2024 -- S 2165 | |
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LC004204 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
____________ | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND | |
COMPUTATION | |
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Introduced By: Senators F. Lombardi, LaMountain, Tikoian, Britto, Ciccone, and Felag | |
Date Introduced: January 24, 2024 | |
Referred To: Senate Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and |
2 | Use Taxes — Liability and Computation" is hereby amended to read as follows: |
3 | 44-18-30. Gross receipts exempt from sales and use taxes. |
4 | There are exempted from the taxes imposed by this chapter the following gross receipts: |
5 | (1) Sales and uses beyond constitutional power of state. From the sale and from the storage, |
6 | use, or other consumption in this state of tangible personal property the gross receipts from the sale |
7 | of which, or the storage, use, or other consumption of which, this state is prohibited from taxing |
8 | under the Constitution of the United States or under the constitution of this state. |
9 | (2) Newspapers. |
10 | (i) From the sale and from the storage, use, or other consumption in this state of any |
11 | newspaper. |
12 | (ii) “Newspaper” means an unbound publication printed on newsprint that contains news, |
13 | editorial comment, opinions, features, advertising matter, and other matters of public interest. |
14 | (iii) “Newspaper” does not include a magazine, handbill, circular, flyer, sales catalog, or |
15 | similar item unless the item is printed for, and distributed as, a part of a newspaper. |
16 | (3) School meals. From the sale and from the storage, use, or other consumption in this |
17 | state of meals served by public, private, or parochial schools, school districts, colleges, universities, |
18 | student organizations, and parent-teacher associations to the students or teachers of a school, |
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1 | college, or university whether the meals are served by the educational institutions or by a food |
2 | service or management entity under contract to the educational institutions. |
3 | (4) Containers. |
4 | (i) From the sale and from the storage, use, or other consumption in this state of: |
5 | (A) Non-returnable containers, including boxes, paper bags, and wrapping materials that |
6 | are biodegradable and all bags and wrapping materials utilized in the medical and healing arts, |
7 | when sold without the contents to persons who place the contents in the container and sell the |
8 | contents with the container. |
9 | (B) Containers when sold with the contents if the sale price of the contents is not required |
10 | to be included in the measure of the taxes imposed by this chapter. |
11 | (C) Returnable containers when sold with the contents in connection with a retail sale of |
12 | the contents or when resold for refilling. |
13 | (D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage |
14 | producers who place the alcoholic beverages in the containers. |
15 | (ii) As used in this subdivision, the term “returnable containers” means containers of a kind |
16 | customarily returned by the buyer of the contents for reuse. All other containers are “non-returnable |
17 | containers.” |
18 | (5)(i) Charitable, educational, and religious organizations. From the sale to, as in defined |
19 | in this section, and from the storage, use, and other consumption in this state, or any other state of |
20 | the United States of America, of tangible personal property by hospitals not operated for a profit; |
21 | “educational institutions” as defined in subdivision (18) not operated for a profit; churches, |
22 | orphanages, and other institutions or organizations operated exclusively for religious or charitable |
23 | purposes; interest-free loan associations not operated for profit; nonprofit, organized sporting |
24 | leagues and associations and bands for boys and girls under the age of nineteen (19) years; the |
25 | following vocational student organizations that are state chapters of national vocational student |
26 | organizations: Distributive Education Clubs of America (DECA); Future Business Leaders of |
27 | America, Phi Beta Lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers |
28 | of America/Home Economics Related Occupations (FHA/HERD); Vocational Industrial Clubs of |
29 | America (VICA); organized nonprofit golden age and senior citizens clubs for men and women; |
30 | and parent-teacher associations; and from the sale, storage, use, and other consumption in this state, |
31 | of and by the Industrial Foundation of Burrillville, a Rhode Island domestic nonprofit corporation. |
32 | (ii) In the case of contracts entered into with the federal government, its agencies, or |
33 | instrumentalities, this state, or any other state of the United States of America, its agencies, any |
34 | city, town, district, or other political subdivision of the states; hospitals not operated for profit; |
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1 | educational institutions not operated for profit; churches, orphanages, and other institutions or |
2 | organizations operated exclusively for religious or charitable purposes, the contractor may purchase |
3 | such materials and supplies (materials and/or supplies are defined as those that are essential to the |
4 | project) that are to be utilized in the construction of the projects being performed under the contracts |
5 | without payment of the tax. |
6 | (iii) The contractor shall not charge any sales or use tax to any exempt agency, institution, |
7 | or organization but shall in that instance provide his or her suppliers with certificates in the form |
8 | as determined by the division of taxation showing the reason for exemption and the contractor’s |
9 | records must substantiate the claim for exemption by showing the disposition of all property so |
10 | purchased. If any property is then used for a nonexempt purpose, the contractor must pay the tax |
11 | on the property used. |
12 | (6) Gasoline. From the sale and from the storage, use, or other consumption in this state |
13 | of: (i) Gasoline and other products taxed under chapter 36 of title 31 and (ii) Fuels used for the |
14 | propulsion of airplanes. |
15 | (7) Purchase for manufacturing purposes. |
16 | (i) From the sale and from the storage, use, or other consumption in this state of computer |
17 | software, tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration, and |
18 | water, when the property or service is purchased for the purpose of being manufactured into a |
