of sales sufficient in number, scope, and character

18-58

(more than five (5) in any twelve (12) month period) to constitute an activity for which the seller

18-59

is required to hold a seller's permit or would be required to hold a seller's permit if the activity

18-60

were conducted in this state.

18-61

     (2) Casual sales also include sales made at bazaars, fairs, picnics, or similar events by

18-62

nonprofit organizations, which are organized for charitable, educational, civic, religious, social,

18-63

recreational, fraternal, or literary purposes during two (2) events not to exceed a total of six (6)

18-64

days duration each calendar year. Each event requires the issuance of a permit by the division of

18-65

taxation. Where sales are made at events by a vendor, which holds a sales tax permit and is not a

18-66

nonprofit organization, the sales are in the regular course of business and are not exempt as casual

18-67

sales.

19-68

     (h) The use tax imposed under this section for the period commencing July 1, 1990 is at

19-69

the rate of seven percent (7%). In recognition of the work being performed by the Streamlined

19-70

Sales and Use Tax Governing Board, upon any federal law which requires remote sellers to

19-71

collect and remit taxes, effective the first (1st) day of the first (1st) state fiscal quarter following

19-72

the change, the rate imposed under § 44-18-18 shall be six and one-half percent (6.5%).

19-73

     44-18-21. Liability for use tax [effective until October 1, 2012]. -- (a) Every person

19-74

storing, using, or consuming in this state tangible personal property, including a motor vehicle,

19-75

boat, airplane, or trailer, purchased from a retailer, and a motor vehicle, boat, airplane, or trailer,

19-76

purchased from other than a licensed motor vehicle dealer or other than a retailer of boats,

19-77

airplanes, or trailers respectively; or storing, using or consuming specified prewritten computer

19-78

software delivered electronically or by load and leave, and/or package tour and scenic and

19-79

sightseeing transportation services is liable for the use tax. The person's liability is not

19-80

extinguished until the tax has been paid to this state, except that a receipt from a retailer engaging

19-81

in business in this state or from a retailer who is authorized by the tax administrator to collect the

19-82

tax under rules and regulations that he or she may prescribe, given to the purchaser pursuant to

19-83

the provisions of § 44-18-22, is sufficient to relieve the purchaser from further liability for the tax

19-84

to which the receipt refers.

19-85

     (b) Each person before obtaining an original or transferral registration for any article or

19-86

commodity in this state, which article or commodity is required to be licensed or registered in the

19-87

state, shall furnish satisfactory evidence to the tax administrator that any tax due under this

19-88

chapter with reference to the article or commodity has been paid, and for the purpose of effecting

19-89

compliance, the tax administrator, in addition to any other powers granted to him or her, may

19-90

invoke the provisions of § 31-3-4 in the case of a motor vehicle. The tax administrator, when he

19-91

or she deems it to be for the convenience of the general public, may authorize any agency of the

19-92

state concerned with the licensing or registering of these articles or commodities to collect the use

19-93

tax on any articles or commodities which the purchaser is required by this chapter to pay before

19-94

receiving an original or transferral registration. The general assembly shall annually appropriate a

19-95

sum that it deems necessary to carry out the purposes of this section. Notwithstanding the

19-96

provisions of §§ 44-18-19, 44-18-22, and 44-18-24, the sales or use tax on any motor vehicle

19-97

and/or recreational vehicle requiring registration by the administrator of the division of motor

19-98

vehicles shall not be added by the retailer to the sale price or charge but shall be paid directly by

19-99

the purchaser to the tax administrator, or his or her authorized deputy or agent as provided in this

19-100

section.

19-101

     (c) In cases involving total loss or destruction of a motor vehicle occurring within one

19-102

hundred twenty (120) days from the date of purchase and upon which the purchaser has paid the

20-1

use tax, the amount of the tax constitutes an overpayment. The amount of the overpayment may

20-2

be credited against the amount of use tax on any subsequent vehicle which the owner acquires to

20-3

replace the lost or destroyed vehicle or may be refunded, in whole or in part.

20-4

     44-18-21. Liability for use tax [effective October 1, 2012]. -- (a) Every person storing,

20-5

using, or consuming in this state tangible personal property, including a motor vehicle, boat,

20-6

airplane, or trailer, purchased from a retailer, and a motor vehicle, boat, airplane, or trailer,

20-7

purchased from other than a licensed motor vehicle dealer or other than a retailer of boats,

20-8

airplanes, or trailers respectively; or storing, using or consuming specified prewritten computer

20-9

software delivered electronically or by load and leave, or services as defined in section 44-18-7.3

20-10

is liable for the use tax. The person's liability is not extinguished until the tax has been paid to

20-11

this state, except that a receipt from a retailer engaging in business in this state or from a retailer

20-12

who is authorized by the tax administrator to collect the tax under rules and regulations that he or

20-13

she may prescribe, given to the purchaser pursuant to the provisions of § 44-18-22, is sufficient to

20-14

relieve the purchaser from further liability for the tax to which the receipt refers.

20-15

     (b) Each person before obtaining an original or transferral registration for any article or

20-16

commodity in this state, which article or commodity is required to be licensed or registered in the

20-17

state, shall furnish satisfactory evidence to the tax administrator that any tax due under this

20-18

chapter with reference to the article or commodity has been paid, and for the purpose of effecting

20-19

compliance, the tax administrator, in addition to any other powers granted to him or her, may

20-20

invoke the provisions of § 31-3-4 in the case of a motor vehicle. The tax administrator, when he

20-21

or she deems it to be for the convenience of the general public, may authorize any agency of the

20-22

state concerned with the licensing or registering of these articles or commodities to collect the use

20-23

tax on any articles or commodities which the purchaser is required by this chapter to pay before

20-24

receiving an original or transferral registration. The general assembly shall annually appropriate a

20-25

sum that it deems necessary to carry out the purposes of this section. Notwithstanding the

20-26

provisions of §§ 44-18-19, 44-18-22, and 44-18-24, the sales or use tax on any motor vehicle

20-27

and/or recreational vehicle requiring registration by the administrator of the division of motor

20-28

vehicles shall not be added by the retailer to the sale price or charge but shall be paid directly by

20-29

the purchaser to the tax administrator, or his or her authorized deputy or agent as provided in this

20-30

section.

20-31

     (c) In cases involving total loss or destruction of a motor vehicle occurring within one

20-32

hundred twenty (120) days from the date of purchase and upon which the purchaser has paid the

20-33

use tax, the amount of the tax constitutes an overpayment. The amount of the overpayment may

20-34

be credited against the amount of use tax on any subsequent vehicle which the owner acquires to

21-1

replace the lost or destroyed vehicle or may be refunded, in whole or in part.

