ARTICLE 5

RELATING TO TAXES AND FEES

     SECTION 1. Sections 28-43-8.1 and 28-43-29 of the General Laws in Chapter 28-43

entitled “Employment Security – Contributions” are hereby amended to read as follows:

     28-43-8.1. Time and manner of payment of employer contributions.

     Contributions and assessments required under this chapter for each year shall be paid by

each employer in the manner and at the times that the director may prescribe.

     28-43-29. Liability for contributions and election of reimbursement. 

      (a) Any nonprofit organization or governmental entity that is or becomes subject

to chapters 42 – 44 of this title on or after January 1, 1978, shall pay contributions under the

provisions of chapters 42 – 44 of this title, unless it elects, in accordance with this section, to pay

to the director for the employment security fund the full amount of regular benefits paid plus the

full amount of the extended benefits paid, less any federal payments to the state under § 204 of the

Federal-State Extended Unemployment Compensation Act of 1970, that are attributable to service

in the employ of that nonprofit organization or governmental entity to individuals for weeks of

unemployment that begin during the effective period of that election; provided, that for weeks of

unemployment beginning on or after January 1, 1979, governmental entities that have elected

reimbursement shall be responsible for reimbursing the employment security fund for the full

amount of extended benefits paid that is attributable to service in the employ of those entities.

     (b) Any nonprofit organization or governmental entity that is or becomes subject to

chapters 42 – 44 of this title on January 1, 1978, may elect to become liable for payments in lieu of

contributions for a period of not less than the 1978 tax year and the next ensuing tax year provided

it files with the director a written notice of its election within the thirty-day (30) period immediately

following January 1, 1978.

     (c) Any nonprofit organization or governmental entity that becomes subject to chapters 42

– 44 of this title after January 1, 1978, may elect to become liable for payments in lieu of

contributions for a period of not less than the balance of the tax year beginning with the date on

which that subjectivity begins and the next ensuing tax year by filing a written notice of its election

with the director not later than thirty (30) days immediately following the date of the determination

of that subjectivity.

     (d) Any nonprofit organization or governmental entity that makes an election in accordance

with subsection (b) or (c) of this section will continue to be liable for payments in lieu of

contributions until it files with the director a written notice terminating its election not later than

thirty (30) days prior to the beginning of the tax year for which that termination shall first be

effective. The nonprofit organization or governmental entity shall thereafter be liable for the

payment of contributions for not less than that tax year and the next ensuing tax year before another

election can be exercised.

     (e) Any nonprofit organization or governmental entity that has been paying contributions

under chapters 42 – 44 of this title for a period subsequent to January 1, 1978, may change to a

reimbursable basis by filing with the director not later than thirty (30) days prior to the beginning

of any tax year a written notice of election to become liable for payments in lieu of contributions.

That election shall not be terminable by the organization or entity for that tax year and for the next

ensuing tax year.

     (f) The director may for good cause extend the period within which a notice of election, or

a notice of termination, must be filed and may permit an election to be retroactive but not any earlier

than with respect to benefits paid on or after January 1, 1978.

     (g) The director, in accordance with any procedures that he or she may prescribe, shall

notify each nonprofit organization or governmental entity of any determination that may be made

of its status as an employer and of the effective date of any election that it makes and of any

termination of that election. Any determination shall be conclusive on the organization or the entity

unless within fifteen (15) days after notice of the determination has been mailed or otherwise

delivered to it, an appeal is made to the board of review in writing in accordance with the provisions

of § 28-43-14.

     (h) Notwithstanding the foregoing, any nonprofit organization, not including governmental

entities, employing not less than five hundred (500) employees shall be subject to the job

development assessment as prescribed in § 28-43-8.5. The director is authorized to promulgate

regulations to administer this assessment.

     SECTION 2. Section 31-2-27 of the General Laws in Chapter 31-2 entitled “Division of

Motor Vehicles” is hereby amended to read as follows:

     31-2-27. Technology surcharge fee.

     (a) The division of motor vehicles shall collect a technology surcharge fee of two dollars

and fifty cents ($2.50) three dollars and fifty cents ($3.50) per transaction for every division of

motor vehicles’ fee transaction, except as otherwise provided by law and provided no surcharge

fee is assessed on motor vehicle inspection transactions conducted pursuant to § 31-38-4. One

dollar and fifty cents ($1.50) of each two dollars and fifty cents ($2.50) collected pursuant to this

section shall be deposited into the information technology investment fund established pursuant to

§ 42-11-2.5 and shall be used for project-related payments and/or ongoing maintenance of and

enhancements to the division of motor vehicles’ computer system and to reimburse the information

technology investment fund for advances made to cover project-related payments. The remaining

one dollar ($1.00) All technology surcharge fees collected pursuant to this section shall be

deposited into a restricted-receipt account managed by the division of motor vehicles and restricted

to the project-related payments and/or ongoing maintenance of and enhancements to the division

of motor vehicles’ computer system.

     (b) [Deleted by P.L. 2019, ch. 88, art. 7, § 1].

     (c) Beginning July 1, 2022, the full two dollars and fifty cents ($2.50) shall be deposited

into the division of motor vehicles restricted account and restricted to the project-related payments

and/or ongoing maintenance of and enhancements to the division of motor vehicles’ computer

system.

     SECTION 3. Section 31-6-1 of the General Laws in Chapter 31-6 entitled “Registration

Fees” is hereby amended to read as follows:

     31-6-1. Amount of registration and miscellaneous fees.

     The following registration fees shall be paid to the division of motor vehicles for the

registration of motor vehicles, trailers, semi-trailers, and school buses subject to registration for

each year of registration:

     (1) For the registration of every automobile, when equipped with pneumatic tires, the gross

weight of which is not more than four thousand pounds (4,000 lbs.): thirty dollars ($30.00).

     (2) For the registration of every motor truck or tractor when equipped with pneumatic tires,

the gross weight of which is not more than four thousand pounds (4,000 lbs.): thirty-four dollars

($34.00).

     (3) For the registration of every automobile, motor truck or tractor, when equipped with

pneumatic tires, the gross weight of which is:

     (i) More than four thousand pounds (4,000 lbs.), but not more than five thousand pounds

(5,000 lbs.): forty dollars ($40.00);

     (ii) More than five thousand pounds (5,000 lbs.), but not more than six thousand pounds

(6,000 lbs.): forty-eight dollars ($48.00);

     (iii) More than six thousand pounds (6,000 lbs.), but not more than seven thousand pounds

(7,000 lbs.): fifty-six dollars ($56.00);

     (iv) More than seven thousand pounds (7,000 lbs.), but not more than eight thousand

pounds (8,000 lbs.): sixty-four dollars ($64.00);

     (v) More than eight thousand pounds (8,000 lbs.), but not more than nine thousand pounds

(9,000 lbs.): seventy dollars ($70.00);

     (vi) More than nine thousand pounds (9,000 lbs.), but not more than ten thousand pounds

(10,000 lbs.): seventy-eight dollars ($78.00);

     (vii) More than ten thousand pounds (10,000 lbs.), but not more than twelve thousand

pounds (12,000 lbs.): one hundred six dollars ($106);

     (viii) More than twelve thousand pounds (12,000 lbs.), but not more than fourteen thousand

pounds (14,000 lbs.): one hundred twenty-four dollars ($124);

     (ix) More than fourteen thousand pounds (14,000 lbs.), but not more than sixteen thousand

pounds (16,000 lbs.): one hundred forty dollars ($140);

     (x) More than sixteen thousand pounds (16,000 lbs.), but not more than eighteen thousand

pounds (18,000 lbs.): one hundred fifty-eight dollars ($158);

     (xi) More than eighteen thousand pounds (18,000 lbs.), but not more than twenty thousand

pounds (20,000 lbs.): one hundred seventy-six dollars ($176);

     (xii) More than twenty thousand pounds (20,000 lbs.), but not more than twenty-two

thousand pounds (22,000 lbs.): one hundred ninety-four dollars ($194);

     (xiii) More than twenty-two thousand pounds (22,000 lbs.), but not more than twenty-four

thousand pounds (24,000 lbs.): two hundred ten dollars ($210);

     (xiv) More than twenty-four thousand pounds (24,000 lbs.), but not more than twenty-six

thousand pounds (26,000 lbs.): two hundred thirty dollars ($230);

     (xv) More than twenty-six thousand pounds (26,000 lbs.), but not more than twenty-eight

thousand pounds (28,000 lbs.): two hundred ninety-six dollars ($296);

     (xvi) More than twenty-eight thousand pounds (28,000 lbs.), but not more than thirty

thousand pounds (30,000 lbs.): three hundred sixteen dollars ($316);

     (xvii) More than thirty thousand pounds (30,000 lbs.), but not more than thirty-two

thousand pounds (32,000 lbs.): four hundred and twenty-two dollars ($422);

     (xviii) More than thirty-two thousand pounds (32,000 lbs.), but not more than thirty-four

thousand pounds (34,000 lbs.): four hundred and forty-eight dollars ($448);

     (xix) More than thirty-four thousand pounds (34,000 lbs.), but not more than thirty-six

thousand pounds (36,000 lbs.): four hundred and seventy-six dollars ($476);

     (xx) More than thirty-six thousand pounds (36,000 lbs.), but not more than thirty-eight

thousand pounds (38,000 lbs.): five hundred and two dollars ($502);

     (xxi) More than thirty-eight thousand pounds (38,000 lbs.), but not more than forty

thousand pounds (40,000 lbs.): five hundred and twenty-eight dollars ($528);

     (xxii) More than forty thousand pounds (40,000 lbs.), but not more than forty-two thousand

pounds (42,000 lbs.): five hundred and fifty-four dollars ($554);