19 | finished product for resale and becomes an ingredient, component, or integral part of the |
20 | manufactured, compounded, processed, assembled, or prepared product, or if the property or |
21 | service is consumed in the process of manufacturing for resale computer software, tangible personal |
22 | property, electricity, natural gas, artificial gas, steam, refrigeration, or water. |
23 | (ii) “Consumed” means destroyed, used up, or worn out to the degree or extent that the |
24 | property cannot be repaired, reconditioned, or rendered fit for further manufacturing use. |
25 | (iii) “Consumed” includes mere obsolescence. |
26 | (iv) “Manufacturing” means and includes: manufacturing, compounding, processing, |
27 | assembling, preparing, or producing. |
28 | (v) “Process of manufacturing” means and includes all production operations performed in |
29 | the producing or processing room, shop, or plant, insofar as the operations are a part of and |
30 | connected with the manufacturing for resale of tangible personal property, electricity, natural gas, |
31 | artificial gas, steam, refrigeration, or water and all production operations performed insofar as the |
32 | operations are a part of and connected with the manufacturing for resale of computer software. |
33 | (vi) “Process of manufacturing” does not mean or include administration operations such |
34 | as general office operations, accounting, collection, or sales promotion, nor does it mean or include |
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1 | distribution operations that occur subsequent to production operations, such as handling, storing, |
2 | selling, and transporting the manufactured products, even though the administration and |
3 | distribution operations are performed by, or in connection with, a manufacturing business. |
4 | (8) State and political subdivisions. From the sale to, and from the storage, use, or other |
5 | consumption by, this state, any city, town, district, or other political subdivision of this state. Every |
6 | redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a subdivision of |
7 | the municipality where it is located. |
8 | (9) Food and food ingredients. From the sale and storage, use, or other consumption in this |
9 | state of food and food ingredients as defined in § 44-18-7.1(l). |
10 | For the purposes of this exemption “food and food ingredients” shall not include candy, |
11 | soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending |
12 | machines, or prepared food, as those terms are defined in § 44-18-7.1, unless the prepared food is: |
13 | (i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311, |
14 | except sub-sector 3118 (bakeries); |
15 | (ii) Sold in an unheated state by weight or volume as a single item; |
16 | (iii) Bakery items, including: bread, rolls, buns, biscuits, bagels, croissants, pastries, |
17 | donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and |
18 | is not sold with utensils provided by the seller, including: plates, knives, forks, spoons, |
19 | glasses, cups, napkins, or straws. |
20 | (10) Medicines, drugs, and durable medical equipment. From the sale and from the storage, |
21 | use, or other consumption in this state, of: |
22 | (i) “Drugs” as defined in § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and |
23 | insulin whether or not sold on prescription. For purposes of this exemption drugs shall not include |
24 | over-the-counter drugs and grooming and hygiene products as defined in § 44-18-7.1(h)(iii). |
25 | (ii) Durable medical equipment as defined in § 44-18-7.1(k) for home use only, including, |
26 | but not limited to: syringe infusers, ambulatory drug delivery pumps, hospital beds, convalescent |
27 | chairs, and chair lifts. Supplies used in connection with syringe infusers and ambulatory drug |
28 | delivery pumps that are sold on prescription to individuals to be used by them to dispense or |
29 | administer prescription drugs, and related ancillary dressings and supplies used to dispense or |
30 | administer prescription drugs, shall also be exempt from tax. |
31 | (11) Prosthetic devices and mobility enhancing equipment. From the sale and from the |
32 | storage, use, or other consumption in this state, of prosthetic devices as defined in § 44-18-7.1(t), |
33 | sold on prescription, including, but not limited to: artificial limbs, dentures, spectacles, eyeglasses, |
34 | and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on prescription; |
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1 | and mobility enhancing equipment as defined in § 44-18-7.1(p), including wheelchairs, crutches, |
2 | and canes. |
3 | (12) Coffins, caskets, urns, shrouds and burial garments. From the sale and from the |
4 | storage, use, or other consumption in this state of coffins, caskets, burial containers, urns, urn liners, |
5 | urn vaults, grave liners, grave vaults, burial tent setups, prayer cards, shrouds, and other burial |
6 | garments and other items sold or provided for use in conducting memorial, funeral, or burial |
7 | services that are ordinarily sold by a funeral director as part of the business of funeral directing. |
8 | (13) Motor vehicles sold to nonresidents. |
9 | (i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide nonresident |
10 | of this state who does not register the motor vehicle in this state, whether the sale or delivery of the |
11 | motor vehicle is made in this state or at the place of residence of the nonresident. A motor vehicle |
12 | sold to a bona fide nonresident whose state of residence does not allow a like exemption to its |
13 | nonresidents is not exempt from the tax imposed under § 44-18-20. In that event, the bona fide |
14 | nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that would be imposed |
15 | in his or her state of residence not to exceed the rate that would have been imposed under § 44-18- |
16 | 20. Notwithstanding any other provisions of law, a licensed motor vehicle dealer shall add and |
17 | collect the tax required under this subdivision and remit the tax to the tax administrator under the |
18 | provisions of chapters 18 and 19 of this title. When a Rhode Island licensed, motor vehicle dealer |
19 | is required to add and collect the sales and use tax on the sale of a motor vehicle to a bona fide |
20 | nonresident as provided in this section, the dealer in computing the tax takes into consideration the |
21 | law of the state of the nonresident as it relates to the trade-in of motor vehicles. |
22 | (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may |
23 | require any licensed motor vehicle dealer to keep records of sales to bona fide nonresidents as the |