21-2

     44-18-22. Collection of use tax by retailer [effective until October 1, 2012]. -- Every

21-3

retailer engaging in business in this state and making sales of tangible personal property or

21-4

prewritten computer software delivered electronically or by load and leave for storage, use, or

21-5

other consumption in this state, and/or providing package tour and scenic and sightseeing

21-6

transportation services, not exempted under this chapter shall, at the time of making the sales, or

21-7

if the storage, use, or other consumption of the tangible personal property, prewritten computer

21-8

software delivered electronically or by load and leave, and/or providing package tour and scenic

21-9

and sightseeing transportation services, , is not then taxable under this chapter, at the time the

21-10

storage, use, or other consumption becomes taxable, collect the tax from the purchaser and give to

21-11

the purchaser a receipt in the manner and form prescribed by the tax administrator.

21-12

     44-18-22. Collection of use tax by retailer [effective October 1, 2012]. -- Every retailer

21-13

engaging in business in this state and making sales of tangible personal property or prewritten

21-14

computer software delivered electronically or by load and leave, or services as defined in section

21-15

44-18-7.3, for storage, use, or other consumption in this state, not exempted under this chapter

21-16

shall, at the time of making the sales, or if the storage, use, or other consumption of the tangible

21-17

personal property, prewritten computer software delivered electronically or by load and leave, or

21-18

services as defined in section 44-18-7.3, is not then taxable under this chapter, at the time the

21-19

storage, use, or other consumption becomes taxable, collect the tax from the purchaser and give to

21-20

the purchaser a receipt in the manner and form prescribed by the tax administrator.

21-21

     44-18-23. "Engaging in business" defined [effective until October 1, 2012]. -- As used

21-22

in §§ 44-18-21 and 44-18-22 the term "engaging in business in this state" means the selling or

21-23

delivering in this state, or any activity in this state related to the selling or delivering in this state

21-24

of tangible personal property, or prewritten computer software delivered electronically or by load

21-25

and leave for storage, use, or other consumption in this state , as well as providing package tour

21-26

and scenic and sightseeing transportation services,. This term includes, but is not limited to, the

21-27

following acts or methods of transacting business:

21-28

     (1) Maintaining, occupying, or using in this state permanently or temporarily, directly or

21-29

indirectly or through a subsidiary, representative, or agent by whatever name called and whether

21-30

or not qualified to do business in this state, any office, place of distribution, sales or sample room

21-31

or place, warehouse or storage place, or other place of business;

21-32

     (2) Having any subsidiary, representative, agent, salesperson, canvasser, or solicitor

21-33

permanently or temporarily, and whether or not the subsidiary, representative, or agent is

21-34

qualified to do business in this state, operate in this state for the purpose of selling, delivering, or

22-1

the taking of orders for any tangible personal property, or prewritten computer software delivered

22-2

electronically or by load and leave and/or package tour and scenic and sightseeing transportation

22-3

services;

22-4

     (3) The regular or systematic solicitation of sales of tangible personal property, or

22-5

prewritten computer software delivered electronically or by load and leave, and/or package tour

22-6

and scenic and sightseeing transportation services, in this state by means of:

22-7

     (i) Advertising in newspapers, magazines, and other periodicals published in this state,

22-8

sold over the counter in this state or sold by subscription to residents of this state, billboards

22-9

located in this state, airborne advertising messages produced or transported in the air space above

22-10

this state, display cards and posters on common carriers or any other means of public conveyance

22-11

incorporated or operating primarily in this state, brochures, catalogs, circulars, coupons,

22-12

pamphlets, samples, and similar advertising material mailed to, or distributed within this state to

22-13

residents of this state;

22-14

     (ii) Telephone;

22-15

     (iii) Computer-assisted shopping networks; and

22-16

     (iv) Television, radio or any other electronic media, which is intended to be broadcast to

22-17

consumers located in this state.

22-18

     44-18-23. "Engaging in business" defined [effective October 1, 2012]. -- As used in §§

22-19

44-18-21 and 44-18-22 the term "engaging in business in this state" means the selling or

22-20

delivering in this state, or any activity in this state related to the selling or delivering in this state

22-21

of tangible personal property, or prewritten computer software delivered electronically or by load

22-22

and leave for storage, use, or other consumption in this state; or services as defined in section 44-

22-23

18-7.3 in this state. This term includes, but is not limited to, the following acts or methods of

22-24

transacting business:

22-25

     (1) Maintaining, occupying, or using in this state permanently or temporarily, directly or

22-26

indirectly or through a subsidiary, representative, or agent by whatever name called and whether

22-27

or not qualified to do business in this state, any office, place of distribution, sales or sample room

22-28

or place, warehouse or storage place, or other place of business;

22-29

     (2) Having any subsidiary, representative, agent, salesperson, canvasser, or solicitor

22-30

permanently or temporarily, and whether or not the subsidiary, representative, or agent is

22-31

qualified to do business in this state, operate in this state for the purpose of selling, delivering, or

22-32

the taking of orders for any tangible personal property, or prewritten computer software delivered

22-33

electronically or by load and leave, or services as defined in section 44-18-7.3;

23-34

     (3) The regular or systematic solicitation of sales of tangible personal property, or

23-35

prewritten computer software delivered electronically or by load and leave, or services as defined

23-36

in section 44-18-7.3, in this state by means of:

23-37

     (i) Advertising in newspapers, magazines, and other periodicals published in this state,

23-38

sold over the counter in this state or sold by subscription to residents of this state, billboards

23-39

located in this state, airborne advertising messages produced or transported in the air space above

23-40

this state, display cards and posters on common carriers or any other means of public conveyance

23-41

incorporated or operating primarily in this state, brochures, catalogs, circulars, coupons,

23-42

pamphlets, samples, and similar advertising material mailed to, or distributed within this state to

23-43

residents of this state;

23-44

     (ii) Telephone;

23-45

     (iii) Computer-assisted shopping networks; and

23-46

     (iv) Television, radio or any other electronic media, which is intended to be broadcast to

23-47

consumers located in this state.

