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art.009/8/009/7/009/6/009/5/009/4/009/3/009/2/009/1

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ARTICLE 9 AS AMENDED

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RELATING TO TAXATION

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     SECTION 1. Section 44-61-1.1 of the General Laws in Chapter 44-61 entitled "Relating

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To Depreciation of Assets and Net Operating Loss Deduction" is hereby amended to read as

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follows:

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     44-61-1.1. Expensing in lieu of depreciation of assets. -- (a) For purposes of expensing

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of assets under chapters 11, 14 and 30 of this title, the expense deduction shall not exceed the sum

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provided for twenty-five thousand dollars ($25,000) in any taxable year. The additional expensing

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of assets for federal tax purposes under section 179 of the Internal Revenue Code, 26 U.S.C.

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section 179 provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003 or any

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subsequent federal enactment shall not be allowed for Rhode Island tax purposes. In the year that

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those assets are placed in service expensing of assets and in all subsequent years, expenses and

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depreciation for Rhode Island tax purposes shall be allowed in the same manner as is provided for

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under section 179 of the internal revenue code 26 U.S.C. section 179 on those assets as it would

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have been computed prior to the enactment of the Jobs and Growth Tax Relief Reconciliation Act

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of 2003. Any remaining tax basis of the asset purchased shall be depreciated as provided for

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under the internal revenue service code sections 167 and 168, excluding section 168(k).

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      (b) The gain resulting from any subsequent disposition of these assets shall be computed

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using a basis consistent with the Rhode Island expenses and depreciation allowed under

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subsection (a) of this section.

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     (c) There is hereby established a depreciation of assets transfer fund for the purpose of

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reserving sufficient funding for the expensing of assets in accordance with subsection (a). The

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general assembly may appropriate such amounts to the fund deemed necessary for said purpose.

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     SECTION 2. Chapter 44-55 of the General Laws entitled "Tax Incentives for Employers"

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is hereby amended by adding thereto the following section:

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     44-55-8. Adding back the domestic production activities deduction. -- All

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corporations doing business in the state of Rhode Island shall add back into their taxable income

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any amount deducted under the federal "domestic production deduction" also known as section

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199 of the federal Internal Revenue Code. State tax forms shall be changed if needed in order to

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comply with this section.

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     SECTION 3. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes -

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Liability and Computation" is hereby amended by adding thereto the following section:

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     44-18-15.2. "Remote seller" and "remote sale" defined -- Collection of sales and use

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tax by remote seller. -- As used in this article:

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     (1) "Remote seller" means a person that makes remote sales in this state.

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     (2) "Remote sale" means a sale into this state for which the seller would not legally be

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required to pay, collect, or remit state or local sales and use taxes unless provided by federal law.

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     (c) Upon passage of any federal law authorizing states to require remote sellers to collect

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and remit sales and use taxes, this state will require a remote seller making remote sales in the

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state to pay, collect, and remit sales and use taxes at the rate imposed under section 44-18-18, and

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in accordance with the provisions of this article, chapters 44-18.1 and 44-19, and applicable

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federal law.

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     44-18-18. Sales tax imposed. -- A tax is imposed upon sales at retail in this state

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including charges for rentals of living quarters in hotels as defined in section 42-63.1-2, rooming

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houses, or tourist camps, at the rate of six percent (6%) of the gross receipts of the retailer from

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the sales or rental charges; provided, that the tax imposed on charges for the rentals applies only

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to the first period of not exceeding thirty (30) consecutive calendar days of each rental; provided,

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further, that for the period commencing July 1, 1990, the tax rate is seven percent (7%). The tax is

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paid to the tax administrator by the retailer at the time and in the manner provided. Excluded from

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this tax are those living quarters in hotels, rooming houses, or tourist camps for which the

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occupant has a written lease for the living quarters which lease covers a rental period of twelve

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(12) months or more. In recognition of the work being performed by the Streamlined Sales and

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Use Tax Governing Board, upon passage any federal law which authorizes states to require

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requires remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the

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first (1st) state fiscal quarter following the change, the rate imposed under section 44-18-18 shall

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be reduced from seven percent (7%) to six and one-half percent (6.5%). The six and one-half

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percent (6.5%) rate shall take effect on the date that the state requires remote sellers to collect and

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remit sale and use taxes.

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     44-18-18.1. Local meals and beverage tax. -- (a) There is hereby levied and imposed,

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upon every purchaser of a meal and/or beverage, in addition to all other taxes and fees now

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imposed by law, a local meals and beverage tax upon each and every meal and/or beverage sold

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within the state of Rhode Island in or from an eating and/or drinking establishment, whether

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prepared in the eating and/or drinking establishment or not and whether consumed at the premises

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or not, at a rate of one percent of the gross receipts. The tax shall be paid to the tax administrator

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by the retailer at the time and in the manner provided.

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      (b) All sums received by the division of taxation under this section as taxes, penalties or

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forfeitures, interest, costs of suit and fines shall be distributed at least quarterly, credited and paid

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by the state treasurer to the city or town where the meals and beverages are delivered.

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      (c) When used in this section, the following words have the following meanings:

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      (1) "Beverage" means all nonalcoholic beverages, as well as alcoholic beverages, beer,

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lager beer, ale, porter, wine, similar fermented malt or vinous liquor.

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      (2) "Eating and/or drinking establishments" mean and include restaurants, bars, taverns,

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lounges, cafeterias, lunch counters, drive-ins, roadside ice cream and refreshment stands, fish and

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chip places, fried chicken places, pizzerias, food and drink concessions, or similar facilities in

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amusement parks, bowling alleys, clubs, caterers, drive-in theatres, industrial plants, race tracks,

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shore resorts or other locations, lunch carts, mobile canteens and other similar vehicles, and other

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like places of business which furnish or provide facilities for immediate consumption of food at

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tables, chairs or counters or from trays, plates, cups or other tableware or in parking facilities

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provided primarily for the use of patrons in consuming products purchased at the location.

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Ordinarily, eating establishments do not mean and include food stores and supermarkets. Eating

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establishments do not mean "vending machines," a self-contained automatic device that dispenses

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for sale foods, beverages, or confection products. Retailers selling prepared foods in bulk either in

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customer-furnished containers or in the seller's containers, for example "Soup and Sauce"

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establishments, are deemed to be selling prepared foods ordinarily for immediate consumption

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and, as such, are considered eating establishments.

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      (3) "Meal" means any prepared food or beverage offered or held out for sale by an eating

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and/or drinking establishment for the purpose of being consumed by any person to satisfy the

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appetite and which is ready for immediate consumption. All such food and beverage, unless

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otherwise specifically exempted or excluded herein shall be included, whether intended to be

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consumed on the seller's premises or elsewhere, whether designated as breakfast, lunch, snack,

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dinner, supper or by some other name, and without regard to the manner, time or place of service.

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      (d) This local meals and beverage tax shall be administered and collected by the division

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of taxation and unless provided to the contrary in this chapter, all of the administration,

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collection, and other provisions of chapters 18 and 19 of this article apply.

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      In recognition of the work being performed by the Streamlined Sales and Use Tax

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Governing Board, upon passage of any federal law which authorizes states to require requires

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remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the first (1st)

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state fiscal quarter following the change, the rate imposed under section 44-18-18.1 shall be

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increased from one percent (1%) to one and one-half percent (1.5%). The one and one-half

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percent (1.5%) rate shall take effect on the date that the state requires remote sellers to collect and

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remit sales and use taxes.

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     44-18-20. Use tax imposed. -- (a) An excise tax is imposed on the storage, use, or other

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consumption in this state of tangible personal property, prewritten computer software delivered

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

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vehicle, a boat, an airplane, or a trailer, purchased from any retailer at the rate of six percent (6%)

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of the sale price of the property.

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

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

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

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

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

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

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trailers, and mobile homes.

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

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

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payable in any casual sale:

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

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child of the transferor or seller;

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

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

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

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subjected to a tax imposed by this chapter;

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

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or partner; and

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

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

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thereunder;

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

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

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home; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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opportunity to be heard, re-determine the tax.

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

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

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

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

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within the provisions of this chapter.

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      (g) (1) "Casual sale" includes a sale of tangible personal property not held or used by a

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

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

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

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

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

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activity were conducted in this state.

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

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

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

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

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

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

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sales.

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

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

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Sales and Use Tax Governing Board, upon passage of any federal law which authorizes states to

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require requires remote sellers to collect and remit sales and use taxes, effective the first (1st) day

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of the first (1st) state fiscal quarter following the change, the rate imposed under section 44-18-18

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shall be reduced from seven percent (7.0%) to six and one-half percent (6.5%). The six and one-

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half percent (6.5%) rate shall take effect on the date that the state requires remote sellers to collect

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and remit sales and use taxes.

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

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the taxes imposed by this chapter the following gross receipts:

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

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

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

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

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      (2) Newspapers.

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

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newspaper.

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

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

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interest.