24 | tax administrator deems reasonably necessary to substantiate the exemption provided in this |
25 | subdivision, including the affidavit of a licensed motor vehicle dealer that the purchaser of the |
26 | motor vehicle was the holder of, and had in his or her possession a valid out-of-state motor vehicle |
27 | registration or a valid out-of-state driver’s license. |
28 | (iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days of |
29 | the date of its sale to him or her is deemed to have purchased the motor vehicle for use, storage, or |
30 | other consumption in this state, and is subject to, and liable for, the use tax imposed under the |
31 | provisions of § 44-18-20. |
32 | (14) Sales in public buildings by blind people. From the sale and from the storage, use, or |
33 | other consumption in all public buildings in this state of all products or wares by any person |
34 | licensed under § 40-9-11.1. |
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1 | (15) Air and water pollution control facilities. From the sale, storage, use, or other |
2 | consumption in this state of tangible personal property or supplies acquired for incorporation into |
3 | or used and consumed in the operation of a facility, the primary purpose of which is to aid in the |
4 | control of the pollution or contamination of the waters or air of the state, as defined in chapter 12 |
5 | of title 46 and chapter 23 of title 23, respectively, and that has been certified as approved for that |
6 | purpose by the director of environmental management. The director of environmental management |
7 | may certify to a portion of the tangible personal property or supplies acquired for incorporation |
8 | into those facilities or used and consumed in the operation of those facilities to the extent that that |
9 | portion has as its primary purpose the control of the pollution or contamination of the waters or air |
10 | of this state. As used in this subdivision, “facility” means any land, facility, device, building, |
11 | machinery, or equipment. |
12 | (16) Camps. From the rental charged for living quarters, or sleeping, or housekeeping |
13 | accommodations at camps or retreat houses operated by religious, charitable, educational, or other |
14 | organizations and associations mentioned in subsection (5), or by privately owned and operated |
15 | summer camps for children. |
16 | (17) Certain institutions. From the rental charged for living or sleeping quarters in an |
17 | institution licensed by the state for the hospitalization, custodial, or nursing care of human beings. |
18 | (18) Educational institutions. From the rental charged by any educational institution for |
19 | living quarters, or sleeping, or housekeeping accommodations or other rooms or accommodations |
20 | to any student or teacher necessitated by attendance at an educational institution. “Educational |
21 | institution” as used in this section means an institution of learning not operated for profit that is |
22 | empowered to confer diplomas, educational, literary, or academic degrees; that has a regular |
23 | faculty, curriculum, and organized body of pupils or students in attendance throughout the usual |
24 | school year; that keeps and furnishes to students and others records required and accepted for |
25 | entrance to schools of secondary, collegiate, or graduate rank; and no part of the net earnings of |
26 | which inures to the benefit of any individual. |
27 | (19) Motor vehicle and adaptive equipment for persons with disabilities. |
28 | (i) From the sale of: (A) Special adaptations; (B) The component parts of the special |
29 | adaptations; or (C) A specially adapted motor vehicle; provided that the owner furnishes to the tax |
30 | administrator an affidavit of a licensed physician to the effect that the specially adapted motor |
31 | vehicle is necessary to transport a family member with a disability or where the vehicle has been |
32 | specially adapted to meet the specific needs of the person with a disability. This exemption applies |
33 | to not more than one motor vehicle owned and registered for personal, noncommercial use. |
34 | (ii) For the purpose of this subsection the term “special adaptations” includes, but is not |
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1 | limited to: wheelchair lifts, wheelchair carriers, wheelchair ramps, wheelchair securements, hand |
2 | controls, steering devices, extensions, relocations, and crossovers of operator controls, power- |
3 | assisted controls, raised tops or dropped floors, raised entry doors, or alternative signaling devices |
4 | to auditory signals. |
5 | (iii) From the sale of: (a) Special adaptations, (b) The component parts of the special |
6 | adaptations, for a “wheelchair accessible taxicab” as defined in § 39-14-1, and/or a “wheelchair |
7 | accessible public motor vehicle” as defined in § 39-14.1-1. |
8 | (iv) For the purpose of this subdivision the exemption for a “specially adapted motor |
9 | vehicle” means a use tax credit not to exceed the amount of use tax that would otherwise be due on |
10 | the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the special |
11 | adaptations, including installation. |
12 | (20) Heating fuels. From the sale and from the storage, use, or other consumption in this |
13 | state of every type of heating fuel. |
14 | (21) Electricity and gas. From the sale and from the storage, use, or other consumption in |
15 | this state of electricity and gas. |
16 | (22) Manufacturing machinery and equipment. |
17 | (i) From the sale and from the storage, use, or other consumption in this state of tools, dies, |
18 | molds, machinery, equipment (including replacement parts), and related items to the extent used in |
19 | an industrial plant in connection with the actual manufacture, conversion, or processing of tangible |
20 | personal property, or to the extent used in connection with the actual manufacture, conversion, or |
21 | processing of computer software as that term is utilized in industry numbers 7371, 7372, and 7373 |
22 | in the standard industrial classification manual prepared by the Technical Committee on Industrial |
23 | Classification, Office of Statistical Standards, Executive Office of the President, United States |
24 | Bureau of the Budget, as revised from time to time, to be sold, or that machinery and equipment |
25 | used in the furnishing of power to an industrial manufacturing plant. For the purposes of this |
26 | subdivision, “industrial plant” means a factory at a fixed location primarily engaged in the |
27 | manufacture, conversion, or processing of tangible personal property to be sold in the regular |