     (xxiii) More than forty-two thousand pounds (42,000 lbs.), but not more than forty-six

thousand pounds (46,000 lbs.): six hundred and eight dollars ($608);

     (xxiv) More than forty-six thousand pounds (46,000 lbs.), but not more than fifty thousand

pounds (50,000 lbs.): six hundred and sixty dollars ($660);

     (xxv) More than fifty thousand pounds (50,000 lbs.), but not more than fifty-four thousand

pounds (54,000 lbs.): seven hundred and twelve dollars ($712);

     (xxvi) More than fifty-four thousand pounds (54,000 lbs.), but not more than fifty-eight

thousand pounds (58,000 lbs.): seven hundred and sixty-eight dollars ($768);

     (xxvii) More than fifty-eight thousand pounds (58,000 lbs.), but not more than sixty-two

thousand pounds (62,000 lbs.): eight hundred and sixteen dollars ($816);

     (xxviii) More than sixty-two thousand pounds (62,000 lbs.), but not more than sixty-six

thousand pounds (66,000 lbs.): eight hundred and seventy-six dollars ($876);

     (xxix) More than sixty-six thousand pounds (66,000 lbs.), but not more than seventy

thousand pounds (70,000 lbs.): nine hundred and twenty-four dollars ($924);

     (xxx) More than seventy thousand pounds (70,000 lbs.), but not more than seventy-four

thousand pounds (74,000 lbs.): nine hundred and seventy-two dollars ($972);

     (xxxi) Over seventy-four thousand pounds (74,000 lbs.): nine hundred and seventy-two

dollars ($972), plus twenty-four dollars ($24.00) per two thousand pounds (2,000 lbs.) gross

weight.

     (4) For the registration of every semi-trailer to be used with a truck-tractor, as defined in §

31-1-4(f), shall be as follows: an annual fee of twelve dollars ($12.00) for a one-year registration;

for multi-year registrations the fee of fifty dollars ($50.00) for a five-year (5) registration; and

eighty dollars ($80.00) for an eight-year (8) registration. However, when in use, the weight of the

resulting semi-trailer unit and its maximum carrying capacity shall not exceed the gross weight of

the original semi-trailer unit from which the gross weight of the tractor was determined. A

registration certificate and registration plate shall be issued for each semi-trailer so registered.

There shall be no refund of payment of such fee, except that when a plate is returned prior to ninety

(90) days before the effective date of that year’s registration, the pro rate amount, based on the

unused portion of the multi-year registration plate period at time of surrender, shall be refunded. A

multi-year semi-trailer registration may be transferred to another semi-trailer subject to the

provisions and fee set forth in § 31-6-11. Thirty percent (30%) of the semi-trailer registration fee

shall be retained by the division of motor vehicles to defray the costs of implementation of the

international registration plan (IRP) and fleet registration section.

     (5) For the registration of every automobile, motor truck, or tractor, when equipped with

other than pneumatic tires, there shall be added to the above gross weight fees a charge of ten cents

(10¢) for each one hundred pounds (100 lbs.) of gross weight.

     (6) For the registration of every public bus, the rates provided for motor vehicles for hire

plus two dollars ($2.00) for each passenger that bus is rated to carry, the rating to be determined by

the administrator of the division of motor vehicles.

     (7) For the registration of every motorcycle, or motor-driven cycle, thirteen dollars

($13.00). Three dollars ($3.00) from that sum shall be turned over to the department of education

to assist in the payment of the cost of the motorcycle driver’s education program as enumerated in

§ 31-10.1-1.1.

     (8) For the registration of every trailer, not including semi-trailers used with a truck-tractor

as defined in § 31-1-4(d), with a gross weight of three thousand pounds (3,000 lbs.) or less, five

dollars ($5.00). Trailers with a gross weight of more than three thousand pounds (3,000 lbs.) shall

be assessed a registration fee of one dollar and fifty cents ($1.50) per thousand pounds (1,000 lbs.).

     (9) The annual registration fee for a motor vehicle, commonly described as a boxcar and/or

locomotive, and used only by La Societe Des 40 Hommes et 8 Chevaux for civic demonstration,

parades, convention purposes, or social welfare work, shall be two dollars ($2.00).

     (10) For the registration of every motor vehicle, trailer, or semi-trailer owned by any

department or agency of any city or town or district, provided the name of the city or town or

district or state department or agency owning the same shall be plainly printed on two (2) sides of

the vehicle, two dollars ($2.00).

     (11) For the registration of motor vehicles used for racing, fifteen dollars ($15.00).

     (12) For every duplicate registration certificate, seventeen dollars ($17.00).

     (13) For every certified copy of a registration certificate or application, ten dollars ($10.00).

     (14) For every certificate assigning a special identification number or mark as provided in

§ 31-3-37, one dollar ($1.00).

     (15) For every replacement of number plates or additional pair of number plates, without

changing the number, thirty dollars ($30.00).

     (16) For the registration of every farm vehicle, used in farming as provided in § 31-3-31:

ten dollars ($10.00).

     (17) For the registration of antique motor vehicles, five dollars ($5.00).

     (18) For the registration of a suburban vehicle, when used as a pleasure vehicle and the

gross weight of which is not more than four thousand pounds (4,000 lbs.), the same rates as charged

in subsection (1) of this section shall be applicable and when used as a commercial vehicle and the

gross weight of which is not more than four thousand pounds (4,000 lbs.), the same rates as

provided in subsection (2) of this section shall be applicable. The rates in subsection (3) of this

section shall be applicable when the suburban vehicle has a gross weight of more than four thousand

pounds (4,000 lbs.), regardless of the use of the vehicle.

     (19) For the registration of every motor bus that is used exclusively under contract with a

political subdivision or school district of the state for the transportation of school children, twenty-

five dollars ($25); provided that the motor bus may also be used for the transportation of persons

to and from church and Sunday school services, and for the transportation of children to and from

educational or recreational projects sponsored by a city or town or by any association or

organization supported wholly or in part by public or private donations for charitable purposes,

without the payment of additional registration fee.

     (20) For the registration of every motorized bicycle, ten dollars ($10.00).

     (21) For the registration of every motorized tricycle, ten dollars ($10.00).

     (22) For the replacement of number plates with a number change, twenty dollars ($20.00).

     (23) For the initial issuance and each reissuance of fully reflective plates, as required by §§

31-3-10, 31-3-32, and 31-3-33, an additional eight dollars ($8.00); provided, however, for the initial

issuance of new license plates as required by § 31-3-33(c) that feature the 2022 approved design,

the fee shall be waived when the plate is issued for a vehicle with an existing registration.

     (24) For the issuance of a trip permit under the International Registration Plan, twenty-five

dollars ($25.00) per vehicle. The division of motor vehicles is authorized to issue seventy-two-hour

(72) trip permits for vehicles required to be registered in the International Registration Plan that

have not been apportioned with the state of Rhode Island.

     (25) For the issuance of a hunter’s permit under the International Registration Plan, twenty-

five dollars ($25.00) per vehicle. The division of motor vehicles is authorized to issue hunter’s

permits for motor vehicles based in the state of Rhode Island and otherwise required to be registered

in the International Registration Plan. These permits are valid for thirty (30) days.

     (26) For the registration of a specially adapted motor vehicle necessary to transport a family

member with a disability for personal, noncommercial use, a fee of thirty dollars ($30.00) assessed.

     (27) (i) For the registration of every automobile, motor truck, or tractor, there shall be

added to the above gross weight fees:

     (A) a fee of one hundred fifty dollars ($150.00) for each battery electric vehicle; and

     (B) a fee of seventy-five dollars ($75.00) for each plug-in hybrid electric vehicle.

     (C)Beginning July 1, 2027, and every other year thereafter, each of these fees stated in

subdivisions (i)(A) and (B) of this subsection shall be adjusted by the same percentage the gasoline

tax is adjusted pursuant to § 31-36-7; said adjustment shall be rounded to the nearest one-dollar

($1.00) increment, provided that each total fee shall not be less than provided for in subdivisions

(i)(A) or (B) of this subsection, respectively.

     (ii) For purposes of this subsection, the following definitions shall apply:

     (A) “Battery Electric Vehicle” means a motor vehicle which operates solely by use of a

battery or battery pack. The term includes a motor vehicle which is powered mainly through the

use of an electric battery or battery pack but which uses a flywheel that stores energy produced by

the electric motor or through regenerative braking to assist in operation of the motor vehicle.

     (B) “Plug-in Hybrid Electric Vehicle” means a motor vehicle that can deliver power to the

drive wheels solely by a battery-powered electric motor but which also incorporates the use of

another fuel to power a combustion engine. The battery of the vehicle must be capable of receiving

energy from an external source, such as an outlet or charging station.

     SECTION 4. Sections 42-63.1-2 and 42-63.1-3 of the General Laws in Chapter 42-63.1

entitled “Tourism and Development” is hereby amended to read as follows:

     42-63.1-2. Definitions. [Effective January 30, 2025.]

     For the purposes of this chapter:

     (1) “Consideration” means the monetary charge for the use of space devoted to transient

lodging accommodations.

     (2) “Corporation” means the Rhode Island commerce corporation.

     (3) “District” means the regional tourism districts set forth in § 42-63.1-5.

     (4) “Hosting platform” means any electronic or operating system in which a person or

entity provides a means through which an owner may offer a residential unit for “tourist or

transient” use. This service is usually, though not necessarily, provided through an online or web-

based system which generally allows an owner to advertise the residential unit through a hosted

website and provides a means for a person or entity to arrange, or otherwise facilitate reservations

for, tourist or transient use in exchange for payment, whether the person or entity pays rent directly

to the owner or to the hosting platform. All hosting platforms are required to collect and remit the

tax owed under this section.