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

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

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

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

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

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

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

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      (4) Containers.

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

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

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

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

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the contents with the container.

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

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

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

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the contents or when resold for refilling.

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

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

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returnable containers."

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

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

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

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

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

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

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

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

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

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

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

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

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women, and parent teacher associations.

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

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

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

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

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

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

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

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under the contracts without payment of the tax.

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

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

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

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

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

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pay the tax on the property used.

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

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

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propulsion of airplanes.

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      (7) Purchase for manufacturing purposes.

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

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

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refrigeration, and water, when the property or service is purchased for the purpose of being

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manufactured into a finished product for resale, and becomes an ingredient, component, or

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integral part of the manufactured, compounded, processed, assembled, or prepared product, or if

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

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

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

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

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      (iii) "Consumed" includes mere obsolescence.

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

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assembling, preparing, or producing.

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

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

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

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

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

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

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

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

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

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

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

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

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

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subdivision of the municipality where it is located.

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

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

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

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

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

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food is:

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

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except sub-sector 3118 (bakeries);

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

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

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donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and

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      is not sold with utensils provided by the seller, including plates, knives, forks, spoons,

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glasses, cups, napkins, or straws.

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

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

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

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

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

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7.1(h)(iii).

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

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

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

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

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

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

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

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storage, use, or other consumption in this state, of prosthetic devices as defined in section 44-18-

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7.1(t), sold on prescription, including but not limited to, artificial limbs, dentures, spectacles and

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

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

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wheelchairs, crutches and canes.

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

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

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

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      (13) Motor vehicles sold to nonresidents.

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

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

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

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

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

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

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

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

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

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

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

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

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

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motor vehicles.

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

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

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

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

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

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

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

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

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

10-17

under the provisions of section 44-18-20.

10-18

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

10-19

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

10-20

licensed under section 40-9-11.1.

10-21

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

10-22

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

10-23

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

10-24

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

10-25

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

10-26

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

10-27

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

10-28

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

10-29

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

10-30

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

10-31

device, building, machinery, or equipment.

10-32

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

10-33

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

10-34

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

11-1

operated summer camps for children.

11-2

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

11-3

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

11-4

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

11-5

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

11-6

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

11-7

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

11-8

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

11-9

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

11-10

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

11-11

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

11-12

inures to the benefit of any individual.

11-13

      (19) Motor vehicle and adaptive equipment for persons with disabilities.

11-14

      (i) From the sale of: (A) special adaptations, (B) the component parts of the special

11-15

adaptations, or (C) a specially adapted motor vehicle; provided, that the owner furnishes to the

11-16

tax administrator an affidavit of a licensed physician to the effect that the specially adapted motor

11-17

vehicle is necessary to transport a family member with a disability or where the vehicle has been

11-18

specially adapted to meet the specific needs of the person with a disability. This exemption

11-19

applies to not more than one motor vehicle owned and registered for personal, noncommercial

11-20

use.

11-21

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

11-22

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

11-23

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

11-24

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

11-25

devices to auditory signals.

11-26

      (iii) From the sale of: (a) special adaptations, (b) the component parts of the special

11-27

adaptations, for a "wheelchair accessible taxicab" as defined in section 39-14-1 and/or a

11-28

"wheelchair accessible public motor vehicle" as defined in section 39-14.1-1.

11-29

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

11-30

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

11-31

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

11-32

special adaptations, including installation.

11-33

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

11-34

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

12-1

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

12-2

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

12-3

      (22) Manufacturing machinery and equipment.

12-4

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

12-5

dies, and molds, and machinery and equipment (including replacement parts), and related items to

12-6

the extent used in an industrial plant in connection with the actual manufacture, conversion, or

12-7

processing of tangible personal property, or to the extent used in connection with the actual

12-8

manufacture, conversion or processing of computer software as that term is utilized in industry

12-9

numbers 7371, 7372, and 7373 in the standard industrial classification manual prepared by the

12-10

technical committee on industrial classification, office of statistical standards, executive office of

12-11

the president, United States bureau of the budget, as revised from time to time, to be sold, or that

12-12

machinery and equipment used in the furnishing of power to an industrial manufacturing plant.

12-13

For the purposes of this subdivision, "industrial plant" means a factory at a fixed location

12-14

primarily engaged in the manufacture, conversion, or processing of tangible personal property to

12-15

be sold in the regular course of business;

12-16

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

12-17

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

12-18

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

12-19

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

12-20

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

12-21

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

12-22

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

12-23

operations;

12-24

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

12-25

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

12-26

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

12-27

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

12-28

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

12-29

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

12-30

production flow or manufacturing process;

12-31

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

12-32

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

12-33

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

12-34

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

13-1

otherwise identifiable as to use.

13-2

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

13-3

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

13-4

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

13-5

the proceeds applicable only to the automobile as are received from the manufacturer of

13-6

automobiles for the repurchase of the automobile whether the repurchase was voluntary or not

13-7

towards the purchase of a new or used automobile by the buyer. For the purpose of this

13-8

subdivision, the word "automobile" means a private passenger automobile not used for hire and

13-9

does not refer to any other type of motor vehicle.

13-10

      (24) Precious metal bullion.

13-11

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

13-12

metal bullion, substantially equivalent to a transaction in securities or commodities.

13-13

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

13-14

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

13-15

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

13-16

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

13-17

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

13-18

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

13-19

uses.

13-20

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

13-21

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

13-22

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

13-23

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

13-24

of the vessels.

13-25

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

13-26

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

13-27

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

13-28

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

13-29

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

13-30

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

13-31

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

13-32

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

13-33

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

13-34

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

14-1

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

14-2

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

14-3

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

14-4

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

14-5

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

14-6

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

14-7

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

14-8

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

14-9

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

14-10

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

14-11

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

14-12

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

14-13

thereto.

14-14

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

14-15

intended to be worn or carried on or about the human body for sales prior to October 1, 2012.

14-16

Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including

14-17

footwear, intended to be worn or carried on or about the human body up to two hundred and fifty

14-18

dollars ($250) of the sales price per item. For the purposes of this section, "clothing or footwear"

14-19

does not include clothing accessories or equipment or special clothing or footwear primarily

14-20

designed for athletic activity or protective use as these terms are defined in section 44-18-7.1(f).

14-21

In recognition of the work being performed by the Streamlined Sales and Use Tax Governing

14-22

Board, upon passage of any federal law which authorizes states to require requires remote sellers

14-23

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

14-24

quarter following the change, this unlimited exemption will apply as it did prior to October 1,

14-25

2012. The unlimited exemption on sales of clothing and footwear shall take effect on the date that

14-26

the state requires remote sellers to collect and remit sales and use taxes.

14-27

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

14-28

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

14-29

premises.

14-30

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

14-31

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

14-32

any canonized scriptures of any tax-exempt nonprofit religious organization including, but not

14-33

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

15-34

      (30) Boats.

15-35

      (i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not

15-36

register the boat or vessel in this state, or document the boat or vessel with the United States

15-37

government at a home port within the state, whether the sale or delivery of the boat or vessel is

15-38

made in this state or elsewhere; provided, that the nonresident transports the boat within thirty

15-39

(30) days after delivery by the seller outside the state for use thereafter solely outside the state.

15-40

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

15-41

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

15-42

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

15-43

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

15-44

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

15-45

nonresident of this state.

15-46

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

15-47

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

15-48

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

15-49

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

15-50

the schools or of organized activities of the enrolled students.

15-51

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

15-52

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

15-53

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

15-54

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

15-55

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

15-56

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

15-57

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

15-58

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

15-59

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

15-60

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

15-61

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

15-62

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

15-63

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

15-64

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

15-65

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

15-66

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

15-67

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

15-68

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

16-1

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

16-2

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

16-3

exemptions, proof of the requisite amount of annual gross sales from commercial farming shall be

16-4

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

16-5

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

16-6

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

16-7

exemption issued or renewed after July 1, 2002, shall clearly indicate the level of the exemption

16-8

and be valid for four (4) years after the date of issue. This exemption applies even if the same

16-9

equipment is used for ancillary uses, or is temporarily used for a non-farming or a non-

16-10

agricultural purpose, but shall not apply to motor vehicles acquired after July 1, 2002, unless the

16-11

vehicle is a farm vehicle as defined pursuant to section 31-1-8 and is eligible for registration

16-12

displaying farm plates as provided for in section 31-3-31.

16-13

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

16-14

the state of compressed air.

16-15

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

16-16

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

16-17

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

16-18

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

16-19

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

16-20

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

16-21

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

16-22

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

16-23

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

16-24

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

16-25

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

16-26

by any purveyor.

16-27

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

16-28

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

16-29

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

16-30

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

16-31

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

16-32

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

16-33

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

16-34

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

17-1

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

17-2

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

17-3

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

17-4

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

17-5

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

17-6

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

17-7

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

17-8

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

17-9

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

17-10

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

17-11

(iii) are mailed to customers at no charge.