23-48

     44-18-25. Presumption that sale is for storage, use, or consumption – Resale

23-49

certificate [effective until October 1, 2012]. -- It is presumed that all gross receipts are subject

23-50

to the sales tax, and that the use of all tangible personal property, or prewritten computer software

23-51

delivered electronically or by load and leave, and/or package tour and scenic and sightseeing

23-52

transportation services are subject to the use tax, and that all tangible personal property, or

23-53

prewritten computer software delivered electronically or by load and leave, and/or package tour

23-54

and scenic and sightseeing transportation services sold or in processing or intended for delivery or

23-55

delivered in this state is sold or delivered for storage, use, or other consumption in this state, until

23-56

the contrary is established to the satisfaction of the tax administrator. The burden of proving the

23-57

contrary is upon the person who makes the sale and the purchaser, unless the person who makes

23-58

the sale takes from the purchaser a certificate to the effect that the purchase was for resale. The

23-59

certificate shall contain any information and be in the form that the tax administrator may require.

23-60

     44-18-25. Presumption that sale is for storage, use, or consumption – Resale

23-61

certificate [effective October 1, 2012]. -- It is presumed that all gross receipts are subject to the

23-62

sales tax, and that the use of all tangible personal property, or prewritten computer software

23-63

delivered electronically or by load and leave, or services as defined in section 44-18-7.3, are

23-64

subject to the use tax, and that all tangible personal property, or prewritten computer software

23-65

delivered electronically or by load and leave, or services as defined in section 44-18-7.3, sold or

23-66

in processing or intended for delivery or delivered in this state is sold or delivered for storage,

23-67

use, or other consumption in this state, until the contrary is established to the satisfaction of the

23-68

tax administrator. The burden of proving the contrary is upon the person who makes the sale and

24-1

the purchaser, unless the person who makes the sale takes from the purchaser a certificate to the

24-2

effect that the purchase was for resale. The certificate shall contain any information and be in the

24-3

form that the tax administrator may require.

24-4

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

24-5

the taxes imposed by this chapter the following gross receipts:

24-6

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

24-7

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

24-8

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

24-9

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

24-10

     (2) Newspapers.

24-11

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

24-12

newspaper.

24-13

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

24-14

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

24-15

interest.

24-16

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

24-17

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

24-18

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

24-19

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

24-20

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

24-21

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

24-22

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

24-23

     (4) Containers.

24-24

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

24-25

     (A) Non-returnable containers, including boxes, paper bags, and wrapping materials

24-26

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

24-27

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

24-28

the contents with the container.

24-29

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

24-30

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

24-31

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

24-32

the contents or when resold for refilling.

24-33

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

24-34

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

25-1

returnable containers."

25-2

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

25-3

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

25-4

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

25-5

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

25-6

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

25-7

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

25-8

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

25-9

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

25-10

organizations: Distributive Education Clubs of America, (DECA); Future Business Leaders of

25-11

America, phi beta lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers

25-12

of America/Home Economics Related Occupations (FHA/HERD); and Vocational Industrial

25-13

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

25-14

women, and parent teacher associations.

25-15

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

25-16

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

25-17

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

25-18

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

25-19

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

25-20

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

25-21

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

25-22

under the contracts without payment of the tax.

25-23

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

25-24

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

25-25

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

25-26

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

25-27

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

25-28

pay the tax on the property used.

25-29

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

25-30

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

25-31

propulsion of airplanes.

25-32

     (7) Purchase for manufacturing purposes.

25-33

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

25-34

software, tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration,

26-1

and water, when the property or service is purchased for the purpose of being manufactured into a

26-2

finished product for resale, and becomes an ingredient, component, or integral part of the

26-3

manufactured, compounded, processed, assembled, or prepared product, or if the property or

26-4

service is consumed in the process of manufacturing for resale computer software, tangible

26-5

personal property, electricity, natural gas, artificial gas, steam, refrigeration, or water.

26-6

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

26-7

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

26-8

     (iii) "Consumed" includes mere obsolescence.

26-9

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

26-10

assembling, preparing, or producing.

26-11

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

26-12

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

26-13

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

26-14

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

26-15

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

26-16

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

26-17

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

26-18

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

26-19

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

26-20

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

26-21

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

26-22

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

26-23

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

26-24

subdivision of the municipality where it is located.

26-25

     (9) Food and food ingredients. From the sale and storage, use, or other consumption in

26-26

this state of food and food ingredients as defined in § 44-18-7.1(l).

26-27

     For the purposes of this exemption "food and food ingredients" shall not include candy,

26-28

soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending

26-29

machines or prepared food (as those terms are defined in § 44-18-7.1, unless the prepared food is:

26-30

     (i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311,

26-31

except sub-sector 3118 (bakeries);

26-32

     (ii) Sold in an unheated state by weight or volume as a single item;

26-33

     (iii) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries,

26-34

donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and is not sold with

27-1

utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or

27-2

straws.

27-3

     (10) Medicines, drugs and durable medical equipment. From the sale and from the

27-4

storage, use, or other consumption in this state, of;

27-5

     (i) "Drugs" as defined in § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and

27-6

insulin whether or not sold on prescription. For purposes of this exemption, drugs shall not

27-7

include over the counter drugs, and grooming and hygiene products as defined in § 44-18-

27-8

7.1(h)(iii).

27-9

     (ii) Durable medical equipment as defined in section 44-18-7.1(k) for home use only,

27-10

including, but not limited to, syringe infusers, ambulatory drug delivery pumps, hospital beds,

27-11

convalescent chairs, and chair lifts. Supplies used in connection with syringe infusers and

27-12

ambulatory drug delivery pumps which are sold on prescription to individuals to be used by them

27-13

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

27-14

dispense or administer prescription drugs shall also be exempt from tax.

27-15

     (11) Prosthetic devices and mobility enhancing equipment. From the sale and from the

27-16

storage, use, or other consumption in this state, of prosthetic devices as defined in § 44-18-7.1(t),

27-17

sold on prescription, including but not limited to, artificial limbs, dentures, spectacles and

27-18

eyeglasses, and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on

27-19

prescription and mobility enhancing equipment as defined in § 44-18-7.1(p) including

27-20

wheelchairs, crutches and canes.

27-21

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

27-22

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

27-23

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

27-24

     (13) Motor vehicles sold to nonresidents.

27-25

      (i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide

27-26

nonresident of this state who does not register the motor vehicle in this state, whether the sale or

27-27

delivery of the motor vehicle is made in this state or at the place of residence of the nonresident.