     (5) “Hotel” means any facility offering a minimum of one (1) room for which the public

may, for a consideration, obtain transient lodging accommodations. The term “hotel” shall include

hotels, motels, tourist homes, tourist camps, lodging houses, and inns. The term “hotel” shall also

include houses, condominiums, or other residential dwelling units, regardless of the number of

rooms, which are used and/or advertised for rent for occupancy. The term “hotel” shall not include

schools, hospitals, sanitariums, nursing homes, and chronic care centers.

     (6) “Occupancy” means a person, firm, or corporation’s use of space for transient lodging

accommodations not to exceed thirty (30) days. Excluded from “occupancy” is the use of space for

which the occupant has a written lease for the space, which lease covers a rental period of twelve

(12) months or more. Furthermore, any house, condominium, or other residential dwelling rented,

for which the occupant has a documented arrangement for the space covering a rental period of

more than thirty (30) consecutive days or for one calendar month is excluded from the definition

of occupancy.

     (7) “Owner” means any person who owns real property and is the owner of record. Owner

shall also include a lessee where the lessee is offering a residential unit for “tourist or transient”

use.

     (8) “Residential unit” means a room or rooms, including a condominium or a room or a

dwelling unit that forms part of a single, joint, or shared tenant arrangement, in any building, or

portion thereof, which is designed, built, rented, leased, let, or hired out to be occupied for non-

commercial use.

     (9) “Tax” means the hotel tax and whole home short-term rental tax imposed by § 44-18-

36.1(a) and (d).

     (10) “Tourist or transient” means any use of a residential unit for occupancy for less than

a thirty (30) consecutive day term of tenancy, or occupancy for less than thirty (30) consecutive

days of a residential unit leased or owned by a business entity, whether on a short-term or long-

term basis, including any occupancy by employees or guests of a business entity for less than thirty

(30) consecutive days where payment for the residential unit is contracted for or paid by the

business entity.

     (11) “Tour operator” means a person that derives a majority of their or its revenue by

providing tour operator packages.

     (12) “Tour operator packages” means travel packages that include the services of a tour

guide and where the itinerary encompasses five (5) or more consecutive days.

     42-63.1-3. Distribution of tax.

     (a) For returns and tax payments received on or before December 31, 2015, except as

provided in § 42-63.1-12, the proceeds of the hotel tax, excluding the portion of the hotel tax

collected from residential units offered for tourist or transient use through a hosting platform, shall

be distributed as follows by the division of taxation and the city of Newport:

     (1) Forty-seven percent (47%) of the tax generated by the hotels in the district, except as

otherwise provided in this chapter, shall be given to the regional tourism district wherein the hotel

is located; provided, however, that from the tax generated by the hotels in the city of Warwick,

thirty-one percent (31%) of the tax shall be given to the Warwick regional tourism district

established in § 42-63.1-5(a)(5) and sixteen percent (16%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors’ Bureau established in § 42-63.1-11; and provided

further, that from the tax generated by the hotels in the city of Providence, sixteen percent (16%)

of that tax shall be given to the Greater Providence-Warwick Convention and Visitors’ Bureau

established by § 42-63.1-11, and thirty-one percent (31%) of that tax shall be given to the

Convention Authority of the city of Providence established pursuant to the provisions of chapter

84 of the public laws of January, 1980; provided, however, that the receipts attributable to the

district as defined in § 42-63.1-5(a)(7) shall be deposited as general revenues, and that the receipts

attributable to the district as defined in § 42-63.1-5(a)(8) shall be given to the Rhode Island

commerce corporation as established in chapter 64 of this title.

     (2) Twenty-five percent (25%) of the hotel tax shall be given to the city or town where the

hotel that generated the tax is physically located, to be used for whatever purpose the city or town

decides.

     (3) Twenty-one percent (21%) of the hotel tax shall be given to the Rhode Island commerce

corporation established in chapter 64 of this title, and seven percent (7%) to the Greater Providence-

Warwick Convention and Visitors’ Bureau.

     (b) For returns and tax payments received after December 31, 2015, except as provided in

§ 42-63.1-12, the proceeds of the hotel tax, excluding the portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

     (1) For the tax generated by the hotels in the Aquidneck Island district, as defined in § 42-

63.1-5, forty-two percent (42%) of the tax shall be given to the Aquidneck Island district, twenty-

five percent (25%) of the tax shall be given to the city or town where the hotel that generated the

tax is physically located, five percent (5%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-eight percent

(28%) of the tax shall be given to the Rhode Island commerce corporation established in chapter

64 of this title.

     (2) For the tax generated by the hotels in the Providence district as defined in § 42-63.1-5,

twenty eight percent (28%) of the tax shall be given to the Providence district, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel that generated the tax is physically

located, twenty-three percent (23%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-four percent (24%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (3) For the tax generated by the hotels in the Warwick district as defined in § 42-63.1-5,

twenty-eight percent (28%) of the tax shall be given to the Warwick District, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel that generated the tax is physically

located, twenty-three percent (23%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-four percent (24%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (4) For the tax generated by the hotels in the Statewide district, as defined in § 42-63.1-5,

twenty-five percent (25%) of the tax shall be given to the city or town where the hotel that generated

the tax is physically located, five percent (5%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy percent (70%)

of the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this

title.

     (5) With respect to the tax generated by hotels in districts other than those set forth in

subsections (b)(1) through (b)(4) of this section, forty-two percent (42%) of the tax shall be given

to the regional tourism district, as defined in § 42-63.1-5, wherein the hotel is located, twenty-five

percent (25%) of the tax shall be given to the city or town where the hotel that generated the tax is

physically located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-eight percent (28%) of

the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this

title.

     (c) For returns and tax payments received before July 1, 2019, the proceeds of the hotel tax

collected from residential units offered for tourist or transient use through a hosting platform shall

be distributed as follows by the division of taxation and the city of Newport: twenty-five percent

(25%) of the tax shall be given to the city or town where the residential unit that generated the tax

is physically located, and seventy-five percent (75%) of the tax shall be given to the Rhode Island

commerce corporation established in chapter 64 of this title.

     (d) The Rhode Island commerce corporation shall be required in each fiscal year to spend

on the promotion and marketing of Rhode Island as a destination for tourists or businesses an

amount of money of no less than the total proceeds of the hotel tax it receives pursuant to this

chapter for the fiscal year.

     (e) Notwithstanding the foregoing provisions of this section, for returns and tax payments

received on or after July 1, 2016, and on or before June 30, 2017, except as provided in § 42-63.1-

12, the proceeds of the hotel tax, excluding the portion of the hotel tax collected from residential

units offered for tourist or transient use through a hosting platform, shall be distributed in

accordance with the distribution percentages established in subsections (a)(1) through (a)(3) of this

section by the division of taxation and the city of Newport.

     (f) For returns and tax payments received on or after July 1, 2018, except as provided in §

42-63.1-12, the proceeds of the hotel tax, excluding the portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform, shall be distributed

as follows by the division of taxation and the city of Newport:

     (1) For the tax generated by the hotels in the Aquidneck Island district, as defined in § 42-

63.1-5, forty-five percent (45%) of the tax shall be given to the Aquidneck Island district, twenty-

five percent (25%) of the tax shall be given to the city or town where the hotel that generated the

tax is physically located, five percent (5%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five percent

(25%) of the tax shall be given to the Rhode Island commerce corporation established in chapter

64 of this title.

     (2) For the tax generated by the hotels in the Providence district as defined in § 42-63.1-5,

thirty percent (30%) of the tax shall be given to the Providence district, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel that generated the tax is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one percent (21%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (3) For the tax generated by the hotels in the Warwick district as defined in § 42-63.1-5,

thirty percent (30%) of the tax shall be given to the Warwick District, twenty-five percent (25%)

of the tax shall be given to the city or town where the hotel that generated the tax is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one percent (21%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (4) For the tax generated by the hotels in the Statewide district, as defined in § 42-63.1-5,

twenty-five percent (25%) of the tax shall be given to the city or town where the hotel that generated

the tax is physically located, five percent (5%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy percent (70%)

of the tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this

title.

     (5) With respect to the tax generated by hotels in districts other than those set forth in

subsections (f)(1) through (f)(4) of this section, forty-five percent (45%) of the tax shall be given

to the regional tourism district, as defined in § 42-63.1-5, wherein the hotel is located, twenty-five

percent (25%) of the tax shall be given to the city or town where the hotel that generated the tax is

physically located, five percent (5%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five (25%) of the tax shall

be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (g) For returns and tax payments received on or after July 1, 2019, except as provided in §

42-63.1-12, the proceeds of the hotel tax, including the portion of the hotel tax collected from

residential units offered for tourist or transient use through a hosting platform except as provided

in subsection (h) of this section, shall be distributed as follows by the division of taxation and the

city of Newport:

     (1) For the tax generated in the Aquidneck Island district, as defined in § 42-63.1-5, forty-

five percent (45%) of the tax shall be given to the Aquidneck Island district, twenty-five percent

(25%) of the tax shall be given to the city or town where the hotel or residential unit that generated

the tax is physically located, five percent (5%) of the tax shall be given to the Greater Providence-

Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five percent

(25%) of the tax shall be given to the Rhode Island commerce corporation established in chapter

64 of this title.