17-12

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

17-13

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

17-14

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

17-15

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

17-16

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

17-17

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

17-18

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

17-19

the number of hours spent on the job.

17-20

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

17-21

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

17-22

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

17-23

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

17-24

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

17-25

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

17-26

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

17-27

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

17-28

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

17-29

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

17-30

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

17-31

numismatic or investment value.

17-32

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

17-33

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

17-34

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

18-1

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

18-2

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

18-3

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

18-4

farming.

18-5

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

18-6

telecommunications service when purchased by a telecommunications company from another

18-7

telecommunications company to facilitate the provision of telecommunications service.

18-8

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

18-9

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

18-10

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

18-11

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

18-12

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

18-13

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

18-14

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

18-15

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

18-16

vessel.

18-17

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

18-18

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

18-19

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

18-20

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

18-21

and is not returned to the jewelry manufacturer or seller.

18-22

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

18-23

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

18-24

storage, use, or other consumption in this state of any new or used boat. The exemption provided

18-25

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

18-26

federal ten percent (10%) surcharge on luxury boats is repealed.

18-27

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

18-28

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

18-29

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

18-30

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

18-31

subdivision; provided, that an eligible company employs on average during the calendar year no

18-32

less than five hundred (500) "full-time equivalent employees", as that term is defined in section

18-33

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

18-34

company" as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C. section 1 et

19-1

seq., or a corporation to the extent the service is provided, directly or indirectly, to or on behalf of

19-2

a regulated investment company, an employee benefit plan, a retirement plan or a pension plan or

19-3

a state chartered bank.

19-4

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

19-5

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

19-6

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

19-7

      (51) Manufacturing business reconstruction materials.

19-8

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

19-9

hardware, and other building materials used in the reconstruction of a manufacturing business

19-10

facility which suffers a disaster, as defined in this subdivision, in this state. "Disaster" means any

19-11

occurrence, natural or otherwise, which results in the destruction of sixty percent (60%) or more

19-12

of an operating manufacturing business facility within this state. "Disaster" does not include any

19-13

damage resulting from the willful act of the owner of the manufacturing business facility.

19-14

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

19-15

the production and administrative facilities.

19-16

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

19-17

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

19-18

      (iv) To the extent that the costs of the reconstruction materials are reimbursed by

19-19

insurance, this exemption does not apply.

19-20

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

19-21

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

19-22

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

19-23

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

19-24

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

19-25

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

19-26

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

19-27

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

19-28

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

19-29

food, insecticide and fertilizers.

19-30

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

19-31

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

19-32

the boarding of horses.

19-33

      (54) Non-motorized recreational vehicles sold to nonresidents.

20-34

      (i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to

20-35

a bona fide nonresident of this state who does not register the non-motorized recreational vehicle

20-36

in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this

20-37

state or at the place of residence of the nonresident; provided, that a non-motorized recreational

20-38

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

20-39

to its nonresidents is not exempt from the tax imposed under section 44-18-20; provided, further,

20-40

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

20-41

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

20-42

have been imposed under section 44-18-20. Notwithstanding any other provisions of law, a

20-43

licensed non-motorized recreational vehicle dealer shall add and collect the tax required under

20-44

this subdivision and remit the tax to the tax administrator under the provisions of chapters 18 and

20-45

19 of this title. Provided, that when a Rhode Island licensed non-motorized recreational vehicle

20-46

dealer is required to add and collect the sales and use tax on the sale of a non-motorized

20-47

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

20-48

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

20-49

of motor vehicles.

20-50

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

20-51

28, may require any licensed non-motorized recreational vehicle dealer to keep records of sales to

20-52

bona fide nonresidents as the tax administrator deems reasonably necessary to substantiate the

20-53

exemption provided in this subdivision, including the affidavit of a licensed non-motorized

20-54

recreational vehicle dealer that the purchaser of the non-motorized recreational vehicle was the

20-55

holder of, and had in his or her possession a valid out-of-state non-motorized recreational vehicle

20-56

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

20-57

      (iii) Any nonresident who registers a non-motorized recreational vehicle in this state

20-58

within ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-

20-59

motorized recreational vehicle for use, storage, or other consumption in this state, and is subject

20-60

to, and liable for the use tax imposed under the provisions of section 44-18-20.

20-61

      (iv) "Non-motorized recreational vehicle" means any portable dwelling designed and

20-62

constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use

20-63

which is eligible to be registered for highway use, including, but not limited to, "pick-up coaches"

20-64

or "pick-up campers," "travel trailers," and "tent trailers" as those terms are defined in chapter 1

20-65

of title 31.

20-66

      (55) Sprinkler and fire alarm systems in existing buildings. - From the sale in this state of

20-67

sprinkler and fire alarm systems, emergency lighting and alarm systems, and from the sale of the

20-68

materials necessary and attendant to the installation of those systems, that are required in

21-1

buildings and occupancies existing therein in July 2003, in order to comply with any additional

21-2

requirements for such buildings arising directly from the enactment of the Comprehensive Fire

21-3

Safety Act of 2003, and that are not required by any other provision of law or ordinance or

21-4

regulation adopted pursuant to that Act. The exemption provided in this subdivision shall expire

21-5

on December 31, 2008.

21-6

      (56) Aircraft. - Notwithstanding the provisions of this chapter, the tax imposed by

21-7

sections 44-18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or

21-8

other consumption in this state of any new or used aircraft or aircraft parts.

21-9

      (57) Renewable energy products. - Notwithstanding any other provisions of Rhode

21-10

Island general laws the following products shall also be exempt from sales tax: solar photovoltaic

21-11

modules or panels, or any module or panel that generates electricity from light; solar thermal

21-12

collectors, including, but not limited to, those manufactured with flat glass plates, extruded

21-13

plastic, sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-

21-14

water and water-to-air type pumps; wind turbines; towers used to mount wind turbines if

21-15

specified by or sold by a wind turbine manufacturer; DC to AC inverters that interconnect with

21-16

utility power lines; manufactured mounting racks and ballast pans for solar collector, module or

21-17

panel installation. Not to include materials that could be fabricated into such racks; monitoring

21-18

and control equipment, if specified or supplied by a manufacturer of solar thermal, solar

21-19

photovoltaic, geothermal, or wind energy systems or if required by law or regulation for such

21-20

systems but not to include pumps, fans or plumbing or electrical fixtures unless shipped from the

21-21

manufacturer affixed to, or an integral part of, another item specified on this list; and solar storage

21-22

tanks that are part of a solar domestic hot water system or a solar space heating system. If the tank

21-23

comes with an external heat exchanger it shall also be tax exempt, but a standard hot water tank is

21-24

not exempt from state sales tax.

21-25

      (58) Returned property. - The amount charged for property returned by customers upon

21-26

rescission of the contract of sale when the entire amount exclusive of handling charges paid for

21-27

the property is refunded in either cash or credit, and where the property is returned within one

21-28

hundred twenty (120) days from the date of delivery.

21-29

      (59) Dietary Supplements. - From the sale and from the storage, use or other

21-30

consumption of dietary supplements as defined in section 44-18-7.1(l)(v), sold on prescriptions.

21-31

      (60) Blood. - From the sale and from the storage, use or other consumption of human

21-32

blood.

21-33

      (61) Agricultural products for human consumption. - From the sale and from the storage,

21-34

use or other consumption of livestock and poultry of the kinds of products of which ordinarily

22-1

constitute food for human consumption and of livestock of the kind the products of which

22-2

ordinarily constitute fibers for human use.

22-3

      (62) Diesel emission control technology. - From the sale and use of diesel retrofit

22-4

technology that is required by section 31-47.3-4 of the general laws.

22-5

      (63) Feed for certain animals used in commercial farming. - From the sale of feed for

22-6

animals as described in subsection 44-18-30(61).

22-7

     (64) Alcoholic beverages. - From the sale and storage, use, or other consumption in this

22-8

state by a Class A licensee of alcoholic beverages, as defined in section 44-18-7.1, excluding beer

22-9

and malt beverages from December 1, 2013 through March 31, 2015; provided, further,

22-10

notwithstanding section 6-13-1 or any other general or public law to the contrary, alcoholic

22-11

beverages, as defined in section 44-18-7.1, shall not be subject to minimum markup from

22-12

December 1, 2013 through March 31, 2015.

22-13

     SECTION 4. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled

22-14

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

22-15

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

22-16

the rate of five and forty-three hundredths percent (5.43%) upon the net patient services revenue

22-17

of every hospital for the hospital's first fiscal year ending on or after January 1, 2010. This

22-18

licensing fee shall be administered and collected by the tax administrator, division of taxation

22-19

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

22-20

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

22-21

to the tax administrator on or before July 16, 2012 and payments shall be made by electronic

22-22

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

22-23

44-50-11 [repealed]. Every hospital shall, on or before June 18, 2012, make a return to the tax

22-24

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

22-25

fiscal year ending September 30, 2010, and the licensing fee due upon that amount. All returns

22-26

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

22-27

perjury.