27-28

A motor vehicle sold to a bona fide nonresident whose state of residence does not allow a like

27-29

exemption to its nonresidents is not exempt from the tax imposed under § 44-18-20. In that event

27-30

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

27-31

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

27-32

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

27-33

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

27-34

administrator under the provisions of chapters 18 and 19 of this title. When a Rhode Island

28-1

licensed motor vehicle dealer is required to add and collect the sales and use tax on the sale of a

28-2

motor vehicle to a bona fide nonresident as provided in this section, the dealer in computing the

28-3

tax takes into consideration the law of the state of the nonresident as it relates to the trade-in of

28-4

motor vehicles.

28-5

     (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may

28-6

require any licensed motor vehicle dealer to keep records of sales to bona fide nonresidents as the

28-7

tax administrator deems reasonably necessary to substantiate the exemption provided in this

28-8

subdivision, including the affidavit of a licensed motor vehicle dealer that the purchaser of the

28-9

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

28-10

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

28-11

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

28-12

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

28-13

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

28-14

provisions of § 44-18-20.

28-15

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

28-16

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

28-17

licensed under § 40-9-11.1.

28-18

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

28-19

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

28-20

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

28-21

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

28-22

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

28-23

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

28-24

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

28-25

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

28-26

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

28-27

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

28-28

device, building, machinery, or equipment.

28-29

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

28-30

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

28-31

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

28-32

operated summer camps for children.

28-33

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

28-34

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

29-1

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

29-2

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

29-3

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

29-4

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

29-5

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

29-6

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

29-7

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

29-8

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

29-9

inures to the benefit of any individual.

29-10

     (19) Motor vehicle and adaptive equipment for persons with disabilities.

29-11

     (i) From the sale of: (A) special adaptations, (B) the component parts of the special

29-12

adaptations, or (C) a specially adapted motor vehicle; provided, that the owner furnishes to the

29-13

tax administrator an affidavit of a licensed physician to the effect that the specially adapted motor

29-14

vehicle is necessary to transport a family member with a disability or where the vehicle has been

29-15

specially adapted to meet the specific needs of the person with a disability. This exemption

29-16

applies to not more than one motor vehicle owned and registered for personal, noncommercial

29-17

use.

29-18

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

29-19

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

29-20

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

29-21

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

29-22

devices to auditory signals.

29-23

     (iii) From the sale of: (a) special adaptations, (b) the component parts of the special

29-24

adaptations, for a "wheelchair accessible taxicab" as defined in § 39-14-1 and/or a "wheelchair

29-25

accessible public motor vehicle" as defined in § 39-14.1-1.

29-26

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

29-27

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

29-28

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

29-29

special adaptations, including installation.

29-30

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

29-31

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

29-32

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

29-33

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

30-34

     (22) Manufacturing machinery and equipment.

30-35

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

30-36

dies, and molds, and machinery and equipment (including replacement parts), and related items to

30-37

the extent used in an industrial plant in connection with the actual manufacture, conversion, or

30-38

processing of tangible personal property, or to the extent used in connection with the actual

30-39

manufacture, conversion or processing of computer software as that term is utilized in industry

30-40

numbers 7371, 7372, and 7373 in the standard industrial classification manual prepared by the

30-41

technical committee on industrial classification, office of statistical standards, executive office of

30-42

the president, United States bureau of the budget, as revised from time to time, to be sold, or that

30-43

machinery and equipment used in the furnishing of power to an industrial manufacturing plant.

30-44

For the purposes of this subdivision, "industrial plant" means a factory at a fixed location

30-45

primarily engaged in the manufacture, conversion, or processing of tangible personal property to

30-46

be sold in the regular course of business;

30-47

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

30-48

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

30-49

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

30-50

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

30-51

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

30-52

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

30-53

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

30-54

operations;

30-55

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

30-56

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

30-57

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

30-58

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

30-59

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

30-60

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

30-61

production flow or manufacturing process;

30-62

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

30-63

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

30-64

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

30-65

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

30-66

otherwise identifiable as to use.

30-67

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

30-68

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

31-1

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

31-2

the proceeds applicable only to the automobile as are received from the manufacturer of

31-3

automobiles for the repurchase of the automobile whether the repurchase was voluntary or not

31-4

towards the purchase of a new or used automobile by the buyer. For the purpose of this

31-5

subdivision, the word "automobile" means a private passenger automobile not used for hire and

31-6

does not refer to any other type of motor vehicle.

31-7

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

31-8

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

31-9

securities or commodities.

31-10

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

31-11

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

31-12

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

31-13

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

31-14

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

31-15

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

31-16

uses.

31-17

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

31-18

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

31-19

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

31-20

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

31-21

of the vessels.

31-22

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

31-23

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

31-24

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

31-25

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

31-26

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

31-27

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

31-28

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

31-29

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

31-30

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

31-31

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

31-32

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

31-33

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

31-34

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

32-1

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

32-2

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

32-3

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

32-4

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

32-5

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

32-6

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

32-7

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

32-8

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

32-9

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

32-10

thereto.

32-11

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

32-12

intended to be worn or carried on or about the human body for sales prior to October 1, 2012.

32-13

Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including

32-14

footwear, intended to be worn or carried on or about the human body up to two hundred and fifty

32-15

dollars ($250) of the sales price per item. For the purposes of this section, "clothing or footwear"

32-16

does not include clothing accessories or equipment or special clothing or footwear primarily

32-17

designed for athletic activity or protective use as these terms are defined in § 44-18-7.1(f). In

32-18

recognition of the work being performed by the Streamlined Sales and Use Tax Governing Board,

32-19

upon any federal law which requires remote sellers to collect and remit taxes, effective the first

32-20

(1st) day of the first (1st) state fiscal quarter following the change, this exemption will apply as it

32-21

did prior to October 1, 2012.

32-22

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

32-23

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

32-24

premises.

32-25

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

32-26

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

32-27

any canonized scriptures of any tax-exempt nonprofit religious organization including, but not

32-28

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

32-29

     (30) Boats.

32-30

     (i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not

32-31

register the boat or vessel in this state, or document the boat or vessel with the United States

32-32

government at a home port within the state, whether the sale or delivery of the boat or vessel is

32-33

made in this state or elsewhere; provided, that the nonresident transports the boat within thirty

32-34

(30) days after delivery by the seller outside the state for use thereafter solely outside the state.

33-1

     (ii) The tax administrator, in addition to the provisions of §§ 44-19-17 and 44-19-28, may

33-2

require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents as the

33-3

tax administrator deems reasonably necessary to substantiate the exemption provided in this

33-4

subdivision, including the affidavit of the seller that the buyer represented himself or herself to be

33-5

a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this state.