     (2) For the tax generated in the Providence district as defined in § 42-63.1-5, thirty percent

(30%) of the tax shall be given to the Providence district, twenty-five percent (25%) of the tax shall

be given to the city or town where the hotel or residential unit that generated the tax is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one percent (21%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (3) For the tax generated in the Warwick district as defined in § 42-63.1-5, thirty percent

(30%) of the tax shall be given to the Warwick District, twenty-five percent (25%) of the tax shall

be given to the city or town where the hotel or residential unit that generated the tax is physically

located, twenty-four percent (24%) of the tax shall be given to the Greater Providence-Warwick

Convention and Visitors Bureau established in § 42-63.1-11, and twenty-one percent (21%) of the

tax shall be given to the Rhode Island commerce corporation established in chapter 64 of this title.

     (4) For the tax generated in the Statewide district, as defined in § 42-63.1-5, twenty-five

percent (25%) of the tax shall be given to the city or town where the hotel or residential unit that

generated the tax is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and seventy

percent (70%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of this title.

     (5) With respect to the tax generated in districts other than those set forth in subsections

(g)(1) through (g)(4) of this section, forty-five percent (45%) of the tax shall be given to the regional

tourism district, as defined in § 42-63.1-5, wherein the hotel or residential unit is located, twenty-

five percent (25%) of the tax shall be given to the city or town where the hotel or residential unit

that generated the tax is physically located, five percent (5%) of the tax shall be given to the Greater

Providence-Warwick Convention and Visitors Bureau established in § 42-63.1-11, and twenty-five

percent (25%) of the tax shall be given to the Rhode Island commerce corporation established in

chapter 64 of this title.

     (h) Distribution of whole home short-term rental tax. For returns and tax payments received

after December 31, 2025, the proceeds of the whole home short-term rental tax established in § 44-

18-36.1(d) shall be given by the division of taxation and the city of Newport to the department of

housing, which shall deposit the proceeds into the Housing Resources and Homelessness restricted

receipt account, established pursuant to § 42-128-2(3).

     SECTION 5. Chapter 42-64.11 of the General Laws entitled “Jobs Growth Act” is hereby

amended by adding thereto the following section:

     42-64.11-7. Sunset.

     No modifications shall be allowed, no applications shall be certified, and no taxpayers

certified prior to January 1, 2026, shall pay the tax under this chapter for tax years beginning on or

after January 1, 2026.

     SECTION 6. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and

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

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

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

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

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

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

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

     (2) Newspapers.

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

newspaper.

     (ii) “Newspaper” means an unbound publication printed on newsprint that contains news,

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

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

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

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

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

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

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

service or management entity under contract to the educational institutions.

     (4) Containers.

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

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

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

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

contents with the container.

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

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

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

the contents or when resold for refilling.

     (D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage

producers who place the alcoholic beverages in the containers.

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

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

containers.”

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

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

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

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

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

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

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

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

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

America, Phi Beta Lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers

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

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

and parent-teacher associations; and from the sale, storage, use, and other consumption in this state,

of and by the Industrial Foundation of Burrillville, a Rhode Island domestic nonprofit corporation.

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

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

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

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

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

such materials and supplies (materials and/or supplies are defined as those that are essential to the

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

without payment of the tax.

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

or organization but shall in that instance provide his or her suppliers with certificates in the form

as determined by the division of taxation showing the reason for exemption and the contractor’s

records must substantiate the claim for exemption by showing the disposition of all property so

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

on the property used.

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

of: (i) Gasoline and other products taxed under chapter 36 of title 31 and (ii) Fuels used for the

propulsion of airplanes.

     (7) Purchase for manufacturing purposes.

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

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

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

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

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

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

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

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

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

     (iii) “Consumed” includes mere obsolescence.

     (iv) “Manufacturing” means and includes: manufacturing, compounding, processing,

assembling, preparing, or producing.

     (v) “Process of manufacturing” means and includes all production operations performed in

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

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

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

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

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

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

distribution operations that occur subsequent to production operations, such as handling, storing,

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

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

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

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

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

the municipality where it is located.

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

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

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

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

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

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

except sub-sector 3118 (bakeries);

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

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

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

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

glasses, cups, napkins, or straws.

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

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

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

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

over-the-counter drugs and grooming and hygiene products as defined in § 44-18-7.1(h)(iii).

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

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

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

delivery pumps that are sold on prescription to individuals to be used by them to dispense or

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

administer prescription drugs, shall also be exempt from tax.

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

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

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

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

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

and canes.

     (12) Coffins, caskets, urns, shrouds and burial garments.  From the sale and from the

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

urn vaults, grave liners, grave vaults, burial tent setups, prayer cards, shrouds, and other burial

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

     (13) Motor vehicles sold to nonresidents.

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

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

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

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

nonresidents is not exempt from the tax imposed under § 44-18-20. In that event, the bona fide

nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that would be imposed

in his or her state of residence not to exceed the rate that would have been imposed under § 44-18-

20. Notwithstanding any other provisions of law, a licensed motor vehicle dealer shall add and

collect the tax required under this subdivision and remit the tax to the tax administrator under the

provisions of chapters 18 and 19 of this title. When a Rhode Island licensed, motor vehicle dealer

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

nonresident as provided in this section, the dealer in computing the tax takes into consideration the

law of the state of the nonresident as it relates to the trade-in of motor vehicles.

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

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

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

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

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

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

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

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

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

provisions of § 44-18-20.

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

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

licensed under § 40-9-11.1.

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

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

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

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

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

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

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

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

portion has as its primary purpose the control of the pollution or contamination of the waters or air

of this state. As used in this subdivision, “facility” means any land, facility, device, building,

machinery, or equipment.

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

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

organizations and associations mentioned in subsection (5), or by privately owned and operated

summer camps for children.

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

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

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

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

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

institution” as used in this section means an institution of learning not operated for profit that is

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

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

school year; that keeps and furnishes to students and others records required and accepted for

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

which inures to the benefit of any individual.

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

     (i) From the sale of: (A) Special adaptations; (B) The component parts of the special

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

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

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

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

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

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

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

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

assisted controls, raised tops or dropped floors, raised entry doors, or alternative signaling devices

to auditory signals.

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

adaptations, for a “wheelchair accessible taxicab” as defined in § 39-14-1, and/or a “wheelchair

accessible public motor vehicle” as defined in § 39-14.1-1.

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

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

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

adaptations, including installation.

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

state of every type of heating fuel.

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

in this state of electricity and gas.

     (22) Manufacturing machinery and equipment.

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

molds, machinery, equipment (including replacement parts), and related items to the extent used in

an industrial plant in connection with the actual manufacture, conversion, or processing of tangible

personal property, or to the extent used in connection with the actual manufacture, conversion, or

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

in the standard industrial classification manual prepared by the Technical Committee on Industrial

Classification, Office of Statistical Standards, Executive Office of the President, United States

Bureau of the Budget, as revised from time to time, to be sold, or that machinery and equipment

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

subdivision, “industrial plant” means a factory at a fixed location primarily engaged in the

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

course of business;

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

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

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

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

manual prepared by the Technical Committee on Industrial Classification, Office of Statistical

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

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

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

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

that is not to be sold and that would be exempt under subdivision (7) or this subdivision if purchased

from a vendor or machinery and equipment and related items used during any manufacturing,

converting, or processing function is exempt under this subdivision even if that operation, function,

or purpose is not an integral or essential part of a continuous production flow or manufacturing

process;

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

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

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

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

identifiable as to use.

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

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

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

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

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

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

the word “automobile” means a private passenger automobile not used for hire and does not refer

to any other type of motor vehicle.

     (24) Precious metal bullion.

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

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

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

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

to: gold, silver, platinum, rhodium, and chromium, and that is in a state or condition that its value

depends upon its content and not upon its form.

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

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

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

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

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

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

vessels.

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

consumption in this state of vessels and other watercraft that are in excess of five (5) net tons and

that are used exclusively for “commercial fishing,” as defined in this subdivision, and from the

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

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

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

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

commercial fishing of the vessels and other watercraft. “Commercial fishing” means taking or

attempting to take any fish, shellfish, crustacea, or bait species with the intent of disposing of it for

profit or by sale, barter, trade, or in commercial channels. The term does not include subsistence

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

vessels and other watercraft with a Rhode Island party and charter boat license issued by the

department of environmental management pursuant to § 20-2-27.1 that meet the following criteria:

(i) The operator must have a current United States Coast Guard (U.S.C.G.) license to carry

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

recognition of the work being performed by the streamlined sales and use tax governing board,

upon passage of any federal law that authorizes states to require remote sellers to collect and remit

sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. The

unlimited exemption on sales of clothing and footwear shall take effect on the date that the state

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

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

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

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

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

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

to, the Old Testament and the New Testament versions.

     (30) Boats.

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

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

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

made in this state or elsewhere; provided, that the nonresident transports the boat within thirty (30)

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

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

require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents as the

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

subdivision, including the affidavit of the seller that the buyer represented himself or herself to be

a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this state.

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

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

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

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

schools or of organized activities of the enrolled students.

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

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

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

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

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

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

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

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

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

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

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

whether an individual, a group, a partnership, or a corporation for exemptions issued prior to July

1, 2002. For exemptions issued or renewed after July 1, 2002, there shall be two (2) levels. Level I

shall be based on proof of annual, gross sales from commercial farming of at least twenty-five

hundred dollars ($2,500) and shall be valid for purchases subject to the exemption provided in this

subdivision except for motor vehicles with an excise tax value of five thousand dollars ($5,000) or

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

ten thousand dollars ($10,000) or greater and shall be valid for purchases subject to the exemption

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

dollars ($5,000) or greater. For the initial issuance of the exemptions, proof of the requisite amount

of annual gross sales from commercial farming shall be required for the prior year; for any renewal

of an exemption granted in accordance with this subdivision at either level I or level II, proof of

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

the prior two (2) years. Certificates of exemption issued or renewed after July 1, 2002, shall clearly

indicate the level of the exemption and be valid for four (4) years after the date of issue. This

exemption applies even if the same equipment is used for ancillary uses, or is temporarily used for

a non-farming or a non-agricultural purpose, but shall not apply to motor vehicles acquired after

July 1, 2002, unless the vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for

registration displaying farm plates as provided for in § 31-3-31.