22-28

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

22-29

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

22-30

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

22-31

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

22-32

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

22-33

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

22-34

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

23-1

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

23-2

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

23-3

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

23-4

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

23-5

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

23-6

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

23-7

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

23-8

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

23-9

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

23-10

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

23-11

forty-six thousandths percent (5.246%) upon the net patient services revenue of every hospital for

23-12

the hospital's first fiscal year ending on or after January 1, 2012, except that the license fee for all

23-13

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

23-14

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

23-15

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

23-16

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

23-17

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

23-18

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

23-19

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

23-20

shall pay the licensing fee to the tax administrator on or before July 14, 2014 and payments shall

23-21

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

23-22

fund. Every hospital shall, on or before June 16, 2014, make a return to the tax administrator

23-23

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

23-24

ending September 30, 2012, and the licensing fee due upon that amount. All returns shall be

23-25

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

23-26

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

23-27

meanings:

23-28

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

23-29

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

23-30

primary bed inventory are psychiatric.

23-31

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

23-32

services.

23-33

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

23-34

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

24-1

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

24-2

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

24-3

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

24-4

of this section.

24-5

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

24-6

which are duly licensed on July 1, 2012 2013, and shall be in addition to the inspection fee

24-7

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

24-8

38.1.

24-9

     SECTION 5. Chapter 44-1 of the General Laws entitled "State Tax Officials" is hereby

24-10

amended by adding thereto the following section:

24-11

     44-1-35. Outside Collection Agencies. -- The tax administrator may retain by written

24-12

contract collection agencies licensed under Rhode Island law, or licensed under the laws of

24-13

another state or the District of Columbia, for the purpose of collecting from sources outside the

24-14

state of Rhode Island taxes, interest and/or penalties assessed by the tax administrator.

24-15

     SECTION 6. Title 44 of the General Laws entitled "Taxation" is hereby amended by

24-16

adding thereto the following chapter:

24-17

     CHAPTER 68

24-18

     TAX PREPARERS ACT OF 2013

24-19

     44-68-1. Short title. -- This chapter shall be known as the "Tax Preparers Act".

24-20

     44-68-2. Definitions. -- (a) "Tax return preparer" means an individual who prepares a

24-21

substantial portion of any return for compensation. Tax return preparers include individuals

24-22

required to register with the Internal Revenue Service as a tax return preparer and who have a

24-23

Preparer Tax Identification Number (PTIN). For the purpose of this chapter the following

24-24

individuals shall not be considered tax return preparers:

24-25

     (1) Volunteer tax return preparers; or

24-26

     (2) Employees of a tax return preparer and employees of a commercial tax return

24-27

preparation business who provide only clerical, administration or other similar services.

24-28

     (b) "Preparer Tax Identification Number" means the number issued by the Internal

24-29

Revenue Service (IRS) to paid preparers to use on all the returns they prepare.

24-30

     (c) "Return" shall mean any tax report, return, claim for refund or attachment to any

24-31

report, return and/or claim for return filed with the tax administrator pursuant to the tax laws of

24-32

this state.

24-33

     44-68-3. Duties and Responsibilities. -- (a) A tax return preparer who prepares any

24-34

return that is submitted to the tax administrator must comply with all state laws and all applicable

25-1

regulations promulgated by the tax administrator.

25-2

     (b) A tax return preparer must sign and include his/her Preparer Tax Identification

25-3

Number on all returns prepared and filed with the Division of Taxation.

25-4

     44-68-4. Civil Penalties. -- (a) Failure To Be Diligent in Determining Eligibility for or

25-5

Amount of Earned Income Credit. Upon a determination by the tax administrator that a tax return

25-6

preparer prepared a return(s) and failed to comply with due diligence requirements imposed by

25-7

regulations issued by the tax administrator with respect to determining eligibility for, or the

25-8

amount of, the credit allowable by section 44-30-2.6(c)(2)(N), the tax return preparer shall pay a

25-9

penalty of five hundred dollars ($500) for each such return and/or claim.

25-10

     (b) Failure To Be Diligent in Determining Eligibility for Property Tax Relief Credit.

25-11

Upon a determination by the tax administrator that a tax return preparer prepared a return(s) and

25-12

failed to comply with due diligence requirements imposed by regulations issued by the tax

25-13

administrator with respect to determining eligibility for, or the amount of, the property tax relief

25-14

credit allowable by section 44-33-1 et seq., the tax return preparer shall pay a penalty of five

25-15

hundred dollars ($500) for each such return.

25-16

     (c) Tax Return Preparer Civil Penalties. Upon a determination by the tax administrator

25-17

that a tax return preparer willfully prepared, assisted in preparing, or caused the preparation of a

25-18

return(s) filed with the division of taxation with intent to wrongfully obtain a property tax relief

25-19

credit or with the intent to evade or reduce a tax obligation, the tax return preparer shall be liable

25-20

for a penalty of one thousand dollars ($1,000), or five hundred ($500) for each return so filed

25-21

during any calendar year, whichever is greater.

25-22

     (d) The tax administrator may suspend or revoke the privilege of a tax return preparer to

25-23

prepare and/or file returns with the division of taxation upon a determination that the tax return

25-24

preparer has failed to comply with or violated any provision of this section, any regulations issued

25-25

by the tax administrator, or with any provision of any other laws relative to the preparation of tax

25-26

returns. Any tax return preparer receiving a notice of intent to suspend or revoke the privilege to

25-27

file tax returns with the division of taxation may request a hearing on the notice of intent to

25-28

suspend or revoke; provided that said request for a hearing must be made within thirty (30) days

25-29

of such notice to suspend or revoke. If, after hearing, the tax return preparer is aggrieved by a

25-30

decision of the tax administrator (or his or her designated hearing officer), the tax return preparer

25-31

may, within thirty (30) days after notice of the decision is sent to the tax return preparer by

25-32

certified or registered mail, directed to their last known address, petition the sixth division of the

25-33

district court pursuant to chapter 8 of title 8, setting forth the reasons why the decision is alleged

25-34

to be erroneous and praying for relief therefrom.

26-1

     44-68-5. Criminal Penalties. -- Any tax return preparer who has previously been

26-2

assessed a penalty by the tax administrator under section 44-68-4(c) who is found by a court of

26-3

competent jurisdiction to have thereafter willfully prepared, assisted in preparing, or caused a

26-4

preparation of another false tax return or claim for refund which was filed with the division of

26-5

taxation with the intent to wrongfully obtain a property relief credit or the intent to wrongfully

26-6

evade or reduce a tax obligation shall be guilty of a felony and, on conviction, shall be subject to

26-7

a fine not exceeding fifty-thousand dollars ($50,000) or imprisonment not exceeding five (5)

26-8

years or both.

26-9

     44-68-6. Regulations. -- The tax administrator shall promulgate rules and regulations in

26-10

order to implement the provisions of this chapter.

26-11

     44-68-7. Severability. -- If any provision of this chapter or the application of this chapter

26-12

to any tax return preparer is held invalid, the remainder of this chapter and the application of the

26-13

provisions to other tax return preparers or circumstances shall not be affected.

26-14

     SECTION 7. Section 28-21-16 of the General Laws entitled "Hazardous Substances

26-15

Right to Know Act - Funding" is hereby amended to read as follows:

26-16

     28-21-16. Funding -- Contracts for services -- Exemption for copiers -- Appeals. --

26-17

(a) The director of labor and training shall determine which employers are subject to the

26-18

provisions of this chapter. and shall assess and collect an annual assessment of forty-two dollars

26-19

($42.00) which shall be levied against all those employers, which result in the funding for the

26-20

implementation of this chapter. The employer shall be obligated to pay the assessment. No

26-21

employer shall be exempt from the provisions of this chapter unless and until a request for

26-22

exemption is filed and approval is granted; provided that public and private libraries shall be

26-23

exempted exempt from this requirement. The funds shall be deposited as general revenue.

26-24

     (b) The director of labor and training may contract with qualified agencies and/or parties

26-25

for technical services performed in conjunction with this chapter.

26-26

     (c) The director of labor and training shall exempt from this chapter all employers whose

26-27

contact with the designated substances is entirely limited to copier machine powders or liquids

26-28

where the exposure is incidental to the business operation.

26-29

     (d) Any employer who contests the determination of the director may appeal the

26-30

determination under the provisions set forth in sections 28-20-19 and 28-20-20.