33-6

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

33-7

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

33-8

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

33-9

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

33-10

the schools or of organized activities of the enrolled students.

33-11

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

33-12

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

33-13

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

33-14

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

33-15

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

33-16

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

33-17

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

33-18

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

33-19

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

33-20

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

33-21

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

33-22

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

33-23

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

33-24

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

33-25

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

33-26

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

33-27

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

33-28

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

33-29

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

33-30

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

33-31

exemptions, proof of the requisite amount of annual gross sales from commercial farming shall be

33-32

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

33-33

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

33-34

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

34-1

exemption issued or renewed after July 1, 2002, shall clearly indicate the level of the exemption

34-2

and be valid for four (4) years after the date of issue. This exemption applies even if the same

34-3

equipment is used for ancillary uses, or is temporarily used for a non-farming or a non-

34-4

agricultural purpose, but shall not apply to motor vehicles acquired after July 1, 2002, unless the

34-5

vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for registration displaying

34-6

farm plates as provided for in § 31-3-31.

34-7

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

34-8

the state of compressed air.

34-9

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

34-10

United States, Rhode Island or POW-MIA flags.

34-11

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

34-12

vehicle and adaptive equipment to and for the use of a veteran with a service-connected loss of or

34-13

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

34-14

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

34-15

use by the qualifying veteran. Certificate of exemption or refunds of taxes paid is granted under

34-16

rules or regulations that the tax administrator may prescribe.

34-17

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

34-18

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

34-19

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

34-20

any purveyor.

34-21

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

34-22

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

34-23

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

34-24

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

34-25

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

34-26

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

34-27

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

34-28

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

34-29

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

34-30

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

34-31

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

34-32

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

34-33

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

34-34

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

35-1

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

35-2

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

35-3

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

35-4

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

35-5

(iii) are mailed to customers at no charge.

35-6

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

35-7

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

35-8

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

35-9

Act of 1977, 7 U.S.C. § 2011 et seq.

35-10

     (40) Transportation charges. From the sale or hiring of motor carriers as defined in § 39-

35-11

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

35-12

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

35-13

number of hours spent on the job.

35-14

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

35-15

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

35-16

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

35-17

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

35-18

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

35-19

     (42) Equipment used for research and development. From the sale and from the storage,

35-20

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

35-21

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

35-22

which the use of research and development equipment is an integral part of its operation, and

35-23

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

35-24

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

35-25

numismatic or investment value.

35-26

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

35-27

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

35-28

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

35-29

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

35-30

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

35-31

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

35-32

farming.

35-33

     (45) Telecommunications carrier access service. Carrier access service or

35-34

telecommunications service when purchased by a telecommunications company from another

36-1

telecommunications company to facilitate the provision of telecommunications service.

36-2

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

36-3

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

36-4

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

36-5

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

36-6

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

36-7

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

36-8

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

36-9

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

36-10

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

36-11

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

36-12

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

36-13

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

36-14

and is not returned to the jewelry manufacturer or seller.

36-15

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

36-16

imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage,

36-17

use, or other consumption in this state of any new or used boat. The exemption provided for in

36-18

this subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal

36-19

ten percent (10%) surcharge on luxury boats is repealed.

36-20

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

36-21

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

36-22

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

36-23

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

36-24

subdivision; provided, that an eligible company employs on average during the calendar year no

36-25

less than five hundred (500) "full-time equivalent employees", as that term is defined in § 42-

36-26

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

36-27

company" as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq., or a

36-28

corporation to the extent the service is provided, directly or indirectly, to or on behalf of a

36-29

regulated investment company, an employee benefit plan, a retirement plan or a pension plan or a

36-30

state chartered bank.

36-31

     (50) Mobile and manufactured homes generally. From the sale and from the storage, use,

36-32

or other consumption in this state of mobile and/or manufactured homes as defined and subject to

36-33

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

37-34

     (51) Manufacturing business reconstruction materials.

37-35

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

37-36

hardware, and other building materials used in the reconstruction of a manufacturing business

37-37

facility which suffers a disaster, as defined in this subdivision, in this state. "Disaster" means any

37-38

occurrence, natural or otherwise, which results in the destruction of sixty percent (60%) or more

37-39

of an operating manufacturing business facility within this state. "Disaster" does not include any

37-40

damage resulting from the willful act of the owner of the manufacturing business facility.

37-41

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

37-42

the production and administrative facilities.

37-43

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

37-44

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

37-45

     (iv) To the extent that the costs of the reconstruction materials are reimbursed by

37-46

insurance, this exemption does not apply.

37-47

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

37-48

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

37-49

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

37-50

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

37-51

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

37-52

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

37-53

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

37-54

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

37-55

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

37-56

food, insecticide and fertilizers.

37-57

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

37-58

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

37-59

of horses.

37-60

     (54) Non-motorized recreational vehicles sold to nonresidents.

37-61

     (i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to

37-62

a bona fide nonresident of this state who does not register the non-motorized recreational vehicle

37-63

in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this

37-64

state or at the place of residence of the nonresident; provided, that a non-motorized recreational

37-65

vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption

37-66

to its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in

37-67

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

37-68

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

38-1

been imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed non-

38-2

motorized recreational vehicle dealer shall add and collect the tax required under this subdivision

38-3

and remit the tax to the tax administrator under the provisions of chapters 18 and 19 of this title.

38-4

Provided, that when a Rhode Island licensed non-motorized recreational vehicle dealer is required

38-5

to add and collect the sales and use tax on the sale of a non-motorized recreational vehicle to a

38-6

bona fide nonresident as provided in this section, the dealer in computing the tax takes into

38-7

consideration the law of the state of the nonresident as it relates to the trade-in of motor vehicles.

38-8

     (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may

38-9

require any licensed non-motorized recreational vehicle dealer to keep records of sales to bona

38-10

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

38-11

exemption provided in this subdivision, including the affidavit of a licensed non-motorized

38-12

recreational vehicle dealer that the purchaser of the non-motorized recreational vehicle was the

38-13

holder of, and had in his or her possession a valid out-of-state non-motorized recreational vehicle

38-14

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

38-15

     (iii) Any nonresident who registers a non-motorized recreational vehicle in this state

38-16

within ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-

38-17

motorized recreational vehicle for use, storage, or other consumption in this state, and is subject

38-18

to, and liable for the use tax imposed under the provisions of § 44-18-20.