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

the state of compressed air.

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

United States, Rhode Island or POW-MIA flags.

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

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

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

service connected or not. The motor vehicle must be purchased by and especially equipped for use

by the qualifying veteran. Certificate of exemption or refunds of taxes paid is granted under rules

or regulations that the tax administrator may prescribe.

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

state of textbooks by an “educational institution,” as defined in subsection (18) of this section, and

any educational institution within the purview of § 16-63-9(4), and used textbooks by any purveyor.

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

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

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

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

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

as defined in § 23-19.1-4, where the “hazardous wastes” are generated in Rhode Island solely by

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

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

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

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

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

environmental management only to procure an order, and is a “trade secret” as defined in § 28-21-

10(b), it is not open to public inspection or publicly disclosed unless disclosure is required under

chapter 21 of title 28 or chapter 24.4 of title 23.

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

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

manufacturers shipped to points outside of Rhode Island that either: (i) Accompany the product

that is sold; (ii) Are shipped in bulk to out-of-state dealers for use in the sale of the product; or (iii)

Are mailed to customers at no charge.

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

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

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

of 1977, 7 U.S.C. § 2011 et seq.

     (40) Transportation charges. From the sale or hiring of motor carriers as defined in § 39-

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

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

of hours spent on the job.

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

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

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

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

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

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

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

purposes by a qualifying firm. For the purposes of this subsection, “qualifying firm” means a

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

operation and “equipment” means scientific equipment, computers, software, and related items.

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

numismatic or investment value.

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

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

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

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

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

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

farming.

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

telecommunications service when purchased by a telecommunications company from another

telecommunications company to facilitate the provision of telecommunications service.

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

maintenance, repair, or sale.  Notwithstanding the provisions of §§ 44-18-10, 44-18-11 and 44-

18-20, the tax imposed by § 44-18-20 is not applicable for the period commencing on the first day

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

the use of any boat or vessel within this state exclusively for purposes of: (i) Delivery of the vessel

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

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

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

boat or vessel.

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

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

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

and that the jewelry display product is shipped out of state for use solely outside the state and is not

returned to the jewelry manufacturer or seller.

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

imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage,

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

subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal ten

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

     (49) Banks and regulated investment companies interstate toll-free

calls.  Notwithstanding the provisions of this chapter, the tax imposed by this chapter does not

apply to the furnishing of interstate and international, toll-free terminating telecommunication

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

in this subdivision; provided that an eligible company employs on average during the calendar year

no less than five hundred (500) “full-time equivalent employees” as that term is defined in § 42-

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

company” as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C. § 851, or a

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

investment company, an employee benefit plan, a retirement plan or a pension plan, or a state-

chartered bank.

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

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

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

     (51) Manufacturing business reconstruction materials.

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

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

facility that suffers a disaster, as defined in this subdivision, in this state. “Disaster” means any

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

an operating manufacturing business facility within this state. “Disaster” does not include any

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

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

the production and administrative facilities.

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

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

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

this exemption does not apply.

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

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

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

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

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

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

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

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

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

insecticide, and fertilizers.

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

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

of horses.

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

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

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

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

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

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

its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in

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

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

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

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

the tax to the tax administrator under the provisions of chapters 18 and 19 of this title. Provided,

that when a Rhode Island licensed, non-motorized recreational vehicle dealer is required to add and

collect the sales and use tax on the sale of a non-motorized recreational vehicle to a bona fide

nonresident as provided in this section, the dealer in computing the tax takes into consideration the

law of the state of the nonresident as it relates to the trade-in of motor vehicles.

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

require any licensed, non-motorized recreational vehicle dealer to keep records of sales to bona fide

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

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

vehicle dealer that the purchaser of the non-motorized recreational vehicle was the holder of, and

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

a valid out-of-state driver’s license.

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

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

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

for, the use tax imposed under the provisions of § 44-18-20.

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

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

that is eligible to be registered for highway use, including, but not limited to, “pick-up coaches” or

“pick-up campers,” “travel trailers,” and “tent trailers” as those terms are defined in chapter 1 of

title 31.

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

of sprinkler and fire alarm systems; emergency lighting and alarm systems; and the materials

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

occupancies existing therein in July 2003 in order to comply with any additional requirements for

such buildings arising directly from the enactment of the Comprehensive Fire Safety Act of 2003

and that are not required by any other provision of law or ordinance or regulation adopted pursuant

to that act. The exemption provided in this subdivision shall expire on December 31, 2008.

     (56) Aircraft.  Notwithstanding the provisions of this chapter, the tax imposed by §§ 44-

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

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

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

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

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

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

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

water-to-air type pumps; wind turbines; towers used to mount wind turbines if specified by or sold

by a wind turbine manufacturer; DC to AC inverters that interconnect with utility power lines; and

manufactured mounting racks and ballast pans for solar collector, module, or panel installation. Not

to include materials that could be fabricated into such racks; monitoring and control equipment, if

specified or supplied by a manufacturer of solar thermal, solar photovoltaic, geothermal, or wind

energy systems or if required by law or regulation for such systems but not to include pumps, fans

or plumbing or electrical fixtures unless shipped from the manufacturer affixed to, or an integral

part of, another item specified on this list; and solar storage tanks that are part of a solar domestic

hot water system or a solar space heating system. If the tank comes with an external heat exchanger

it shall also be tax exempt, but a standard hot water tank is not exempt from state sales tax.

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

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

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

twenty (120) days from the date of delivery.

     (59) Dietary supplements.  From the sale and from the storage, use, or other consumption

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

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

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

storage, use, or other consumption of livestock and poultry of the kinds of products that ordinarily

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

constitute fibers for human use.

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

technology that is required by § 31-47.3-4.

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

animals as described in subsection (61) of this section.

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

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

malt beverages; provided, further, notwithstanding § 6-13-1 or any other general or public law to

the contrary, alcoholic beverages, as defined in § 44-18-7.1, shall not be subject to minimum

markup.

     (65) Seeds and plants used to grow food and food ingredients.  From the sale, storage,

use, or other consumption in this state of seeds and plants used to grow food and food ingredients

as defined in § 44-18-7.1(l)(i). “Seeds and plants used to grow food and food ingredients” shall not

include marijuana seeds or plants.

     (66) Feminine hygiene products.  From the sale and from the storage, use, or other

consumption of tampons, panty liners, menstrual cups, sanitary napkins, and other similar products

the principal use of which is feminine hygiene in connection with the menstrual cycle.

     (67) “Breast pump collection and storage supplies”  means items of tangible personal

property used in conjunction with a breast pump to collect milk expressed from a human breast and

to store collected milk until it is ready for consumption. “Breast pump collection and storage

supplies” include, but are not limited to, breast shields and breast shield connectors; breast pump

tubes and tubing adaptors; breast pump valves and membranes; backflow protectors and backflow

protector adaptors; bottles and bottle caps specific to the operation of the breast pump; breast milk

storage bags; and related items sold as part of a breast pump kit pre-packaged by the breast pump

manufacturer. “Breast pump collection and storage supplies” does not include: bottles and bottle

caps not specific to the operation of the breast pump; breast pump travel bags and other similar

carrying accessories, including ice packs, labels, and other similar products, unless sold as part of

a breast pump kit pre-packed by the breast pump manufacturer; breast pump cleaning supplies,

unless sold as part of a breast pump kit pre-packaged by the breast pump manufacturer; nursing

bras, bra pads, breast shells, and other similar products; and creams, ointments, and other similar

products that relieve breastfeeding-related symptoms or conditions of the breasts or nipples.

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

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

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

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

motorcycles for the repurchase of the motorcycle whether the repurchase was voluntary or not

towards the purchase of a new or used motorcycle by the buyer. For the purpose of this subsection,

the word “motorcycle” means a motorcycle not used for hire and does not refer to any other type

of motor vehicle.

     (69) Firearm safety and storage devices. From the sale and from the storage, use, or

other consumption in this state of firearm safety devices and firearm storage devices. Firearm

safety device means a device that, when installed on a firearm, is designed to prevent the firearm

from being operated without first deactivating the device, or a device to be equipped or installed

on a firearm that is designed to prevent the operation of the firearm by anyone who does not have

authorized access to the firearm. A firearm sold with a firearm safety device already installed on

it is treated as the sale of a firearm and not the sale of a firearm safety device. A firearm storage

device means a container or enclosure that is designed and marketed for the principal purpose of

safely storing or displaying a firearm and that is secured by a combination lock, key lock, or lock

based on biometric information which, once locked, is incapable of being opened without the

combination, key, or biometric information, respectively.

     SECTION 7. Section 44-18-36.1 of the General Laws in Chapter 44-18 entitled “Sales and

Use Taxes – Liability and Computation” is hereby amended to read as follows:

     44-18-36.1. Hotel tax and whole home short-term rental tax [Effective January 1,

2026].

     (a) There is imposed a hotel tax of five percent (5%) upon the total consideration charged

for occupancy of any space furnished by any hotel, travel packages, or room reseller or reseller as

defined in § 44-18-7.3(b) in this state. A house, condominium, or other resident dwelling shall be

exempt from the five percent (5%) hotel tax under this subsection if the house, condominium, or

other resident dwelling is rented in its entirety. The hotel tax is in addition to any sales tax imposed.