26-31

     SECTION 8. Section 3-10-1 of the General Laws in Chapter 3-10 entitled "Taxation of

26-32

Beverages" is hereby amended to read as follows:

26-33

     3-10-1. Manufacturing tax rates -- Exemption of religious uses. -- (a) There shall be

26-34

assessed and levied by the tax administrator on all beverages manufactured, rectified, blended, or

27-1

reduced for sale in this state a tax of three dollars ($3.00) three dollars and thirty cents ($3.30) on

27-2

every thirty-one (31) gallons, and a tax at a like rate for any other quantity or fractional part. On

27-3

any beverage manufactured, rectified, blended, or reduced for sale in this state consisting in

27-4

whole or in part of wine, whiskey, rum, gin, brandy spirits, ethyl alcohol, or other strong liquors

27-5

(as distinguished from beer or other brewery products) the tax to be assessed and levied is as

27-6

follows:

27-7

      (1) Still wines (whether fortified or not), sixty cents ($.60) one dollar and forty cents

27-8

($1.40) per gallon;

27-9

      (2) Still wines (whether fortified or not) made entirely from fruit grown in this state,

27-10

thirty cents ($.30) per gallon;

27-11

      (3) Sparkling wines (whether fortified or not), seventy five cents ($.75) per gallon;

27-12

      (4) Whiskey, rum, gin, brandy spirits, cordials, and other beverages consisting in whole

27-13

or in part of alcohol which is the product of distillation, three dollars and seventy-five cents

27-14

($3.75) five dollars and forty cents ($5.40) per gallon, except that whiskey, rum, gin, brandy

27-15

spirits, cordials, and other beverages consisting in whole or in part of alcohol which is the product

27-16

of distillation but which contains alcohol measuring thirty (30) proof or less, one dollar and ten

27-17

cents ($1.10) per gallon;

27-18

      (5) Ethyl alcohol to be used for beverage purposes, seven dollars and fifty cents ($7.50)

27-19

per gallon; and

27-20

      (6) Ethyl alcohol to be used for nonbeverage purposes, eight cents ($.08) per gallon.

27-21

      (b) Sacramental wines are not subject to any tax if sold directly to a member of the

27-22

clergy for use by the purchaser, or his or her congregation for sacramental or other religious

27-23

purposes.

27-24

      (c) A brewer who brews beer in this state which is actively and directly owned,

27-25

managed, and operated by an authorized legal entity which has owned, managed, and operated a

27-26

brewery in this state for at least twelve (12) consecutive months, shall receive a tax exemption on

27-27

the first one hundred thousand (100,000) barrels of beer that it produces and distributes in this

27-28

state in any calendar year. A barrel of beer is thirty one (31) gallons.

27-29

     SECTION 9. Section 3-10-5 of the General Laws in Chapter 3-10 entitled "Taxation of

27-30

Beverages" is hereby amended to read as follows:

27-31

     3-10-5. Information supplemental to returns -- Audit of books. -- (a) The tax

27-32

administrator may at any time request further information from any person or from the officers

27-33

and employees of any corporation which he or she may deem necessary to verify, explain or

27-34

correct any return made in pursuance of the provisions of this chapter, and for the like purpose the

28-1

administrator or his or her authorized agent may examine the books of account of that person or

28-2

corporation during business hours.

28-3

      (b) Each Class A licensee authorized to sell intoxicating beverages at wholesale or retail

28-4

in this state shall file an annual report on or before February 1 with the division of taxation in the

28-5

form required by the tax administrator. Such report shall included, but not limited to, total sales of

28-6

alcoholic beverages, sales tax and excise tax collections on such sales for immediately preceding

28-7

calendar year. Annually, on or before May 1, the tax administrator shall prepare and submit to the

28-8

chairs of house and senate finance committees a report reflecting data from the annuals reports

28-9

submitted by said licensee to the division of taxation. The tax administrator's report shall compile

28-10

total sales of alcoholic beverages, sales tax and excise tax collections by county.

28-11

     SECTION 10. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video

28-12

Lottery Terminal" is hereby amended to read as follows:

28-13

     42-61.2-7. Division of revenue. [Effective June 30, 2011.] -- (a) Notwithstanding the

28-14

provisions of section 42-61-15, the allocation of net terminal income derived from video lottery

28-15

games is as follows:

28-16

      (1) For deposit in the general fund and to the state lottery division fund for

28-17

administrative purposes: Net terminal income not otherwise disbursed in accordance with

28-18

subdivisions (a)(2) -- (a)(6) herein;

28-19

      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

28-20

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

28-21

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

28-22

community shall receive more than twenty-five percent (25%) of that community's currently

28-23

enacted municipal budget as its share under this specific subsection. Distributions made under

28-24

this specific subsection are supplemental to all other distributions made under any portion of

28-25

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

28-26

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

28-27

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

28-28

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

28-29

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

28-30

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

28-31

2009 and shall be made from general appropriations, provided however that $784,458 of the total

28-32

appropriation shall be distributed equally to each qualifying distressed community. For each of

28-33

the fiscal years ending June 30, 2011, June 30, 2012, and June 30, 2013 seven hundred eighty-

28-34

four thousand four hundred fifty-eight dollars ($784,458) of the total appropriation shall be

29-1

distributed equally to each qualifying distressed community.

29-2

      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

29-3

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

29-4

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

29-5

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

29-6

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

29-7

less than the prior fiscal year.

29-8

      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

29-9

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

29-10

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

29-11

shall the exemption in any fiscal year be less than the prior fiscal year.

29-12

      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

29-13

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

29-14

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

29-15

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

29-16

distributions by community shall be identical to the distributions made in the fiscal year ending

29-17

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

29-18

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

29-19

funding shall be determined by appropriation.

29-20

      (2) To the licensed video lottery retailer:

29-21

      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

29-22

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

29-23

($384,996);

29-24

      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

29-25

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

29-26

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

29-27

($384,996).

29-28

      (iii) Effective July 1, 2013, provided that the referendum measure authorized by Section

29-29

1 of Chapters 24 and 25 of the Public Laws of 2012 is approved statewide and in the City of

29-30

Newport and provided further that Newport Grand commences and continues to offer table

29-31

games, the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand

29-32

Master Contract shall increase by one and one half percentage (1.5%) points. Effective July 1,

29-33

2013 the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand

29-34

Master Contract shall increase by two and one quarter percent (2.25%) points. The increase

30-1

herein shall sunset and expire on June 30, 2015 and the rate in effect as of June 30, 2013 shall be

30-2

reinstated.

30-3

      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

30-4

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

30-5

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

30-6

thousand six hundred eighty-seven dollars ($767,687);

30-7

      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

30-8

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

30-9

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

30-10

($767,687).

30-11

      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

30-12

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

30-13

terminal income of the provider's terminals; in addition thereto, technology providers who

30-14

provide premium or licensed proprietary content or those games that have unique characteristics

30-15

such as 3D graphics, unique math/game play features or merchandising elements to video lottery

30-16

terminals may receive incremental compensation, either in the form of a daily fee or as an

30-17

increased percentage, if all of the following criteria are met:

30-18

      (A) A licensed video lottery retailer has requested the placement of premium or licensed

30-19

proprietary content at its licensed video lottery facility;

30-20

      (B) The division of lottery has determined in its sole discretion that the request is likely

30-21

to increase net terminal income or is otherwise important to preserve or enhance the

30-22

competiveness of the licensed video lottery retailer;

30-23

      (C) After approval of the request by the division of lottery, the total number of premium

30-24

or licensed propriety content video lottery terminals does not exceed ten percent (10%) of the

30-25

total number of video lottery terminals authorized at the respective licensed video lottery retailer;

30-26

and

30-27

      (D) All incremental costs are shared between the division and the respective licensed

30-28

video lottery retailer based upon their proportionate allocation of net terminal income. The

30-29

division of lottery is hereby authorized to amend agreements with the licensed video lottery

30-30

retailers, or the technology providers, as applicable, to effect the intent herein.

30-31

      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

30-32

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

30-33

      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

30-34

proportionately from the payments to technology providers the sum of six hundred twenty-eight

31-1

thousand seven hundred thirty-seven dollars ($628,737);

31-2

      (4) (A) To the city of Newport one and one hundredth percent (1.01%) of net terminal

31-3

income of authorized machines at Newport Grand, except that:

31-4

      (i) Effective November 9, 2009 until June 30, 2013, the allocation shall be one and two

31-5

tenths percent (1.2%) of net terminal income of authorized machines at Newport Grand for each

31-6

week the facility operates video lottery games on a twenty-four (24) hour basis for all eligible

31-7

hours authorized, and

31-8

      (ii) Effective July 1, 2013, provided that the referendum measure authorized by Section 1

31-9

of Chapters 24 and 25 of the Public Laws of 2012 is approved statewide and in the City of

31-10

Newport, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal

31-11

income of authorized video lottery terminals at Newport Grand; and

31-12

      (B) To the town of Lincoln one and twenty-six hundredths percent (1.26%) of net

31-13

terminal income of authorized machines at Twin River except that,

31-14

      (i) Effective November 9, 2009 until June 30, 2013, the allocation shall be one and forty-

31-15

five hundredths percent (1.45%) of net terminal income of authorized machines at Twin River for

31-16

each week video lottery games are offered on a twenty-four (24) hour basis for all eligible hours

31-17

authorized, and

31-18

      (ii) Effective July 1, 2013, provided that the referendum measure authorized by Article

31-19

25, Chapter 151, Section 4 of the Public Laws of 2011 is approved statewide and in the Town of

31-20

Lincoln, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal

31-21

income of authorized video lottery terminals at Twin River; and

31-22

      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

31-23

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

31-24

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

31-25

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

31-26

ownership and improvement, elderly housing, adult vocational training; health and social

31-27

services; childcare; natural resource protection; and economic development consistent with state

31-28

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

31-29

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

31-30

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

31-31

debts; and

31-32

      (6) Unclaimed prizes and credits shall remit to the general fund of the state; and

31-33

      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(6) shall

31-34

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

32-1

close of the month except for the last month when payment shall be on the last business day.