38-19

     (iv) "Non-motorized recreational vehicle" means any portable dwelling designed and

38-20

constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use

38-21

which is eligible to be registered for highway use, including, but not limited to, "pick-up coaches"

38-22

or "pick-up campers," "travel trailers," and "tent trailers" as those terms are defined in chapter 1

38-23

of title 31.

38-24

     (55) Sprinkler and fire alarm systems in existing buildings. From the sale in this state of

38-25

sprinkler and fire alarm systems, emergency lighting and alarm systems, and from the sale of the

38-26

materials necessary and attendant to the installation of those systems, that are required in

38-27

buildings and occupancies existing therein in July 2003, in order to comply with any additional

38-28

requirements for such buildings arising directly from the enactment of the Comprehensive Fire

38-29

Safety Act of 2003, and that are not required by any other provision of law or ordinance or

38-30

regulation adopted pursuant to that Act. The exemption provided in this subdivision shall expire

38-31

on December 31, 2008.

38-32

     (56) Aircraft. Notwithstanding the provisions of this chapter, the tax imposed by §§ 44-

38-33

18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or other

38-34

consumption in this state of any new or used aircraft or aircraft parts.

39-1

     (57) Renewable energy products. Notwithstanding any other provisions of Rhode Island

39-2

general laws the following products shall also be exempt from sales tax: solar photovoltaic

39-3

modules or panels, or any module or panel that generates electricity from light; solar thermal

39-4

collectors, including, but not limited to, those manufactured with flat glass plates, extruded

39-5

plastic, sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-

39-6

water and water-to-air type pumps; wind turbines; towers used to mount wind turbines if

39-7

specified by or sold by a wind turbine manufacturer; DC to AC inverters that interconnect with

39-8

utility power lines; manufactured mounting racks and ballast pans for solar collector, module or

39-9

panel installation. Not to include materials that could be fabricated into such racks; monitoring

39-10

and control equipment, if specified or supplied by a manufacturer of solar thermal, solar

39-11

photovoltaic, geothermal, or wind energy systems or if required by law or regulation for such

39-12

systems but not to include pumps, fans or plumbing or electrical fixtures unless shipped from the

39-13

manufacturer affixed to, or an integral part of, another item specified on this list; and solar storage

39-14

tanks that are part of a solar domestic hot water system or a solar space heating system. If the tank

39-15

comes with an external heat exchanger it shall also be tax exempt, but a standard hot water tank is

39-16

not exempt from state sales tax.

39-17

     (58) Returned property. The amount charged for property returned by customers upon

39-18

rescission of the contract of sale when the entire amount exclusive of handling charges paid for

39-19

the property is refunded in either cash or credit, and where the property is returned within one

39-20

hundred twenty (120) days from the date of delivery.

39-21

     (59) Dietary Supplements. From the sale and from the storage, use or other consumption

39-22

of dietary supplements as defined in § 44-18-7.1(l)(v), sold on prescriptions.

39-23

     (60) Blood. From the sale and from the storage, use or other consumption of human

39-24

blood.

39-25

     (61) Agricultural products for human consumption. From the sale and from the storage,

39-26

use or other consumption of livestock and poultry of the kinds of products of which ordinarily

39-27

constitute food for human consumption and of livestock of the kind the products of which

39-28

ordinarily constitute fibers for human use.

39-29

     (62) Diesel emission control technology. From the sale and use of diesel retrofit

39-30

technology that is required by § 31-47.3-4 of the general laws.

39-31

     SECTION 4. Chapter 44-18 of the General Laws entitled “Sales and Use Taxes –

39-32

Liability and Computation” is hereby amended by adding thereto the following section:

39-33

     44-18-7.3. Services defined.-- (a) “Services” means all activities engaged in for other

39-34

persons for a fee, retainer, commission, or other monetary charge, which activities involve the

40-1

performance of a service in this state as distinguished from selling property.

40-2

     (b) The following businesses and services performed in this state, along with the

40-3

applicable 2007 North American Industrial Classification System (NAICS) codes, are included in

40-4

the definition of services:

40-5

     (1) Taxicab and limousine services including but not limited to:

40-6

     (i) Taxicab services including taxi dispatchers (485310); and

40-7

     (ii) Limousine services (485320).

40-8

     (2) Other road transportation service including but not limited to:

40-9

     (i) Charter bus service (485510); and

40-10

     (ii) All other transit and ground passenger transportation (485999).

40-11

     (3) Pet care services (812910) except veterinary and testing laboratories services.

40-12

      (c) The tax administrator is authorized to promulgate rules and regulations in accordance

40-13

with the provisions of chapter 42-35 to carry out the provisions, policies, and purposes of this

40-14

chapter.

40-15

     SECTION 5. Section 44-19-7 of the General Laws in Chapter 44-19 entitled “Sales and

40-16

Use Taxes – Enforcement and Collection” is hereby amended to read as follows:

40-17

     44-19-7. Registration of retailers [effective until October 1, 2012]. -- Every retailer

40-18

selling tangible personal property, or prewritten computer software delivered electronically or by

40-19

load and leave for storage, use, or other consumption in this state, and/or package tour and scenic

40-20

and sightseeing transportation services or renting living quarters in any hotel, rooming house, or

40-21

tourist camp in this state must register with the tax administrator and give the name and address

40-22

of all agents operating in this state, the location of all distribution or sales houses or offices, or of

40-23

any hotel, rooming house, or tourist camp or other places of business in this state, and other

40-24

information that the tax administrator may require.

40-25

     44-19-7. Registration of retailers [effective October 1, 2012]. -- Every retailer selling

40-26

tangible personal property, or prewritten computer software delivered electronically or by load

40-27

and leave for storage, use, or other consumption in this state, as well as services as defined in

40-28

section 44-18-7.3, in this state, or renting living quarters in any hotel as defined in section 42-

40-29

63.1-2, rooming house, or tourist camp in this state must register with the tax administrator and

40-30

give the name and address of all agents operating in this state, the location of all distribution or

40-31

sales houses or offices, or of any hotel as defined in section 42-63.1-2, rooming house, or tourist

40-32

camp or other places of business in this state, and other information that the tax administrator

40-33

may require.