This hotel tax is administered and collected by the division of taxation and unless provided to the

contrary in this chapter, all the administration, collection, and other provisions of chapters 18 and

19 of this title apply. Nothing in this chapter shall be construed to limit the powers of the convention

authority of the city of Providence established pursuant to the provisions of chapter 84 of the public

laws of 1980, except that distribution of hotel tax receipts shall be made pursuant to chapter 63.1

of title 42 rather than chapter 84 of the public laws of 1980.

     (b) There is hereby levied and imposed, upon the total consideration charged for occupancy

of any space furnished by any hotel in this state, in addition to all other taxes and fees now imposed

by law, a local hotel tax at a rate of one percent (1%). The local hotel tax shall be administered and

collected in accordance with subsection (a).

     (c) All sums received by the division of taxation from the local hotel tax, penalties or

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

by the state treasurer to the city or town where the space for occupancy that is furnished by the

hotel is located. Unless provided to the contrary in this chapter, all of the administration, collection,

and other provisions of chapters 18 and 19 of this title shall apply.

     (d) There is hereby levied and imposed, upon the total consideration charged for

occupancy, as defined in § 42-63.1-2(6), of a house, condominium, or other resident dwelling in

this state rented in its entirety furnished by any room reseller or reseller as defined in § 44-18-7.3(b)

or any other taxpayer, in addition to all other taxes and fees now imposed by law, a whole home

short-term rental tax at a rate of five percent (5%). The whole home short-term rental tax shall be

administered, collected, and distributed in accordance with subsection (a).

     (d)(e) Notwithstanding the provisions of subsection (a) of this section, the city of Newport

shall have the authority to collect from hotels located in the city of Newport the taxes imposed by

subsections (a) and (b) of this section. The city of Newport shall also have the authority to collect

the tax imposed by subsection (d) of this section with respect to a house, condominium, or other

resident dwelling rented in its entirety located in the City of Newport.

     (1) Within ten (10) days of collection of the tax taxes, the city of Newport shall distribute

the tax taxes imposed by subsections (a) and (d) of this section as provided in § 42-63.1-3. No later

than the first day of March and the first day of September in each year in which the tax is taxes are

collected, the city of Newport shall submit to the division of taxation a report of the tax taxes

collected and distributed during the six (6) month period ending thirty (30) days prior to the

reporting date.

     (2) The city of Newport shall have the same authority as the division of taxation to recover

delinquent hotel and whole home short-term rental taxes pursuant to chapter 44-19, and the amount

of any hotel and/or whole home short-term rental tax, penalty and interest imposed by the city of

Newport until collected constitutes a lien on the real property of the taxpayer.

     SECTION 8. Sections 44-20-12 and 44-20-13 of the General Laws in Chapter 44-20

entitled “Cigarette, Other Tobacco Products, and Electronic Nicotine-Delivery System Products

[effective January 1, 2025]” are hereby amended to read as follows:

     44-20-12. Tax imposed on cigarettes sold.

     A tax is imposed on all cigarettes sold or held for sale in the state. The payment of the tax

to be evidenced by stamps, which may be affixed only by licensed distributors to the packages

containing such cigarettes. Any cigarettes on which the proper amount of tax provided for in this

chapter has been paid, payment being evidenced by the stamp, is not subject to a further tax under

this chapter. The tax is at the rate of two hundred twenty-five (225) two hundred fifty (250.0) mills

for each cigarette.

     44-20-13. Tax imposed on unstamped cigarettes.

     A tax is imposed at the rate of two hundred twenty-five (225) two hundred fifty (250.0)

mills for each cigarette upon the storage or use within this state of any cigarettes not stamped in

accordance with the provisions of this chapter in the possession of any consumer within this state.

     SECTION 9. Chapter 44-20 of the General Laws entitled “Cigarette, Other Tobacco

Products, and Electronic Nicotine-Delivery System Products [effective January 1, 2025]” is hereby

amended by adding thereto the following section:

     44-20-12.8. Floor stock tax on cigarettes and stamps.

     (a) Each person engaging in the business of selling cigarettes at retail in this state shall pay

a tax or excise to the state for the privilege of engaging in that business during any part of the

calendar year 2025. In calendar year 2025, the tax shall be measured by the number of cigarettes

held by the person in this state at 12:01 a.m. on September 2, 2025, and is computed at the rate of

twenty-five (25.0) mills for each cigarette on September 2, 2025.

     (b) Each distributor licensed to do business in this state pursuant to this chapter shall pay a

tax or excise to the state for the privilege of engaging in that business during any part of the calendar

year 2025. The tax is measured by the number of stamps, whether affixed or to be affixed to

packages of cigarettes, as required by § 44-20-28. In calendar year 2025 the tax is measured by the

number of stamps, whether affixed or to be affixed, held by the distributor at 12:01 a.m. on

September 2, 2025, and is computed at the rate of twenty-five (25.0) mills per cigarette in the

package to which the stamps are affixed or to be affixed.

     (c) Each person subject to the payment of the tax imposed by this section shall, on or before

September 16, 2025, file a return, under oath or certified under the penalties of perjury, with the

tax administrator on forms furnished by the tax administrator, showing the amount of cigarettes

and the number of stamps in that person's possession in this state at 12:01 a.m. on September 2,

2025, as described in this section above, and the amount of tax due, and shall at the time of filing

the return pay the tax to the tax administrator. Failure to obtain forms shall not be an excuse for

the failure to make a return containing the information required by the tax administrator.

     (d) The tax administrator may prescribe rules and regulations, not inconsistent with law,

regarding the assessment and collection of the tax imposed by this section.

     SECTION 10. Section 44-25-1 of the General Laws in Chapter 44-25 entitled “Real Estate

Conveyance Tax” is hereby amended to read as follows:

     44-25-1. Tax imposed — Payment — Burden.

     (a) There is imposed, on each deed, instrument, or writing by which any lands, tenements,

or other realty sold is granted, assigned, transferred, or conveyed, to, or vested in, the purchaser or

purchasers, or any other person or persons, by his, her, or their direction, or on any grant,

assignment, transfer, or conveyance or such vesting, by such persons that has the effect of making

any real estate company an acquired real estate company, when the consideration paid exceeds one

hundred dollars ($100), a tax at the rate of two dollars and thirty cents ($2.30) for each five hundred

dollars ($500), or fractional part of it, that is paid for the purchase of property or the interest in an

acquired real estate company (inclusive of the value of any lien or encumbrance remaining at the

time the sale, grant, assignment, transfer, or conveyance or vesting occurs, or in the case of an

interest in an acquired real estate company, a percentage of the value of such lien or encumbrance

equivalent to the percentage interest in the acquired real estate company being granted, assigned,

transferred, conveyed, or vested). The tax is payable at the time of making, the execution, delivery,

acceptance, or presentation for recording of any instrument affecting such transfer, grant,

assignment, transfer, conveyance, or vesting. In the absence of an agreement to the contrary, the

tax shall be paid by the grantor, assignor, transferor, or person making the conveyance or vesting.

     (b) In addition to the tax imposed by subsection (a), there is imposed, on each deed,

instrument, or writing by which any residential real property sold is granted, assigned, transferred,

or conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his,

her, or their direction, or on any grant, assignment, transfer, or conveyance or such vesting, by such

persons that has the effect of making any real estate company an acquired real estate company,

when the consideration paid exceeds eight hundred thousand dollars ($800,000), a tax at the rate of

two dollars and thirty cents ($2.30) for each five hundred dollars ($500), or fractional part of it, of

the consideration in excess of eight hundred thousand dollars ($800,000) that is paid for the

purchase of residential real property or the interest in an acquired real estate company (inclusive of

the value of any lien or encumbrance remaining at the time the sale, grant, assignment, transfer, or

conveyance or vesting occurs, or in the case of an interest in an acquired real estate company, a

percentage of the value of such lien or encumbrance equivalent to the percentage interest in the

acquired real estate company being granted, assigned, transferred, conveyed, or vested). The tax

imposed by this subsection shall be paid at the same time and in the same manner as the tax imposed

by subsection (a).

     (c) In addition to the tax imposed by subsection (a) and subsection (b), there is imposed,

on each deed, instrument, or writing by which any residential real property sold is granted, assigned,

transferred, or conveyed to, or vested in, the purchaser or purchasers, or any other person or

persons, by his, her, or their direction, or on any grant, assignment, transfer, or conveyance or such

vesting, by such persons that has the effect of making any real estate company an acquired real

estate company, when the consideration paid exceeds eight hundred thousand dollars ($800,000),

an additional tax at the rate of one dollar sixty five cents ($1.65) for each five hundred dollars

($500), or fractional part of it, of the consideration in excess of eight hundred thousand dollars

($800,000) that is paid for the purchase of residential real property or the interest in an acquired

real estate company (inclusive of the value of any lien or encumbrance remaining at the time the

sale, grant, assignment, transfer, or conveyance or vesting occurs, or in the case of an interest in an

acquired real estate company, a percentage of the value of such lien or encumbrance equivalent to

the percentage interest in the acquired real estate company being granted, assigned, transferred,

conveyed, or vested). The tax imposed by this subsection shall be paid at the same time and in the

same manner as the tax imposed by subsection (a) and (b).

     (c)(d) In the event no consideration is actually paid for the lands, tenements, or realty, the

instrument or interest in an acquired real estate company of conveyance shall contain a statement

to the effect that the consideration is such that no documentary stamps are required.

     (d)(e) The tax shall be distributed as follows:

     (1) With respect to the tax imposed by subsection (a): the tax administrator shall contribute

to the distressed community relief program the sum of thirty cents ($.30) per two dollars and thirty

cents ($2.30) of the face value of the stamps to be distributed pursuant to § 45-13-12, and to the

housing resources and homelessness restricted receipt account established pursuant to § 42-128-2

the sum of thirty cents ($.30) per two dollars and thirty cents ($2.30) of the face value of the stamps.