32-2

      (b) Notwithstanding the above, the amounts payable by the Division to UTGR related to

32-3

the Marketing Program shall be paid on a frequency agreed by the Division, but no less

32-4

frequently than annually.

32-5

      (c) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

32-6

Director is authorized to fund the Marketing Program as described above in regard to the First

32-7

Amendment to the UTGR Master Contract.

32-8

      (d) Notwithstanding the above, the amounts payable by the Division to Newport Grand

32-9

related to the Marketing Program shall be paid on a frequency agreed by the Division, but no less

32-10

frequently than annually.

32-11

      (e) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

32-12

Director is authorized to fund the Marketing Program as described above in regard to the First

32-13

Amendment to the Newport Grand Master Contract.

32-14

      (f) Notwithstanding the provisions of section 42-61-15, the allocation of Net Table Game

32-15

Revenue derived from Table Games at Twin River is as follows:

32-16

      (1) For deposit into the state lottery fund for administrative purposes and then the

32-17

balance remaining into the general fund:

32-18

      (i) Sixteen percent (16%) of Net Table Game Revenue, except as provided in subsection

32-19

(f)(1)(ii);

32-20

      (ii) An additional two percent (2%) of Net Table Game Revenue generated at Twin

32-21

River shall be allocated starting from the commencement of Table Game activities by such Table

32-22

Game Retailer, and ending, with respect to such Table Game Retailer, on the first date that such

32-23

Table Game Retailer's net terminal income for a full State fiscal year is less than such Table

32-24

Game Retailer's net terminal income for the prior State fiscal year, at which point this additional

32-25

allocation to the State shall no longer apply to such Table Game Retailer.

32-26

      (2) To UTGR, Net Table Game Revenue not otherwise disbursed pursuant to above

32-27

subsection (f)(1); provided, however, on the first date that such Table Game Retailer's net

32-28

terminal income for a full State fiscal year is less than such Table Game Retailer's net terminal

32-29

income for the prior State fiscal year, as set forth in subsection (f)(1)(ii) above, one percent (1%)

32-30

of this Net Table Game Revenue shall be allocated to the town of Lincoln for four (4) consecutive

32-31

State fiscal years.

32-32

      (g) Notwithstanding the provisions of section 42-61-15, the allocation of Net Table

32-33

Game Revenue derived from Table Games at Newport Grand is as follows:

33-34

      (1) For deposit into the state lottery fund for administrative purposes and then the

33-35

balance remaining into the general fund: eighteen percent (18%) of Net Table Game Revenue.

33-36

      (2) To Newport Grand LLC, Net Table Game Revenue not otherwise disbursed pursuant

33-37

to above subsection (g)(1) provided, however, on the first date that such Table Game Retailer's

33-38

net terminal income for a full State fiscal year is less than such Table Game Retailer's net

33-39

terminal income for the prior State fiscal year, one percent (1%) of this Net Table Game Revenue

33-40

shall be allocated to the city of Newport for four (4) consecutive State fiscal years.

33-41

     SECTION 11. Section 44-23-5 of the General Laws in Chapter 44-23 entitled "Estate and

33-42

Transfer Taxes - Enforcement and Collection" is hereby amended to read as follows:

33-43

     44-23-5. Appraisal of estate. – (a) If any statement filed in accordance with the

33-44

provisions of this chapter is considered to be an erroneous or incomplete statement of the

33-45

property, real, tangible personal, intangible personal, or of any part of the property, of the

33-46

decedent, the tax administrator shall give notice to the executor, administrator, heir-at-law,

33-47

beneficiary, or trustee filing the statement, to appear before the tax administrator for the purpose

33-48

of examination of and concerning the statement, and concerning all matters appertaining to the

33-49

estate and the value of the estate of the decedent; and if the executor, administrator, heir-at-law,

33-50

beneficiary, or trustee fails to appear after due notice, or if after appearance and examination of

33-51

the executor, administrator, heir-at-law, beneficiary, or trustee the tax administrator still considers

33-52

the statement to be an erroneous or incomplete statement, or if the executor, administrator, heir-

33-53

at-law, beneficiary, or trustee refuses or neglects to answer the questions propounded in reference

33-54

to the statement, the tax administrator may appraise the estate. The tax administrator shall give

33-55

notice by mail to the executor, administrator, heir-at-law, beneficiary, or trustee and to all persons

33-56

known to have a claim or interest in the estate or property to be appraised, of the time and place

33-57

of the appraisal, and the tax administrator or his or her authorized agent shall at that time and

33-58

place appraise the estate or property at its full and fair cash value as prescribed in this section; and

33-59

for that purpose the tax administrator is authorized to issue subpoenas and to compel the

33-60

attendance of witnesses and to take the evidence of the witnesses under oath if necessary,

33-61

concerning the estate or property and the value of the estate, and the witnesses shall receive the

33-62

same fees as those now paid to witnesses subpoenaed to attend the superior court. From the

33-63

appraisal and other proof relating to the estate or property, the tax administrator determines the

33-64

full and fair cash value of the estate or property upon which all taxes imposed by chapter 22 of

33-65

this title are computed and the amount of taxes to which it is liable. If no appraisal is made as

33-66

provided in this section, the tax administrator may determine the value of the property upon

33-67

which all the taxes are computed and the amount of taxes to which it is liable.

34-68

     (b) Notwithstanding the provisions of subsection 44-23-5(a), all farmland, as such term is

34-69

defined in section 44-27-2, included as part of an estate for purposes of this section and utilized

34-70

by the executor, administrator, heir-at-law, beneficiary or trustee as farmland, shall be appraised

34-71

at its use value according to applicable federal and state law and not at its full and fair cash value.

34-72

     SECTION 12. Section 8-18-2 of the General Laws in Chapter 8-18 entitled "State and

34-73

Municipal Court Compact" is hereby amended to read as follows:

34-74

     8-18-2. Universal summons. -- All state agencies and municipalities which have law

34-75

enforcement powers shall be issued and authorized a form for summons and complaint to be used

34-76

for all violations specified in chapters 27, and 41.1 and 41.2 of title 31 and no other summons

34-77

shall be substituted except as provided by section 31-12-12. All fines, assessments, fees, and

34-78

other financial charge or any other responsibility not changed by the following shall be deemed

34-79

enforceable even when the summons is issued by a municipality and adjudicated by a municipal

34-80

court, or issued by state agencies or a municipality without a court and adjudicated by the traffic

34-81

tribunal. All summonses once issued must be recorded by the traffic tribunal prior to a hearing,

34-82

arraignment, or trial. If the summons is answered by payment without personal appearance

34-83

pursuant to section 31-41.1-2, it shall be recorded by the traffic tribunal upon return from the

34-84

financial institution.

34-85

     SECTION 13. Sections 31-41.2-4 and 31-41.2-5 of the General Laws in Chapter 31-41.2

34-86

entitled "Automated Traffic Violation Monitoring Systems" are hereby amended to read as

34-87

follows:

34-88

     31-41.2-4. Procedure -- Notice. -- (a) Except as expressly provided in this chapter, all

34-89

prosecutions based on evidence produced by an automated traffic violation detection system shall

34-90

follow the procedures established in chapter 41.1 of this title, chapter 8-18 of these general laws,

34-91

except the provision providing for payments to the state in sections 8-18-4 and 8-18-6, and the

34-92

rules promulgated by the chief magistrate of the traffic tribunal for the hearing of civil traffic

34-93

violations. Citations A summons may be issued by an officer solely based on evidence obtained

34-94

by use of an automated traffic violation detection system. All citations summons issued based on

34-95

evidence obtained from an automated traffic violation detection system shall be issued within

34-96

fourteen (14) days of the violation.

34-97

     (b) Notwithstanding any rule, regulation, or other provision of the general or public laws

34-98

to the contrary, no city or town shall be required to make payments to the state in implementing

34-99

any provision of this chapter until July 1, 2013.

34-100

     (b)(c) It shall be sufficient to commence a prosecution based on evidence obtained from

34-101

an automated traffic violation detection system that a copy of the citation summons and

34-102

supporting documentation be mailed to the address of the registered owner kept on file by the

35-1

registry of motor vehicles pursuant to section 31-3-34 of these general laws. For purposes of this

35-2

section, the date of issuance shall be the date of mailing.