41-34

     SECTION 6. Sections 44-20-1, 44-20-2, 44-20-3, 44-20-4.1, 44-20-12, 44-20-13, 44-20-

41-35

13.2, 44-20-39 and 44-20-45 of the General Laws in Chapter 44-20 entitled "Cigarette Tax" is

41-36

hereby amended to read as follows:

41-37

     44-20-1. Definitions. -- Whenever used in this chapter, unless the context requires

41-38

otherwise:

41-39

     (1) "Administrator" means the tax administrator;

41-40

     (2) "Cigarettes" means and includes any cigarettes suitable for smoking in cigarette form,

41-41

and each sheet of cigarette rolling paper;

41-42

     (3) "Dealer" means any person whether located within or outside of this state, who sells

41-43

or distributes cigarettes to a consumer in this state;

41-44

     (4) "Distributor" means any person:

41-45

     (A) Whether located within or outside of this state, other than a dealer, who sells or

41-46

distributes cigarettes within or into this state. Such term shall not include any cigarette

41-47

manufacturer, export warehouse proprietor, or importer with a valid permit under 26 U.S.C. §

41-48

5712, if such person sells or distributes cigarettes in this state only to licensed distributors, or to

41-49

an export warehouse proprietor or another manufacturer with a valid permit under 26 U.S.C. §

41-50

5712;

41-51

     (B) Selling cigarettes directly to consumers in this state by means of at least twenty-five

41-52

(25) cigarette vending machines;

41-53

     (C) Engaged in this state in the business of manufacturing cigarettes or any person

41-54

engaged in the business of selling cigarettes to dealers, or to other persons, for the purpose of

41-55

resale only; provided, that seventy-five percent (75%) of all cigarettes sold by that person in this

41-56

state are sold to dealers or other persons for resale and selling cigarettes directly to at least forty

41-57

(40) dealers or other persons for resale; or

41-58

     (D) Maintaining one or more regular places of business in this state for that purpose;

41-59

provided, that seventy-five percent (75%) of the sold cigarettes are purchased directly from the

41-60

manufacturer and selling cigarettes directly to at least forty (40) dealers or other persons for

41-61

resale;

41-62

     (5) "Importer" means any person who imports into the United States, either directly or

41-63

indirectly, a finished cigarette for sale or distribution;

41-64

     (6) "Licensed", when used with reference to a manufacturer, importer, distributor or

41-65

dealer, means only those persons who hold a valid and current license issued under § 44-20-2 for

41-66

the type of business being engaged in. When the term "licensed" is used before a list of entities,

41-67

such as "licensed manufacturer, importer, wholesale dealer, or retailer dealer," such term shall be

41-68

deemed to apply to each entity in such list;

42-1

     (7) "Manufacturer" means any person who manufactures, fabricates, assembles,

42-2

processes, or labels a finished cigarette;

42-3

     (8) "Person" means any individual, including an employee or agent, firm, fiduciary,

42-4

partnership, corporation, trust, or association, however formed;

42-5

     (9) "Place of business" means and includes any place where cigarettes are sold or where

42-6

cigarettes are stored or kept for the purpose of sale or consumption, including any vessel, vehicle,

42-7

airplane, train, or vending machine;

42-8

     (10) "Sale" or "sell" includes and applies to gifts, exchanges, and barter;

42-9

     (11) "Stamp" means the impression, device, stamp, label, or print manufactured, printed,

42-10

or made as prescribed by the administrator to be affixed to packages of cigarettes, as evidence of

42-11

the payment of the tax provided by this chapter or to indicate that the cigarettes are intended for a

42-12

sale or distribution in this state that is exempt from state tax under the provisions of state law; and

42-13

also includes impressions made by metering machines authorized to be used under the provisions

42-14

of this chapter.

42-15

     44-20-2. Importer, distributor, and dealer licenses required – Licenses required. --

42-16

Each person engaging in the business of selling cigarette and/or any tobacco products in this state,

42-17

including any distributor or dealer, shall secure a license from the administrator before engaging

42-18

in that business, or continuing to engage in it. A separate application and license is required for

42-19

each place of business operated by a distributor or dealer; provided, that an operator of vending

42-20

machines for cigarette products is not required to obtain a distributor's license for each machine.

42-21

If the applicant for a license does not have a place of business in this state, the license shall be

42-22

issued for such applicant's principal place of business, wherever located. A licensee shall notify

42-23

the administrator within thirty (30) days in the event that it changes its principal place of

42-24

business. A separate license is required for each class of business if the applicant is engaged in

42-25

more than one of the activities required to be licensed by this section. No person shall maintain or

42-26

operate or cause to be operated a vending machine for cigarette products without procuring a

42-27

dealer's license for each machine.

42-28

     44-20-3. Penalties for unlicensed business. -- Any distributor or dealer who sells, offers

42-29

for sale, or possesses with intent to sell, cigarettes and/or any tobacco products without a license

42-30

as provided in § 44-20-2, shall be fined in accordance with the provisions of and the penalties

42-31

contained in § 11-9-13.15.

42-32

     44-20-4.1. License availability. -- (a) No license under this chapter may be granted,

42-33

maintained or renewed if the applicant, or any combination of persons owning directly or

42-34

indirectly, in the aggregate, more than ten percent (10%) of the ownership any interests in the

43-1

applicant:

43-2

     (1) Owes five hundred dollars ($500) or more in delinquent cigarette taxes;

43-3

     (2) Is delinquent in any tax filings for one month or more;

43-4

     (2)(3) Had a license under this chapter revoked by the administrator within the past two

43-5

(2) years;

43-6

     (3)(4) Has been convicted of a crime relating to cigarettes stolen or counterfeit cigarettes;

43-7

     (4)(5) Is a cigarette manufacturer or importer that is neither: (i) a participating

43-8

manufacturer as defined in subsection II (jj) of the "Master Settlement Agreement" as defined in

43-9

§ 23-71-2; nor (ii) in full compliance with chapter 20.2 of this title and § 23-71-3;

43-10

     (5)(6) Has imported, or caused to be imported, into the United States any cigarette in

43-11

violation of 19 U.S.C. § 1681a; or

43-12

     (6)(7) Has imported, or caused to be imported into the United States, or manufactured for

43-13

sale or distribution in the United States any cigarette that does not fully comply with the Federal

43-14

Cigarette Labeling and Advertising Act (15 U.S.C. § 1331, et. seq).

43-15

     (b) No person shall apply for a new license or permit (as defined in § 44-19-1) or renewal

43-16

of a license or permit, and no license or permit shall be issued or renewed for any person, unless

43-17

all outstanding fines, fees or other charges relating to any license or permit held by that person

43-18

have been paid.