28 | course of business; |
29 | (ii) Machinery and equipment and related items are not deemed to be used in connection |
30 | with the actual manufacture, conversion, or processing of tangible personal property, or in |
31 | connection with the actual manufacture, conversion, or processing of computer software as that |
32 | term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification |
33 | manual prepared by the Technical Committee on Industrial Classification, Office of Statistical |
34 | Standards, Executive Office of the President, United States Bureau of the Budget, as revised from |
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1 | time to time, to be sold to the extent the property is used in administration or distribution operations; |
2 | (iii) Machinery and equipment and related items used in connection with the actual |
3 | manufacture, conversion, or processing of any computer software or any tangible personal property |
4 | that is not to be sold and that would be exempt under subdivision (7) or this subdivision if purchased |
5 | from a vendor or machinery and equipment and related items used during any manufacturing, |
6 | converting, or processing function is exempt under this subdivision even if that operation, function, |
7 | or purpose is not an integral or essential part of a continuous production flow or manufacturing |
8 | process; |
9 | (iv) Where a portion of a group of portable or mobile machinery is used in connection with |
10 | the actual manufacture, conversion, or processing of computer software or tangible personal |
11 | property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under |
12 | this subdivision even though the machinery in that group is used interchangeably and not otherwise |
13 | identifiable as to use. |
14 | (23) Trade-in value of motor vehicles. From the sale and from the storage, use, or other |
15 | consumption in this state of so much of the purchase price paid for a new or used automobile as is |
16 | allocated for a trade-in allowance on the automobile of the buyer given in trade to the seller, or of |
17 | the proceeds applicable only to the automobile as are received from the manufacturer of |
18 | automobiles for the repurchase of the automobile whether the repurchase was voluntary or not |
19 | towards the purchase of a new or used automobile by the buyer. For the purpose of this subdivision, |
20 | the word “automobile” means a private passenger automobile not used for hire and does not refer |
21 | to any other type of motor vehicle. |
22 | (24) Precious metal bullion. |
23 | (i) From the sale and from the storage, use, or other consumption in this state of precious |
24 | metal bullion, substantially equivalent to a transaction in securities or commodities. |
25 | (ii) For purposes of this subdivision, “precious metal bullion” means any elementary |
26 | precious metal that has been put through a process of smelting or refining, including, but not limited |
27 | to: gold, silver, platinum, rhodium, and chromium, and that is in a state or condition that its value |
28 | depends upon its content and not upon its form. |
29 | (iii) The term does not include fabricated precious metal that has been processed or |
30 | manufactured for some one or more specific and customary industrial, professional, or artistic uses. |
31 | (25) Commercial vessels. From sales made to a commercial ship, barge, or other vessel of |
32 | fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from the |
33 | repair, alteration, or conversion of the vessels, and from the sale of property purchased for the use |
34 | of the vessels including provisions, supplies, and material for the maintenance and/or repair of the |
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1 | vessels. |
2 | (26) Commercial fishing vessels. From the sale and from the storage, use, or other |
3 | consumption in this state of vessels and other watercraft that are in excess of five (5) net tons and |
4 | that are used exclusively for “commercial fishing,” as defined in this subdivision, and from the |
5 | repair, alteration, or conversion of those vessels and other watercraft, and from the sale of property |
6 | purchased for the use of those vessels and other watercraft including provisions, supplies, and |
7 | material for the maintenance and/or repair of the vessels and other watercraft and the boats nets, |
8 | cables, tackle, and other fishing equipment appurtenant to or used in connection with the |
9 | commercial fishing of the vessels and other watercraft. “Commercial fishing” means taking or |
10 | attempting to take any fish, shellfish, crustacea, or bait species with the intent of disposing of it for |
11 | profit or by sale, barter, trade, or in commercial channels. The term does not include subsistence |
12 | fishing, i.e., the taking for personal use and not for sale or barter; or sport fishing; but shall include |
13 | vessels and other watercraft with a Rhode Island party and charter boat license issued by the |
14 | department of environmental management pursuant to § 20-2-27.1 that meet the following criteria: |
15 | (i) The operator must have a current United States Coast Guard (U.S.C.G.) license to carry |
16 | passengers for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii) |
17 | U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a Rhode Island boat |
18 | registration to prove Rhode Island home port status; and (iv) The vessel must be used as a |
19 | commercial passenger carrying fishing vessel to carry passengers for fishing. The vessel must be |
20 | able to demonstrate that at least fifty percent (50%) of its annual gross income derives from charters |
21 | or provides documentation of a minimum of one hundred (100) charter trips annually; and (v) The |
22 | vessel must have a valid Rhode Island party and charter boat license. The tax administrator shall |
23 | implement the provisions of this subdivision by promulgating rules and regulations relating thereto. |
24 | (27) Clothing and footwear. From the sales of articles of clothing, including footwear, |
25 | intended to be worn or carried on or about the human body for sales prior to October 1, 2012. |
26 | Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including |
27 | footwear, intended to be worn or carried on or about the human body up to two hundred and fifty |
28 | dollars ($250) of the sales price per item. For the purposes of this section, “clothing or footwear” |
29 | does not include clothing accessories or equipment or special clothing or footwear primarily |
30 | designed for athletic activity or protective use as these terms are defined in § 44-18-7.1(f). In |