35-3

      (c)(d) The officer issuing the citation summons shall certify under penalties of perjury

35-4

that the evidence obtained from the automated traffic violation detection system was sufficient to

35-5

demonstrate a violation of the motor vehicle code. Such certification shall be sufficient in all

35-6

prosecutions pursuant to this chapter to justify the entry of a default judgment upon sufficient

35-7

proof of actual notice in all cases where the citation summons is not answered within the time

35-8

period permitted.

35-9

      (d)(e) The citation summons shall contain all the information provided for on the

35-10

uniform summons as referred to in section 31-41.1-1 of the general laws and the rules of

35-11

procedure promulgated by the chief magistrate of the traffic tribunal subject to the approval of the

35-12

supreme court pursuant to section 8-6-2.

35-13

      (e)(f) In addition to the information in the uniform summons, the following information

35-14

shall be attached to the citation summons:

35-15

      (1) Copies of two (2) or more photographs, or microphotographs, or other recorded

35-16

images taken as proof of the violation; and

35-17

      (2) A signed statement by a trained law enforcement officer that, based on inspection of

35-18

recorded images, the motor vehicle was being operated in violation of section 31-13-4 of this

35-19

subtitle; and

35-20

      (3) A statement that recorded images are evidence of a violation of this chapter; and

35-21

      (4) A statement that the person who receives a summons under this chapter may either

35-22

pay the civil penalty in accordance with the provisions of section 31-41.1-3, or elect to stand trial

35-23

for the alleged violation.

35-24

     31-41.2-5. Hearings. -- Evidence from an automated traffic violation detection system

35-25

shall be considered substantive evidence in the prosecution of all civil traffic violations. Evidence

35-26

from an automated traffic violation detection system approved by the director of transportation

35-27

shall be admitted without further authentication and such evidence may be deemed sufficient to

35-28

sustain a civil traffic violation. In addition to any other defenses as set forth herein, any and all

35-29

defenses cognizable at law shall be available to the individual who receives the citation summons

35-30

commencing a prosecution under this chapter.

35-31

     SECTION 14. Section 44-62-3 of the General Laws in Chapter 44-62 entitled "Tax

35-32

Credits for Contributions to Scholarship Organizations" is hereby amended to read as follows:

35-33

     44-62-3. Application for the tax credit program. -- (a) Prior to the contribution, a

35-34

business entity shall apply in writing to the division of taxation. The application shall contain

36-1

such information and certification as the tax administrator deems necessary for the proper

36-2

administration of this chapter. A business entity shall be approved if it meets the criteria of this

36-3

chapter; the dollar amount of the applied for tax credit is no greater than one hundred thousand

36-4

dollars ($100,000) in any tax year, and the scholarship organization which is to receive the

36-5

contribution has qualified under section 44-62-2.

36-6

      (b) Approvals for contributions under this section shall be made available by the division

36-7

of taxation on a first-come-first-serve basis. The total aggregate amount of all tax credits

36-8

approved shall not exceed one million dollars ($1,000,000) one million five hundred thousand

36-9

dollars ($1,500,000) in a fiscal year.

36-10

      (c) The division of taxation shall notify the business entity in writing within thirty (30)

36-11

days of the receipt of application of the division's approval or rejection of the application.

36-12

      (d) Unless the contribution is part of a two-year plan, the actual cash contribution by the

36-13

business entity to a qualified scholarship organization must be made no later than one hundred

36-14

twenty (120) days following the approval of its application. If the contribution is part of a two-

36-15

year plan, the first year's contribution follows the general rule and the second year's contribution

36-16

must be made in the subsequent calendar year by the same date.

36-17

      (e) The contributions must be those charitable contributions made in cash as set forth in

36-18

the Internal Revenue Code.

36-19

     SECTION 15. Section 44-18-30B. of the General Laws in Chapter 44-18 entitled "Sales

36-20

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

36-21

     44-18-30B. Exemption from sales tax for sales by writers, composers, artists --

36-22

Findings. -- (a) The general assembly makes the following findings of facts:

36-23

      (1) The downtown area of the city of Providence has been characterized by blighted

36-24

areas, and dilapidated and abandoned structures;

36-25

      (2) As a result, the downtown area has been designated an economic development zone

36-26

in order to stop the deterioration and stimulate economic activity;

36-27

      (3) The capitol center area of the city of Providence has become an attractive location,

36-28

especially with the construction of the Providence Place Mall;

36-29

      (4) In order to promote, revitalize and redevelop the "Old Downtown" area of the city of

36-30

Providence it is necessary to provide tax exemptions to this area as it has been designated as an

36-31

economic development zone;

36-32

      (5) In order to promote, revitalize, and redevelop the "Downtown or other industrial or

36-33

manufacturing buildings" located in the City of Pawtucket, it is necessary to provide tax

36-34

exemptions to this area as it has been designated as an economic development zone;

37-1

      (6) The development of an active artistic community, including "artists in residence", in

37-2

this area would promote economic development, revitalization, tourism, employment

37-3

opportunities, and encourage business development by providing alternative commercial

37-4

enterprises while in Providence creating a link between the Old Downtown and the Capital Center

37-5

Area;

37-6

      (7) There is a separate artistic community in the town of Westerly which is important to

37-7

preserve, promote, and revitalize, and which is distinct from that in the city of Providence;

37-8

      (8) There is a separate artistic community in the city of Woonsocket which is important

37-9

to promote and revitalize and which is distinct from that in the cities of Providence and Pawtucket

37-10

and the town of Westerly;

37-11

      (9) There is a separate artistic community in the city of Warwick which is important to

37-12

preserve, promote, and revitalize and which is distinct from that in the cities of Providence,

37-13

Pawtucket, Woonsocket and the town of Westerly;

37-14

      (10) There are separate artistic communities in the city of Newport and in the town of

37-15

Tiverton which are important to promote and revitalize and which are distinct from those in the

37-16

cities of Providence, Pawtucket, Warwick and Woonsocket and the towns of Westerly and Little

37-17

Compton;

37-18

      (11) There is a separate artistic community in the town of Warren which is important to

37-19

promote and revitalize and which is distinct from that in the cities of Providence, Pawtucket,

37-20

Newport, Warwick and Woonsocket and the towns of Westerly and Tiverton.

37-21

     (1) The arts and culture are a significant asset for Rhode Island, one which generates

37-22

revenue through increased tourism and economic activity, creates jobs and economic

37-23

opportunities, revitalizes communities adding to quality of life and property values, and fosters

37-24

creativity, innovation, and entrepreneurship.

37-25

     (2) Since 1998 the establishment of arts districts where "one-of-a-kind limited

37-26

production" works of art may be sold exempt from state sales tax has resulted in an increased

37-27

presence for the arts in designated cities and towns, with benefits to those communities and to the

37-28

state.

37-29

     (3) Since the establishment of arts districts, many communities have sought legislation to

37-30

expand the program to their city or town.

37-31

     (4) There is value in expanding the arts district program statewide, providing incentives

37-32

for the sale and purchase of art. This is a unique opportunity for Rhode Island to shape history,

37-33

and gain an advantage over other states, by becoming the first and only state in the country to

37-34

declare a statewide sales tax exemption on art. This will strengthen Rhode Island's identity as an

38-1

arts-friendly destination and "State of the Arts".

38-2

      (b) (1) This section only applies to sales by writers, composers and artists residing in and

38-3

conducting a business within the state of Rhode Island. a section of the defined economic

38-4

development zone in the cities of Providence or Pawtucket, or the defined economic development

38-5

zone in the town of Westerly or the defined economic zone in the city of Woonsocket, or the

38-6

defined economic zone in the city of Warwick, or in those areas within the city of Newport, and

38-7

the town of Little Compton, which are zoned "general business," "waterfront business," or

38-8

"limited business" or have been designated by the city of Newport as part of the arts district, or in

38-9

those areas of the town of Warren which are zoned "waterfront district," "special district,"

38-10

"village business district," "manufacturing district," "business district" or "Warren historic

38-11

district," or in those areas of the town of Tiverton which are zoned "business commercial,"

38-12

"business waterfront" or "village commercial." For the purposes of this section, a "work" means

38-13

an original and creative work, whether written, composed or executed for "one-of-a-kind limited"

38-14

production and which falls into one of the following categories:

38-15

      (i) A book or other writing;

38-16

      (ii) A play or the performance of said play;

38-17

      (iii) A musical composition or the performance of said composition;

38-18

      (iv) A painting, print, photograph or other like picture;

38-19

      (v) A sculpture;

38-20

      (vi) Traditional and fine crafts;

38-21

      (vii) The creation of a film or the acting within the film;.

38-22

      (viii) The creation of a dance or the performance of the dance.

38-23

      (2) For the purposes of this section, a "work" includes any product generated as a result

38-24

of any of the above categories.

38-25

      (3) For the purposes of this section, a "work" does not apply to any piece or performance

38-26

created or executed for industry oriented, commercial or related production.