43-19

     (2) No license or permit shall be issued relating to a business at any specific location until

43-20

all prior licenses or permits relating to that location have been officially terminated and all fines,

43-21

fees or charges relating to the prior licenses have been paid or otherwise resolved or the

43-22

administrator has found that the person applying for the new license or permit is not acting as an

43-23

agent for the prior licensee or permit holder who is subject to any such related fines, fees or

43-24

charges that are still due. Evidence of such agency status includes, but is not limited to, a direct

43-25

familial relationship and/or an employment, contractual or other formal financial or business

43-26

relationship with the prior licensee or permit holder.

43-27

     (3) No person shall apply for a new license or permit pertaining to a specific location in

43-28

order to evade payment of any fines, fees or other charges relating to a prior license or permit for

43-29

that location.

43-30

     (4) No new license or permit shall be issued for a business at a specific location for which

43-31

a license or permit already has been issued unless there is a bona fide, good faith change in

43-32

ownership of the business at that location.

43-33

     (5) No license or permit shall be issued, renewed or maintained for any person, including

43-34

the owners of the business being licensed or having applied and received a permit, that has been

44-1

convicted of violating any criminal law relating to tobacco products, the payment of taxes or

44-2

fraud or has been ordered to pay civil fines of more than twenty-five thousand dollars ($25,000)

44-3

dollars for violations of any civil law relating to tobacco products, the payment of taxes or fraud.

44-4

     44-20-12. Tax imposed on cigarettes sold. -- A tax is imposed on all cigarettes sold or

44-5

held for sale in the state. The payment of the tax to be evidenced by stamps, which may be

44-6

affixed only by licensed distributors to the packages containing such cigarettes. Any cigarettes on

44-7

which the proper amount of tax provided for in this chapter has been paid, payment being

44-8

evidenced by the stamp, is not subject to a further tax under this chapter. The tax is at the rate of

44-9

one hundred seventy-three (173) one hundred seventy-five (175) mills for each cigarette.

44-10

     44-20-13. Tax imposed on unstamped cigarettes. -- A tax is imposed at the rate of one

44-11

hundred seventy-three (173) one hundred seventy-five (175) mills for each cigarette upon the

44-12

storage or use within this state of any cigarettes not stamped in accordance with the provisions of

44-13

this chapter in the possession of any consumer within this state.

44-14

     44-20-13.2. Tax imposed on smokeless tobacco, cigars, and pipe tobacco products. --

44-15

(a) A tax is imposed on all smokeless tobacco, cigars, and pipe tobacco products sold or held for

44-16

sale in the state by any person, the payment of the tax to be accomplished according to a

44-17

mechanism established by the administrator, division of taxation, department of administration.

44-18

Any tobacco product on which the proper amount of tax provided for in this chapter has been

44-19

paid, payment being evidenced by a stamp, is not subject to a further tax under this chapter. The

44-20

tax imposed by this section shall be as follows:

44-21

     (1) At the rate of eighty percent (80%) of the wholesale cost of cigars, pipe tobacco

44-22

products and smokeless tobacco other than snuff.

44-23

     (2) Notwithstanding the eighty percent (80%) rate in subsection (a) above, in the case of

44-24

cigars, the tax shall not exceed fifty cents ($.50) for each cigar.

44-25

     (3) At the rate of one dollar ($1.00) per ounce of snuff, and a proportionate tax at the like

44-26

rate on all fractional parts of an ounce thereof. Such tax shall be computed based on the net

44-27

weight as listed by the manufacturer, provided, however, that any product listed by the

44-28

manufacturer as having a net weight of less than 1.2 ounces shall be taxed as if the product has a

44-29

net weight of 1.2 ounces.

44-30

     (b) Any dealer having in his or her possession any tobacco, cigars, and pipe tobacco

44-31

products with respect to the storage or use of which a tax is imposed by this section shall, within

44-32

five (5) days after coming into possession of the tobacco, cigars, and pipe tobacco in this state,

44-33

file a return with the tax administrator in a form prescribed by the tax administrator. The return

44-34

shall be accompanied by a payment of the amount of the tax shown on the form to be due.

45-1

Records required under this section shall be preserved on the premises described in the relevant

45-2

license in such a manner as to ensure permanency and accessibility for inspection at reasonable

45-3

hours by authorized personnel of the administrator.

45-4

     (c) The proceeds collected are paid into the general fund.

45-5

     44-20-39. Forgery and counterfeiting – Tampering with meters – Reuse of stamps or

45-6

containers. -- Any person who fraudulently makes or utters or forges or counterfeits any stamp,

45-7

disc, license, or marker, prescribed by the tax administrator under the provisions of this chapter,

45-8

or who causes or procures this to be done, or who willfully utters, publishes, passes or renders as

45-9

true, any false, altered, forged, or counterfeited stamp, license, disc, or marker, or who knowingly

45-10

possesses more than twenty (20) packs of cigarettes containing any false, altered, forged, or

45-11

counterfeited stamp, license, disc, or marker, or who tampers with or causes to be tampered with

45-12

any metering machine authorized to be used under the provisions of this chapter, or who removes

45-13

or prepares any stamp with intent to use, or cause that stamp to be used, after it has already been

45-14

used, or who buys, sells, offers for sale, or gives away any washed or removed or restored stamp

45-15

to any person, or who has in his or her possession any washed or restored or removed or altered

45-16

stamp which was removed from the article to which it was affixed, or who reuses or refills with

45-17

cigarettes any package, box, or container required to be stamped under this chapter from which

45-18

cigarettes have been removed, is deemed guilty of a felony, and, upon conviction, shall be fined

45-19

ten thousand dollars ($10,000), or be imprisoned for not more than ten (10) years, or both.

45-20

     44-20-45. Importation of cigarettes with intent to evade tax. -- Any person, firm,

45-21

corporation, club, or association of persons, not having a license as provided in this chapter, who

45-22

orders any cigarettes for another or pools orders for cigarettes from any persons or connives with

45-23

others for pooling orders, or receives in this state any shipment of unstamped cigarettes on which

45-24

the tax imposed by this chapter has not been paid, for the purpose and intention of violating the

45-25

provisions of this chapter or to avoid payment of the tax imposed in this chapter, is guilty of a

45-26

felony and shall be fined ten thousand dollars ($10,000) or five (5) times the retail value of the

45-27

cigarettes involved, whichever is greater, or imprisoned not more than five (5) years, or both.

45-28

     SECTION 7. Chapter 44-20 of the General Laws entitled “Cigarette Tax” is hereby

45-29

amended by adding thereto the following section:

45-30

     44-20-12.4. Floor stock tax on cigarettes and stamps. -- (a) Whenever used in this