The state shall retain sixty cents ($.60) for state use. The balance of the tax shall be retained by the

municipality collecting the tax.

     (2) With respect to the tax imposed by subsection (b): the tax administrator shall contribute

the entire tax to the housing production fund established pursuant to § 42-128-2.1.

     (3) With respect to the tax imposed by subsection (c): the tax administrator shall contribute

the entire tax to the Housing Resources and Homelessness restricted receipt account established

pursuant to § 42-128-2(3).

     (3)(4) Notwithstanding the above, in the case of the tax on the grant, transfer, assignment,

or conveyance or vesting with respect to an acquired real estate company, the tax shall be collected

by the tax administrator and shall be distributed to the municipality where the real estate owned by

the acquired real estate company is located; provided, however, in the case of any such tax collected

by the tax administrator, if the acquired real estate company owns property located in more than

one municipality, the proceeds of the tax shall be allocated amongst said municipalities in the

proportion the assessed value of said real estate in each such municipality bears to the total of the

assessed values of all of the real estate owned by the acquired real estate company in Rhode Island.

Provided, however, in fiscal years 2004 and 2005, from the proceeds of this tax, the tax

administrator shall deposit as general revenues the sum of ninety cents ($.90) per two dollars and

thirty cents ($2.30) of the face value of the stamps. The balance of the tax on the purchase of

property shall be retained by the municipality collecting the tax. The balance of the tax on the

transfer with respect to an acquired real estate company, shall be collected by the tax administrator

and shall be distributed to the municipality where the property for which interest is sold is

physically located. Provided, however, that in the case of any tax collected by the tax administrator

with respect to an acquired real estate company where the acquired real estate company owns

property located in more than one municipality, the proceeds of the tax shall be allocated amongst

the municipalities in proportion that the assessed value in any such municipality bears to the

assessed values of all of the real estate owned by the acquired real estate company in Rhode Island.

     (e)(f) For purposes of this section, the term “acquired real estate company” means a real

estate company that has undergone a change in ownership interest if (1) The change does not affect

the continuity of the operations of the company; and (2) The change, whether alone or together

with prior changes has the effect of granting, transferring, assigning, or conveying or vesting,

transferring directly or indirectly, 50% or more of the total ownership in the company within a

period of three (3) years. For purposes of the foregoing subsection (e)(f)(2), a grant, transfer,

assignment, or conveyance or vesting, shall be deemed to have occurred within a period of three

(3) years of another grant(s), transfer(s), assignment(s), or conveyance(s) or vesting(s) if during the

period the granting, transferring, assigning, or conveying party provides the receiving party a

legally binding document granting, transferring, assigning, or conveying or vesting the realty or a

commitment or option enforceable at a future date to execute the grant, transfer, assignment, or

conveyance or vesting.

     (f)(g) A real estate company is a corporation, limited liability company, partnership, or

other legal entity that meets any of the following:

     (1) Is primarily engaged in the business of holding, selling, or leasing real estate, where

90% or more of the ownership of the real estate is held by 35 or fewer persons and which company

either (i) derives 60% or more of its annual gross receipts from the ownership or disposition of real

estate; or (ii) owns real estate the value of which comprises 90% or more of the value of the entity’s

entire tangible asset holdings exclusive of tangible assets that are fairly transferrable and actively

traded on an established market; or

     (2) Ninety percent or more of the ownership interest in such entity is held by 35 or fewer

persons and the entity owns as 90% or more of the fair market value of its assets a direct or indirect

interest in a real estate company. An indirect ownership interest is an interest in an entity 90% or

more of which is held by 35 or fewer persons and the purpose of the entity is the ownership of a

real estate company.

     (g)(h) In the case of a grant, assignment, transfer, or conveyance or vesting that results in

a real estate company becoming an acquired real estate company, the grantor, assignor, transferor,

or person making the conveyance or causing the vesting, shall file or cause to be filed with the

division of taxation, at least five (5) days prior to the grant, transfer, assignment, or conveyance or

vesting, notification of the proposed grant, transfer, assignment, or conveyance or vesting, the price,

terms and conditions thereof, and the character and location of all of the real estate assets held by

the real estate company and shall remit the tax imposed and owed pursuant to subsection (a). Any

such grant, transfer, assignment, or conveyance or vesting which results in a real estate company

becoming an acquired real estate company shall be fraudulent and void as against the state unless

the entity notifies the tax administrator in writing of the grant, transfer, assignment, or conveyance

or vesting as herein required in subsection (g)(h) and has paid the tax as required in subsection (a).

Upon the payment of the tax by the transferor, the tax administrator shall issue a certificate of the

payment of the tax which certificate shall be recordable in the land evidence records in each

municipality in which such real estate company owns real estate. Where the real estate company

has assets other than interests in real estate located in Rhode Island, the tax shall be based upon the

assessed value of each parcel of property located in each municipality in the state of Rhode Island.

     SECTION 11. Section 44-31-2 of the General Laws in Chapter 44-31 entitled “Investment

Tax Credit” is hereby amended to read as follows:

     44-31-2. Specialized investment tax credit.

     (a) A certified building owner, as provided in chapter 64.7 of title 42, may be allowed a

specialized investment tax credit against the tax imposed by chapters 11, 14, 17 and 30 of this title.

     (b) The taxpayer may claim credit for the rehabilitation and reconstruction costs of a

certified building, which has been substantially rehabilitated. Once substantial rehabilitation is

established by the taxpayer, the taxpayer may claim credit for all rehabilitation and reconstruction

costs incurred with respect to the certified building within five (5) years from the date of final

designation of the certified building by the council pursuant to § 42-64.7-6.

     (c) The credit shall be ten percent (10%) of the rehabilitation and reconstruction costs of

the certified building. The credit shall be allowable in the year the substantially rehabilitated

certified building is first placed into service, which is the year in which, under the taxpayer’s

depreciation practice, the period for depreciation with respect to such property begins, or the year

in which the property is placed in a condition or state of readiness and availability for its specifically

assigned function, whichever is earlier.

     (d) The credit shall not offset any tax liability in taxable years other than the year or years

in which the taxpayer qualifies for the credit. The credit shall not reduce the tax below the

minimum. Amounts of unused credit for this taxpayer may be carried over and offset against this

taxpayer’s tax for a period not to exceed the following seven (7) taxable years.

     (e) In the case of a corporation, this credit is only allowed against the tax of that of a

corporation included in a consolidated return that qualifies for the credit and not against the tax of

other corporations that may join in the filing of a consolidated tax return.

     (f) Sunset. No credits shall be allowed under this section for tax years beginning on or after

January 1, 2026. Credits allowed for tax years ending on or before December 31, 2025, may be

carried forward into tax years beginning on or after January 1, 2026, in accordance with subsection

(d) of this section.

     SECTION 12. Sections 44-32-1, 44-32-2, and 44-32-3 of the General Laws in Chapter 44-

32 entitled “Elective Deduction for Research and Development Facilities” are hereby amended to

read as follows:

     44-32-1. Elective deduction against allocated entire net income.

     (a) General. Except as provided in subsection (c) of this section, at the election of a

taxpayer who is subject to the income tax imposed by chapters 11 or 30 of this title, there shall be

deducted from the portion of its entire net income allocated within the state the items prescribed in

subsection (b) of this section, in lieu of depreciation or investment tax credit.

     (b) One-year write-off of new research and development facilities.

     (1) Expenditures paid or incurred during the taxable year for the construction,

reconstruction, erection or acquisition of any new, not used, property as described in subsection (c)

of this section, which is used or to be used for purposes of research and development in the

experimental or laboratory sense. The purposes are not deemed to include the ordinary testing or

inspection of materials or products for quality control, efficiency surveys, management studies,

consumer surveys, advertising, promotion, or research in connection with literary, historical, or

similar projects. The deduction shall be allowed only on condition that the entire net income for

the taxable year and all succeeding taxable years is computed without the deduction of any

expenditures and without any deduction for depreciation of the property, except to the extent that

its basis may be attributable to factors other than the expenditures, (expenditures and depreciation

deducted for federal income tax purposes shall be added to the entire net income allocated to Rhode

Island), or in case a deduction is allowable pursuant to this subdivision for only a part of the

expenditures, on condition that any deduction allowed for federal income tax purposes on account

of the expenditures or on account of depreciation of the property is proportionately reduced in

computing the entire net income for the taxable year and all succeeding taxable years. Concerning

property that is used or to be used for research and development only in part, or during only part of

its useful life, a proportionate part of the expenditures shall be deductible. If all or part of the

expenditures concerning any property has been deducted as provided in this section, and the

property is used for purposes other than research and development to a greater extent than originally

reported, the taxpayer shall report the use in its report for the first taxable year during which it

occurs, and the tax administrator may recompute the tax for the year or years for which the

deduction was allowed, and may assess any additional tax resulting from the recomputation as a

current tax, within three (3) years of the reporting of the change to the tax administrator. Any

change in use of the property in whole or in part from that, which originally qualified the property

for the deduction, requires a recomputation. The tax administrator has the authority to promulgate

regulations to prevent the avoidance of tax liability.

     (2) The deduction shall be allowed only where an election for amortization of air or water

pollution control facilities has not been exercised in respect to the same property.

     (3) The tax as a result of recomputation of a prior year’s deduction is due as an additional

tax for the year the property ceases to qualify.