38-27

      (c) (1) This section applies to sales by any individual:

38-28

      (i) Who is a resident of and has a principal place of business situated in the state of

38-29

Rhode Island. section of the economic development zone designated as the arts and entertainment

38-30

district in the downtown area of the city of Providence or in the city of Pawtucket, or the defined

38-31

economic development zone in the town of Westerly or the defined economic zone in the city of

38-32

Woonsocket, or the defined economic zone in the city of Warwick, or who is a resident of and has

38-33

a principal place of business situated in those areas within the city of Newport or the town of

38-34

Little Compton, which are zoned "general business," "waterfront business," or "limited business,"

39-1

or have been designated by the city of Newport as part of the arts district, or who is a resident of

39-2

and has a principal place of business situated in those areas within the town of Warren which are

39-3

zoned "waterfront district," "special district," "village business district," "manufacturing district,"

39-4

"business district" or "Warren historic district," or who is a resident or has a principal place of

39-5

business situated in those areas within the town of Tiverton which are zoned "business

39-6

commercial," "business waterfront" or "village commercial." For the purposes of this section, the

39-7

Providence arts and entertainment district in Providence is defined as the area bounded by Pine

39-8

Street to the southeast, Dorrance Street to the northeast, Sabin Street to the northwest and Empire

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Street to the southwest. Said Providence arts and entertainment district also includes the area

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beginning at the point of intersection of Acorn Street and Harris Avenue, then turning east onto

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Atwells Avenue to Service Road 7, then turning southerly onto Service Road 7 to Westminster

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Street, then turning westerly onto Westminster Street, continuing until Bridgham, then turning

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south onto Bridgham to Cranston Street, then turning southwesterly onto Cranston Street, then

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continuing to Messer Street, then turning north onto Messer Street to Westminster Street, turning

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west onto Westminster Street to US Hwy 6 off ramp, then heading west on US Hwy 6 to Sheridan

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Street, then heading northeast on Sheridan Street to Aleppo Street, then turning southeast along

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Aleppo Street to Pelham Street, then heading northeast on Pelham Street to Manton Avenue, then

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continuing southeast on Manton Avenue until Delaine Street, then heading northeast on Delaine

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Street until Appleton Street, then continuing northwesterly on Appleton Street until Bowdoin

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Street, then heading north on Bowdoin Street until Barstow Street, then heading east on Barstow

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until Valley Street, then heading northeast on Valley Street to Hemlock Street, then turning

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southeast on Hemlock Street until Promenade Street, then heading east on Promenade Street to

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Acorn Street, then heading south on Acorn Street to the intersection of Acorn Street and Harris

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Avenue. The named streets are included in the Providence district; and in Pawtucket is defined as

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the area beginning at the point of intersection of Dexter Street and the Central Falls line, then east

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along the Central Falls line to the Blackstone River, then north along the city boundary on the

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Blackstone River to the Cumberland line, then west along the Pawtucket city boundary line to I-

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95, then south along I-95 to Pine Street, then north on Pine Street to AMTRAK Right of Way,

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then northwest along the AMTRAK Right of Way to Dexter Street, then north on Dexter Street to

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the Central Falls line. The named streets are included in the district. The Westerly arts and

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entertainment district is defined as assessor's plat 56, lots 1 through 24, lot 48, lots 50 through 62,

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and lots 71 through 82, and assessors plat 66, lots 22 through 26, and lots 29 through 36 the

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Woonsocket arts and entertainment district is defined as the area beginning at a point of land on

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the southwest bank of the Blackstone River abutting the bridge for the Providence & Worcester

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Railroad and proceeding northerly to a point at the intersection of Worrall Street, Clinton Street

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and Harry S. Truman Drive, then proceeding northwesterly along Worrall Street to its intersection

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with Social Street, then turning westerly on Social Street proceeding to its intersection with Main

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Street, Blackstone Street and North Main Street, then turning northwesterly and proceeding along

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Blackstone Street to its intersection with River Street, then turning northerly and proceeding

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along River Street to its intersection with the north/east bank of Blackstone River, then following

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the riverbank southerly to the bridge at Bernon Street and turning easterly crossing the Blackstone

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River via Bernon Street and proceeding to its intersection with Front Street, then turning

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northeasterly on Front Street and proceeding to its intersection with Hamlet Avenue, and to

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include the former courthouse on the southerly side of Front Street at its intersection with Hamlet

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Avenue, then turning easterly on Hamlet Avenue and proceeding to its intersection with Manville

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Road, then turning southeasterly on Manville Road and proceeding to its intersection with

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Davison Avenue, then turning northeasterly on Davison Avenue and proceeding to a point on the

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south/west bank of the Blackstone River, then turning northerly, following the southerly

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riverbank to the point of beginning. The abovementioned streets are included in the district. The

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Warwick arts district is defined as that area known as Pontiac Village, beginning on Route 5 at

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the Warwick/Cranston municipal boundary, then south to the intersection of Route 5 and the

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Pawtuxet River, then following the Pawtuxet River in an easterly and northerly direction to the

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municipal boundary in the vicinity of Knight Street, then from the intersection of Knight Street

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and the municipal boundary westerly along the Warwick/Cranston municipal boundary to the

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intersection of Route 5 and Greenwich Avenue. The above named streets are included in the

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district.

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      (ii) Who is determined by the tax administrator in consultation with the Rhode Island

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council on the arts, after consideration of any evidence he or she deems necessary or which is

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submitted to him or her by the individual, to have written, composed, or executed, either solely or

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jointly, a work or works which would fall into one of the categories listed in subsection (b)(1).

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      (2) This section also applies to sales by any other gallery located in the state of Rhode

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Island. arts and entertainment district described in subsection (c)(1)(i) as well as any other arts

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and entertainment district designated by the general assembly, as well as to sales by any other

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gallery located in those areas within the city of Newport, or the town of Little Compton, which

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are zoned "general business," "waterfront business," or "limited business" or have been

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designated by the city of Newport as part of the arts district, as well as to sales by any other

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gallery located in those areas within the town of Warren which are zoned "waterfront district,"

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"special district," "village business district," "manufacturing district," "business district" or

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"Warren historic district," as well as to sales by any other gallery located in those areas within the

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town of Tiverton which are zoned "business commercial," "business waterfront" or "village

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commercial."

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      (3) The tax administrator shall not make a determination unless:

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      (i) The individual(s) concerned duly make(s) an application to the tax administrator for

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the sales tax exemption which applies to the works defined in this section; and

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      (ii) The individual has complied and continues to comply with any and all requests made

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by the tax administrator.

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      (d) Any individual to whom this section applies and who makes an application to the tax

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administrator is entitled to a sales tax exemption for the sale of a work or works sold from the

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individual's business located in the economic development zone State of Rhode Island which

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would, apart from this section, be subject to the tax rate imposed by the state of Rhode Island.

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      (e) When an individual makes a request for the exemption, the tax administrator is

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entitled to all books, documents, or other evidence relating to the publication, production or

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creation of the works that may be deemed necessary by the tax administrator for the purposes of

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the exemption. The time period in which to provide this information is in the sole discretion of

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the tax administrator and specified in the notice.

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      (f) In addition to the information required in subsection (e), the tax administrator may

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require the individual(s) to submit an annual certified accounting of the numbers of works sold,

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the type of work sold, and the date of the sale. Failure to file this report may, in the sole discretion

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of the tax administrator, terminate the individual's eligibility for the exemption.

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      (g) Any person storing, using, or otherwise consuming in this state any work or works

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which is deemed to be exempt from the sales tax pursuant to this section is not liable for the use

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tax on the work or works.

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      (h) Notwithstanding the provisions of this section, any individual to whom this section

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may apply shall comply with all the administration, collection, and other provisions of chapters

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18 and 19 of this title.

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     (4) The Rhode Island council on the arts will oversee the transition to a statewide arts

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district program and work with the state tourism agencies, local chambers of commerce, and

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advertising/marketing agencies to promote this program, and will coordinate its efforts with the

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city and town governments. The Rhode Island council on the arts may request and shall receive

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from any department, division, board, bureau, commission, or agency of the state any data,

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assistance, and resources, including additional personnel, that will enable it to properly carry out

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this program.

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     (5) The tax administrator, in cooperation with the Rhode Island council on the arts, will

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gather data to assess the overall impact of the statewide arts district program, and issue an annual

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report, including, but not be limited to, the impact of the tax exemption on employment, tourism,

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sales and spending within the arts sector and adjacent businesses, and any other factors that

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describe the impact of the program.

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     SECTION 16. Section 1 of this article shall take effect on January 1, 2014, and shall

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apply to all assets placed in service on or after January 1, 2014. Section 2 of this article shall take

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effect upon passage and shall apply to tax years beginning on or after January 1, 2014. Section 4

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of this article shall take effect July 1, 2013. Section 8 of this article shall take effect on July 1,

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2013 and shall expire on March 31, 2015. Section 15 of this article shall take effect on December

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1, 2013 and shall expire on March 31, 2015. The remainder of this article shall take effect upon

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passage.