31 | recognition of the work being performed by the streamlined sales and use tax governing board, |
32 | upon passage of any federal law that authorizes states to require remote sellers to collect and remit |
33 | sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. The |
34 | unlimited exemption on sales of clothing and footwear shall take effect on the date that the state |
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1 | requires remote sellers to collect and remit sales and use taxes. |
2 | (28) Water for residential use. From the sale and from the storage, use, or other |
3 | consumption in this state of water furnished for domestic use by occupants of residential premises. |
4 | (29) Bibles. [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see Notes |
5 | to Decisions.] From the sale and from the storage, use, or other consumption in the state of any |
6 | canonized scriptures of any tax-exempt nonprofit religious organization including, but not limited |
7 | to, the Old Testament and the New Testament versions. |
8 | (30) Boats. |
9 | (i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not |
10 | register the boat or vessel in this state or document the boat or vessel with the United States |
11 | government at a home port within the state, whether the sale or delivery of the boat or vessel is |
12 | made in this state or elsewhere; provided, that the nonresident transports the boat within thirty (30) |
13 | days after delivery by the seller outside the state for use thereafter solely outside the state. |
14 | (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may |
15 | require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents as the |
16 | tax administrator deems reasonably necessary to substantiate the exemption provided in this |
17 | subdivision, including the affidavit of the seller that the buyer represented himself or herself to be |
18 | a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this state. |
19 | (31) Youth activities equipment. From the sale, storage, use, or other consumption in this |
20 | state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island |
21 | eleemosynary organizations, for the purposes of youth activities that the organization is formed to |
22 | sponsor and support; and by accredited elementary and secondary schools for the purposes of the |
23 | schools or of organized activities of the enrolled students. |
24 | (32) Farm equipment. From the sale and from the storage or use of machinery and |
25 | equipment used directly for commercial farming and agricultural production; including, but not |
26 | limited to: tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors, |
27 | balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment, |
28 | greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and |
29 | other farming equipment, including replacement parts appurtenant to or used in connection with |
30 | commercial farming and tools and supplies used in the repair and maintenance of farming |
31 | equipment. “Commercial farming” means the keeping or boarding of five (5) or more horses or the |
32 | production within this state of agricultural products, including, but not limited to, field or orchard |
33 | crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or production |
34 | provides at least two thousand five hundred dollars ($2,500) in annual gross sales to the operator, |
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1 | whether an individual, a group, a partnership, or a corporation for exemptions issued prior to July |
2 | 1, 2002. For exemptions issued or renewed after July 1, 2002, there shall be two (2) levels. Level I |
3 | shall be based on proof of annual, gross sales from commercial farming of at least twenty-five |
4 | hundred dollars ($2,500) and shall be valid for purchases subject to the exemption provided in this |
5 | subdivision except for motor vehicles with an excise tax value of five thousand dollars ($5,000) or |
6 | greater. Level II shall be based on proof of annual gross sales from commercial farming of at least |
7 | ten thousand dollars ($10,000) or greater and shall be valid for purchases subject to the exemption |
8 | provided in this subdivision including motor vehicles with an excise tax value of five thousand |
9 | dollars ($5,000) or greater. For the initial issuance of the exemptions, proof of the requisite amount |
10 | of annual gross sales from commercial farming shall be required for the prior year; for any renewal |
11 | of an exemption granted in accordance with this subdivision at either level I or level II, proof of |
12 | gross annual sales from commercial farming at the requisite amount shall be required for each of |
13 | the prior two (2) years. Certificates of exemption issued or renewed after July 1, 2002, shall clearly |
14 | indicate the level of the exemption and be valid for four (4) years after the date of issue. This |
15 | exemption applies even if the same equipment is used for ancillary uses, or is temporarily used for |
16 | a non-farming or a non-agricultural purpose, but shall not apply to motor vehicles acquired after |
17 | July 1, 2002, unless the vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for |
18 | registration displaying farm plates as provided for in § 31-3-31. |
19 | (33) Compressed air. From the sale and from the storage, use, or other consumption in the |
20 | state of compressed air. |
21 | (34) Flags. From the sale and from the storage, consumption, or other use in this state of |
22 | United States, Rhode Island or POW-MIA flags. |
23 | (35) Motor vehicle and adaptive equipment to certain veterans. From the sale of a motor |
24 | vehicle and adaptive equipment to and for the use of a veteran with a service-connected loss of or |
25 | the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee, whether service |
26 | connected or not. The motor vehicle must be purchased by and especially equipped for use by the |
27 | qualifying veteran. Certificate of exemption or refunds of taxes paid is granted under rules or |
28 | regulations that the tax administrator may prescribe. |
29 | (36) Textbooks. From the sale and from the storage, use, or other consumption in this state |
30 | of textbooks by an “educational institution,” as defined in subsection (18) of this section, and any |
31 | educational institution within the purview of § 16-63-9(4), and used textbooks by any purveyor. |
32 | (37) Tangible personal property and supplies used in on-site hazardous waste recycling, |
33 | reuse, or treatment. From the sale, storage, use, or other consumption in this state of tangible |