     (c) Property covered by deductions. The deductions shall be allowed only with respect

to tangible property which is new, not used, is depreciable pursuant to 26 U.S.C. § 167, was

acquired by purchase as defined in 26 U.S.C. § 179(d), has a situs in this state, and is used in the

taxpayer’s trade or business. For the taxable years beginning on or after July 1, 1974, a taxpayer is

not allowed a deduction under this section with respect to tangible property leased by it to any other

person or corporation or leased from any other person or corporation. For purposes of the preceding

sentence, any contract or agreement to lease or rent or for a license to use the property is considered

a lease, unless the contract or agreement is treated for federal income tax purposes as an installment

purchase rather than a lease. With respect to property that the taxpayer uses itself for purposes other

than leasing for part of a taxable year and leases for a part of a taxable year, the taxpayer shall be

allowed a deduction under this section in proportion to the part of the year it uses the property.

     (d) Entire net income. “Entire net income”, as used in this section, means net income

allocated to this state.

     (e) Carry-over of excess deductions. If the deductions allowable for any taxable year

pursuant to this section exceed the portion of the taxpayer’s entire net income allocated to this state

for that year, the excess may be carried over to the following taxable year or years, not to exceed

three (3) years, and may be deducted from the portion of the taxpayer’s entire net income allocated

to this state for that year or years.

     (f) Gain or loss on sale or disposition of property. In any taxable year when property is

sold or disposed of before the end of its useful life, with respect to which a deduction has been

allowed pursuant to subsection (b) of this section, the gain or loss on this entering into the

computation of federal taxable income is disregarded in computing the entire net income, and there

is added to or subtracted from the portion of the entire net income allocated within the state the

gain or loss upon the sale or other disposition. In computing the gain or loss, the basis of the

property sold or disposed of is adjusted to reflect the deduction allowed with respect to the property

pursuant to subsection (b) of this section; provided, that no loss is recognized for the purpose of

this subsection with respect to a sale or other disposition of property to a person whose acquisition

of this property is not a purchase as defined in 26 U.S.C. § 179(d).

     (g) Investment credit not allowed on research and development property. No

investment credit under chapter 31 of this title shall be allowed on the research and development

property for which accelerated write-off is adopted under this section.

     (h) Consolidated returns. The research and development deduction shall only be allowed

against the entire net income of the corporation included in a consolidated return and shall not be

allowed against the entire net income of other corporations that may join in the filing of a

consolidated state tax return.

     (i) Sunset. No deductions shall be allowed under this section for tax years beginning on or

after January 1, 2026. Deductions allowed for tax years ending on or before December 31, 2025,

may be carried forward into tax years beginning on or after January 1, 2026, in accordance with

subsection (e) of this section.

     44-32-2. Credit for research and development property acquired, constructed, or

reconstructed or erected after July 1, 1994.

     (a) A taxpayer shall be allowed a credit against the tax imposed by chapters 11, 17, or 30

of this title. The amount of the credit shall be ten percent (10%) of the cost or other basis for federal

income tax purposes of tangible personal property, and other tangible property, including buildings

and structural components of buildings, described in subsection (b) of this section; acquired,

constructed or reconstructed, or erected after July 1, 1994.

     (b) A credit shall be allowed under this section with respect to tangible personal property

and other tangible property, including buildings and structural components of buildings which are:

depreciable pursuant to 26 U.S.C. § 167 or recovery property with respect to which a deduction is

allowable under 26 U.S.C. § 168, have a useful life of three (3) years or more, are acquired by

purchase as defined in 26 U.S.C. § 179(d), have a situs in this state and are used principally for

purposes of research and development in the experimental or laboratory sense which shall also

include property used by property and casualty insurance companies for research and development

into methods and ways of preventing or reducing losses from fire and other perils. The credit shall

be allowable in the year the property is first placed in service by the taxpayer, which is the year in

which, under the taxpayer’s depreciation practice, the period for depreciation with respect to the

property begins, or the year in which the property is placed in a condition or state of readiness and

availability for a specifically assigned function, whichever is earlier. These purposes shall not be

deemed to include the ordinary testing or inspection of materials or products for quality control,

efficiency surveys, management studies, consumer surveys, advertising, promotions, or research in

connection with literary, historical or similar projects.

     (c) A taxpayer shall not be allowed a credit under this section with respect to any property

described in subsections (a) and (b) of this section, if a deduction is taken for the property under §

44-32-1.

     (d) A taxpayer shall not be allowed a credit under this section with respect to tangible

personal property and other tangible property, including buildings and structural components of

buildings, which it leases to any other person or corporation. For purposes of the preceding

sentence, any contract or agreement to lease or rent or for a license to use the property is considered

a lease.

     (e) The credit allowed under this section for any taxable year does not reduce the tax due

for that year, in the case of corporations, to less than the minimum fixed by § 44-11-2(e). If the

amount of credit allowable under this section for any taxable year is less than the amount of credit

available to the taxpayer, any amount of credit not credited in that taxable year may be carried over

to the following year or years, up to a maximum of seven (7) years, and may be credited against

the taxpayer’s tax for the following year or years. For purposes of chapter 30 of this title, if the

credit allowed under this section for any taxable year exceeds the taxpayer’s tax for that year, the

amount of credit not credited in that taxable year may be carried over to the following year or years,

up to a maximum of seven (7) years, and may be credited against the taxpayer’s tax for the

following year or years.

     (f)(1) With respect to property which is depreciable pursuant to 26 U.S.C. § 167 and which

is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit

is to be taken, the amount of the credit is that portion of the credit provided for in this section which

represents the ratio which the months of qualified use bear to the months of useful life. If property

on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its

useful life, the difference between the credit taken and the credit allowed for actual use must be

added back in the year of disposition. If the property is disposed of or ceases to be in qualified use

after it has been in qualified use for more than twelve (12) consecutive years, it is not necessary to

add back the credit as provided in this subdivision. The amount of credit allowed for actual use is

determined by multiplying the original credit by the ratio which the months of qualified use bear

to the months of useful life. For purposes of this subdivision, “useful life of property” is the same

as the taxpayer uses for depreciation purposes when computing his federal income tax liability.

     (2) Except with respect to that property to which subdivision (3) of this subsection applies,

with respect to three (3) year property, as defined in 26 U.S.C. § 168(c), which is disposed of or

ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken,

the amount of the credit shall be that portion of the credit provided for in this section which

represents the ratio which the months of qualified use bear to thirty-six (36). If property on which

credit has been taken is disposed of or ceases to be in qualified use prior to the end of thirty-six

(36) months, the difference between the credit taken and the credit allowed for actual use must be

added back in the year of disposition. The amount of credit allowed for actual use is determined by

multiplying the original credit by the ratio that the months of qualified use bear to thirty-six (36).

     (3) With respect to any recovery property to which 26 U.S.C. § 168 applies, which is a

building or a structural component of a building and which is disposed of or ceases to be in qualified

use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit

is that portion of the credit provided for in this section which represents the ratio which the months

of qualified use bear to the total number of months over which the taxpayer chooses to deduct the

property under 26 U.S.C. § 168. If property on which credit has been taken is disposed of or ceases

to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the

property under 26 U.S.C. § 168, the difference between the credit taken and the credit allowed for

actual use must be added back in the year of disposition. If the property is disposed of or ceases to

be in qualified use after it has been in qualified use for more than twelve (12) consecutive years, it

is not necessary to add back the credit as provided in this subdivision. The amount of credit allowed

for actual use is determined by multiplying the original credit by the ratio that the months of

qualified use bear to the total number of months over which the taxpayer chooses to deduct the

property under 26 U.S.C. § 168.

     (g) No deduction for research and development facilities under § 44-32-1 shall be allowed

for research and development property for which the credit is allowed under this section.

     (h) No investment tax credit under § 44-31-1 shall be allowed for research and development

property for which the credit is allowed under this section.

     (i) The investment tax credit allowed by § 44-31-1 shall be taken into account before the

credit allowed under this section.

     (j) The credit allowed under this section only allowed against the tax of that corporation

included in a consolidated return that qualifies for the credit and not against the tax of other

corporations that may join in the filing of a consolidated return.

     (k) In the event that the taxpayer is a partnership, joint venture or small business

corporation, the credit shall be divided in the same manner as income.

     (l) Sunset. No credits shall be allowed under this section for tax years beginning on or after

January 1, 2026. Credits allowed for tax years ending on or before December 31, 2025, may be

carried forward into tax years beginning on or after January 1, 2026, in accordance with subsection

(e) of this section.

     44-32-3. Credit for qualified research expenses.

     (a) A taxpayer shall be allowed a credit against the tax imposed by chapters 11, 17 or 30

of this title. The amount of the credit shall be five percent (5%)(and in the case of amounts paid or

accrued after January 1, 1998, twenty-two and one-half percent (22.5%) for the first twenty-five

thousand dollars ($25,000) worth of credit and sixteen and nine-tenths percent (16.9%) for the

amount of credit above twenty-five thousand dollars ($25,000)) of the excess, if any, of:

     (1) The qualified research expenses for the taxable year, over

     (2) The base period research expenses.

     (b)(1) “Qualified research expenses” and “base period research expenses” have the same

meaning as defined in 26 U.S.C. § 41; provided, that the expenses have been incurred in this state

after July 1, 1994.

     (2) Notwithstanding the provisions of subdivision (1) of this subsection, “qualified research

expenses” also includes amounts expended for research by property and casualty insurance

companies into methods and ways of preventing or reducing losses from fire and other perils.

     (c) The credit allowed under this section for any taxable year shall not reduce the tax due

for that year by more than fifty percent (50%) of the tax liability that would be payable, and in the

case of corporations, to less than the minimum fixed by § 44-11-2(e). If the amount of credit