34 | personal property or supplies used or consumed in the operation of equipment, the exclusive |
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1 | function of which is the recycling, reuse, or recovery of materials (other than precious metals, as |
2 | defined in subdivision (24)(ii) of this section) from the treatment of “hazardous wastes,” as defined |
3 | in § 23-19.1-4, where the “hazardous wastes” are generated in Rhode Island solely by the same |
4 | taxpayer and where the personal property is located at, in, or adjacent to a generating facility of the |
5 | taxpayer in Rhode Island. The taxpayer shall procure an order from the director of the department |
6 | of environmental management certifying that the equipment and/or supplies as used or consumed, |
7 | qualify for the exemption under this subdivision. If any information relating to secret processes or |
8 | methods of manufacture, production, or treatment is disclosed to the department of environmental |
9 | management only to procure an order, and is a “trade secret” as defined in § 28-21-10(b), it is not |
10 | open to public inspection or publicly disclosed unless disclosure is required under chapter 21 of |
11 | title 28 or chapter 24.4 of title 23. |
12 | (38) Promotional and product literature of boat manufacturers. From the sale and from the |
13 | storage, use, or other consumption of promotional and product literature of boat manufacturers |
14 | shipped to points outside of Rhode Island that either: (i) Accompany the product that is sold; (ii) |
15 | Are shipped in bulk to out-of-state dealers for use in the sale of the product; or (iii) Are mailed to |
16 | customers at no charge. |
17 | (39) Food items paid for by food stamps. From the sale and from the storage, use, or other |
18 | consumption in this state of eligible food items payment for which is properly made to the retailer |
19 | in the form of U.S. government food stamps issued in accordance with the Food Stamp Act of 1977, |
20 | 7 U.S.C. § 2011 et seq. |
21 | (40) Transportation charges. From the sale or hiring of motor carriers as defined in § 39- |
22 | 12-2(12) to haul goods, when the contract or hiring cost is charged by a motor freight tariff filed |
23 | with the Rhode Island public utilities commission on the number of miles driven or by the number |
24 | of hours spent on the job. |
25 | (41) Trade-in value of boats. From the sale and from the storage, use, or other consumption |
26 | in this state of so much of the purchase price paid for a new or used boat as is allocated for a trade- |
27 | in allowance on the boat of the buyer given in trade to the seller or of the proceeds applicable only |
28 | to the boat as are received from an insurance claim as a result of a stolen or damaged boat, towards |
29 | the purchase of a new or used boat by the buyer. |
30 | (42) Equipment used for research and development. From the sale and from the storage, |
31 | use, or other consumption of equipment to the extent used for research and development purposes |
32 | by a qualifying firm. For the purposes of this subsection, “qualifying firm” means a business for |
33 | which the use of research and development equipment is an integral part of its operation and |
34 | “equipment” means scientific equipment, computers, software, and related items. |
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1 | (43) Coins. From the sale and from the other consumption in this state of coins having |
2 | numismatic or investment value. |
3 | (44) Farm structure construction materials. Lumber, hardware, and other materials used in |
4 | the new construction of farm structures, including production facilities such as, but not limited to: |
5 | farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying houses, |
6 | fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing rooms, |
7 | machinery storage, seasonal farm worker housing, certified farm markets, bunker and trench silos, |
8 | feed storage sheds, and any other structures used in connection with commercial farming. |
9 | (45) Telecommunications carrier access service. Carrier access service or |
10 | telecommunications service when purchased by a telecommunications company from another |
11 | telecommunications company to facilitate the provision of telecommunications service. |
12 | (46) Boats or vessels brought into the state exclusively for winter storage, maintenance, |
13 | repair, or sale. Notwithstanding the provisions of §§ 44-18-10, 44-18-11 and 44-18-20, the tax |
14 | imposed by § 44-18-20 is not applicable for the period commencing on the first day of October in |
15 | any year up to and including the 30th day of April next succeeding with respect to the use of any |
16 | boat or vessel within this state exclusively for purposes of: (i) Delivery of the vessel to a facility in |
17 | this state for storage, including dry storage and storage in water by means of apparatus preventing |
18 | ice damage to the hull, maintenance, or repair; (ii) The actual process of storage, maintenance, or |
19 | repair of the boat or vessel; or (iii) Storage for the purpose of selling the boat or vessel. |
20 | (47) Jewelry display product. From the sale and from the storage, use, or other |
21 | consumption in this state of tangible personal property used to display any jewelry product; |
22 | provided that title to the jewelry display product is transferred by the jewelry manufacturer or seller |
23 | and that the jewelry display product is shipped out of state for use solely outside the state and is not |
24 | returned to the jewelry manufacturer or seller. |
25 | (48) Boats or vessels generally. Notwithstanding the provisions of this chapter, the tax |
26 | imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage, |
27 | use, or other consumption in this state of any new or used boat. The exemption provided for in this |
28 | subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal ten |
29 | percent (10%) surcharge on luxury boats is repealed. |
30 | (49) Banks and regulated investment companies interstate toll-free calls. Notwithstanding |
31 | the provisions of this chapter, the tax imposed by this chapter does not apply to the furnishing of |
32 | interstate and international, toll-free terminating telecommunication service that is used directly |
33 | and exclusively by or for the benefit of an eligible company as defined in this subdivision; provided |
34 | that an eligible company employs on average during the calendar year no less than five hundred |
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1 | (500) “full-time equivalent employees” as that term is defined in § 42-64.5-2. For purposes of this |
2 | section, an “eligible company” means a “regulated investment company” as that term is defined in |
3 | the Internal Revenue Code of 1986, 26 U.S.C. § 851, or a corporation to the extent the service is |
4 | provided, directly or indirectly, to or on behalf of a regulated investment company, an employee |
5 | benefit plan, a retirement plan or a pension plan, or a state-chartered bank. |
6 | (50) Mobile and manufactured homes generally. From the sale and from the storage, use, |
7 | or other consumption in this state of mobile and/or manufactured homes as defined and subject to |
8 | taxation pursuant to the provisions of chapter 44 of title 31. |
9 | (51) Manufacturing business reconstruction materials. |
10 | (i) From the sale and from the storage, use, or other consumption in this state of lumber, |
11 | hardware, and other building materials used in the reconstruction of a manufacturing business |
12 | facility that suffers a disaster, as defined in this subdivision, in this state. “Disaster” means any |
13 | occurrence, natural or otherwise, that results in the destruction of sixty percent (60%) or more of |
14 | an operating manufacturing business facility within this state. “Disaster” does not include any |
15 | damage resulting from the willful act of the owner of the manufacturing business facility. |
16 | (ii) Manufacturing business facility includes, but is not limited to, the structures housing |
17 | the production and administrative facilities. |
18 | (iii) In the event a manufacturer has more than one manufacturing site in this state, the sixty |
19 | percent (60%) provision applies to the damages suffered at that one site. |
20 | (iv) To the extent that the costs of the reconstruction materials are reimbursed by insurance, |
21 | this exemption does not apply. |
22 | (52) Tangible personal property and supplies used in the processing or preparation of floral |
23 | products and floral arrangements. From the sale, storage, use, or other consumption in this state of |
24 | tangible personal property or supplies purchased by florists, garden centers, or other like producers |
25 | or vendors of flowers, plants, floral products, and natural and artificial floral arrangements that are |
26 | ultimately sold with flowers, plants, floral products, and natural and artificial floral arrangements |
27 | or are otherwise used in the decoration, fabrication, creation, processing, or preparation of flowers, |
28 | plants, floral products, or natural and artificial floral arrangements, including descriptive labels, |
29 | stickers, and cards affixed to the flower, plant, floral product, or arrangement, artificial flowers, |
30 | spray materials, floral paint and tint, plant shine, flower food, insecticide, and fertilizers. |
31 | (53) Horse food products. From the sale and from the storage, use, or other consumption |
32 | in this state of horse food products purchased by a person engaged in the business of the boarding |
33 | of horses. |
34 | (54) Non-motorized recreational vehicles sold to nonresidents. |
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1 | (i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to |
2 | a bona fide nonresident of this state who does not register the non-motorized recreational vehicle |
3 | in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this |
4 | state or at the place of residence of the nonresident; provided that a non-motorized recreational |
5 | vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption to |
6 | its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in |
7 | that event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate |
8 | that would be imposed in his or her state of residence not to exceed the rate that would have been |
9 | imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed, non-motorized |
10 | recreational vehicle dealer shall add and collect the tax required under this subdivision and remit |
11 | the tax to the tax administrator under the provisions of chapters 18 and 19 of this title. Provided, |
12 | that when a Rhode Island licensed, non-motorized recreational vehicle dealer is required to add and |
13 | collect the sales and use tax on the sale of a non-motorized recreational vehicle to a bona fide |
14 | nonresident as provided in this section, the dealer in computing the tax takes into consideration the |
15 | law of the state of the nonresident as it relates to the trade-in of motor vehicles. |
16 | (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may |
17 | require any licensed, non-motorized recreational vehicle dealer to keep records of sales to bona fide |
18 | nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption |
19 | provided in this subdivision, including the affidavit of a licensed, non-motorized recreational |
20 | vehicle dealer that the purchaser of the non-motorized recreational vehicle was the holder of, and |
21 | had in his or her possession a valid out-of-state non-motorized recreational vehicle registration or |
22 | a valid out-of-state driver’s license. |
23 | (iii) Any nonresident who registers a non-motorized recreational vehicle in this state within |
24 | ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-motorized |
25 | recreational vehicle for use, storage, or other consumption in this state, and is subject to, and liable |
26 | for, the use tax imposed under the provisions of § 44-18-20. |
27 | (iv) “Non-motorized recreational vehicle” means any portable dwelling designed and |
28 | constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use |
29 | that is eligible to be registered for highway use, including, but not limited to, “pick-up coaches” or |
30 | “pick-up campers,” “travel trailers,” and “tent trailers” as those terms are defined in chapter 1 of |
31 | title 31. |
32 | (55) Sprinkler and fire alarm systems in existing buildings. From the sale in this state of |
33 | sprinkler and fire alarm systems; emergency lighting and alarm systems; and the materials |
34 | necessary and attendant to the installation of those systems that are required in buildings and |
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1 | occupancies existing therein in July 2003 in order to comply with any additional requirements for |
2 | such buildings arising directly from the enactment of the Comprehensive Fire Safety Act of 2003 |
3 | and that are not required by any other provision of law or ordinance or regulation adopted pursuant |
4 | to that act. The exemption provided in this subdivision shall expire on December 31, 2008. |
5 | (56) Aircraft. Notwithstanding the provisions of this chapter, the tax imposed by §§ 44- |
6 | 18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or other |
7 | consumption in this state of any new or used aircraft or aircraft parts. |
8 | (57) Renewable energy products. Notwithstanding any other provisions of Rhode Island |
9 | general laws, the following products shall also be exempt from sales tax: solar photovoltaic |
10 | modules or panels, or any module or panel that generates electricity from light; solar thermal |
11 | collectors, including, but not limited to, those manufactured with flat glass plates, extruded plastic, |
12 | sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-water and |
13 | water-to-air type pumps; wind turbines; towers used to mount wind turbines if specified by or sold |
14 | by a wind turbine manufacturer; DC to AC inverters that interconnect with utility power lines; and |
15 | manufactured mounting racks and ballast pans for solar collector, module, or panel installation. Not |
16 | to include materials that could be fabricated into such racks; monitoring and control equipment, if |
17 | specified or supplied by a manufacturer of solar thermal, solar photovoltaic, geothermal, or wind |
18 | energy systems or if required by law or regulation for such systems but not to include pumps, fans |
19 | or plumbing or electrical fixtures unless shipped from the manufacturer affixed to, or an integral |
20 | part of, another item specified on this list; and solar storage tanks that are part of a solar domestic |
21 | hot water system or a solar space heating system. If the tank comes with an external heat exchanger |
22 | it shall also be tax exempt, but a standard hot water tank is not exempt from state sales tax. |
23 | (58) Returned property. The amount charged for property returned by customers upon |
24 | rescission of the contract of sale when the entire amount exclusive of handling charges paid for the |
25 | property is refunded in either cash or credit, and where the property is returned within one hundred |
26 | twenty (120) days from the date of delivery. |
27 | (59) Dietary supplements. From the sale and from the storage, use, or other consumption |
28 | of dietary supplements as defined in § 44-18-7.1(l)(v), sold on prescriptions. |
29 | (60) Blood. From the sale and from the storage, use, or other consumption of human blood. |
30 | (61) Agricultural products for human consumption. From the sale and from the storage, |
31 | use, or other consumption of livestock and poultry of the kinds of products that ordinarily constitute |
32 | food for human consumption and of livestock of the kind the products of which ordinarily constitute |
33 | fibers for human use. |
34 | (62) Diesel emission control technology. From the sale and use of diesel retrofit |
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1 | technology that is required by § 31-47.3-4. |
2 | (63) Feed for certain animals used in commercial farming. From the sale of feed for |
3 | animals as described in subsection (61) of this section. |
4 | (64) Alcoholic beverages. From the sale and storage, use, or other consumption in this |
5 | state by a Class A licensee of alcoholic beverages, as defined in § 44-18-7.1, excluding beer and |
6 | malt beverages; provided, further, notwithstanding § 6-13-1 or any other general or public law to |
7 | the contrary, alcoholic beverages, as defined in § 44-18-7.1, shall not be subject to minimum |
8 | markup. |
9 | (65) Seeds and plants used to grow food and food ingredients. From the sale, storage, use, |
10 | or other consumption in this state of seeds and plants used to grow food and food ingredients as |
11 | defined in § 44-18-7.1(l)(i). “Seeds and plants used to grow food and food ingredients” shall not |
12 | include marijuana seeds or plants. |
13 | (66) Feminine hygiene products. From the sale and from the storage, use, or other |
14 | consumption of tampons, panty liners, menstrual cups, sanitary napkins, and other similar products |
15 | the principal use of which is feminine hygiene in connection with the menstrual cycle. |
16 | (67) “Breast pump collection and storage supplies” means items of tangible personal |
17 | property used in conjunction with a breast pump to collect milk expressed from a human breast and |
18 | to store collected milk until it is ready for consumption. “Breast pump collection and storage |
19 | supplies” include, but are not limited to, breast shields and breast shield connectors; breast pump |
20 | tubes and tubing adaptors; breast pump valves and membranes; backflow protectors and backflow |
21 | protector adaptors; bottles and bottle caps specific to the operation of the breast pump; breast milk |
22 | storage bags; and related items sold as part of a breast pump kit pre-packaged by the breast pump |
23 | manufacturer. “Breast pump collection and storage supplies” does not include: bottles and bottle |
24 | caps not specific to the operation of the breast pump; breast pump travel bags and other similar |
25 | carrying accessories, including ice packs, labels, and other similar products, unless sold as part of |
26 | a breast pump kit pre-packed by the breast pump manufacturer; breast pump cleaning supplies, |
27 | unless sold as part of a breast pump kit pre-packaged by the breast pump manufacturer; nursing |
28 | bras, bra pads, breast shells, and other similar products; and creams, ointments, and other similar |
29 | products that relieve breastfeeding-related symptoms or conditions of the breasts or nipples. |
30 | (68) Trade-in value of motorcycles. From the sale and from the storage, use, or other |
31 | consumption in this state of so much of the purchase price paid for a new or used motorcycle as is |
32 | allocated for a trade-in allowance on the motorcycle of the buyer given in trade to the seller, or of |
33 | the proceeds applicable only to the motorcycle as are received from the manufacturer of |
34 | motorcycles for the repurchase of the motorcycle whether the repurchase was voluntary or not |
| LC004204 - Page 17 of 19 |
1 | towards the purchase of a new or used motorcycle by the buyer. For the purpose of this subsection, |
2 | the word “motorcycle” means a motorcycle not used for hire and does not refer to any other type |
3 | of motor vehicle. |
4 | SECTION 2. This act shall take effect upon passage. |
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| LC004204 - Page 18 of 19 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND | |
COMPUTATION | |
*** | |
1 | This act would exempt from the sales and use tax any items sold or provided for use in |
2 | conducting memorial, funeral, or burial services. |
3 | This act would take effect upon passage. |
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