2025 -- H 5784

========

LC001282

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

____________

A N   A C T

     RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND

COMPUTATION

     Introduced By: Representatives Carson, Cortvriend, Spears, McEntee, Azzinaro,
Kennedy, Fogarty, Tanzi, McGaw, and Edwards

     Date Introduced: February 26, 2025

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-18-7.3 and 44-18-36.1 of the General Laws in Chapter 44-18

entitled "Sales and Use Taxes — Liability and Computation" are hereby amended to read as

follows:

     44-18-7.3. Services defined.

     (a) “Services” means all activities engaged in for other persons for a fee, retainer,

commission, or other monetary charge, which activities involve the performance of a service in this

state as distinguished from selling property.

     (b) The following businesses and services performed in this state, along with the applicable

2017 North American Industrial Classification System (NAICS) codes, are included in the

definition of services:

     (1) Taxicab and limousine services including but not limited to:

     (i) Taxicab services including taxi dispatchers (485310); and

     (ii) Limousine services (485320).

     (2) Other road transportation service including but not limited to:

     (i) Charter bus service (485510);

     (ii) “Transportation network companies” (TNC) defined as an entity that uses a digital

network to connect transportation network company riders to transportation network operators who

provide prearranged rides. Any TNC operating in this state is a retailer as provided in § 44-18-15

and is required to file a business application and registration form and obtain a permit to make sales

at retail with the tax administrator, to charge, collect, and remit Rhode Island sales and use tax; and

     (iii) All other transit and ground passenger transportation (485999).

     (3) Pet care services (812910) except veterinary and testing laboratories services.

     (4)(i) “Room reseller” or “reseller” means any person, except a tour operator as defined in

§ 42-63.1-2, having any right, permission, license, or other authority from or through a hotel as

defined in § 42-63.1-2, to reserve, or arrange the transfer of occupancy of, accommodations the

reservation or transfer of which is subject to this chapter, such that the occupant pays all or a portion

of the rental and other fees to the room reseller or reseller. Room reseller or reseller shall include,

but not be limited to, sellers of travel packages as defined in this section and any hosting platform

as defined in § 42-63.1-2 and any marketing organization that reserves or arranges the transfer of

occupancy or accommodations the reservation or transfer of which is subject to this chapter.

Notwithstanding the provisions of any other law, where said reservation or transfer of occupancy

is done using a room reseller or reseller, the application of the sales and use tax under §§ 44-18-18

and 44-18-20, and the hotel tax under § 44-18-36.1 shall be as follows: The room reseller or reseller

is required to register with, and shall collect and pay to, the tax administrator the sales and use and

hotel taxes, with said taxes being calculated upon the amount of rental and other fees paid by the

occupant to the room reseller or reseller, less the amount of any rental and other fees paid by the

room reseller or reseller to the hotel. The hotel shall collect and pay to the tax administrator said

taxes upon the amount of rental and other fees paid to the hotel by the room reseller or reseller

and/or the occupant. No assessment shall be made by the tax administrator against a hotel because

of an incorrect remittance of the taxes under this chapter by a room reseller or reseller. No

assessment shall be made by the tax administrator against a room reseller or reseller because of an

incorrect remittance of the taxes under this chapter by a hotel. If the hotel has paid the taxes imposed

under this chapter, the occupant and/or room reseller or reseller, as applicable, shall reimburse the

hotel for said taxes. If the room reseller or reseller has paid said taxes, the occupant shall reimburse

the room reseller or reseller for said taxes. Each hotel and room reseller or reseller shall add and

collect, from the occupant or the room reseller or the reseller, the full amount of the taxes imposed

on the rental and other fees. When added to the rental and other fees, the taxes shall be a debt owed

by the occupant to the hotel or room reseller or reseller, as applicable, and shall be recoverable at

law in the same manner as other debts. The amount of the taxes collected by the hotel and/or room

reseller or reseller from the occupant under this chapter shall be stated and charged separately from

the rental and other fees, and shall be shown separately on all records thereof, whether made at the

time the transfer of occupancy occurs, or on any evidence of the transfer issued or used by the hotel

LC001282 - Page 2 of 6

or the room reseller or the reseller. A room reseller or reseller shall not be required to disclose to

the occupant the amount of tax charged by the hotel; provided, however, the room reseller or

reseller shall represent to the occupant that the separately stated taxes charged by the room reseller

or reseller include taxes charged by the hotel. No person shall operate a hotel in this state, or act as

a room reseller or reseller for any hotel in the state, unless the tax administrator has issued a permit

pursuant to § 44-19-1.

     (ii) “Travel package” means a room, or rooms, bundled with one or more other, separate

components of travel such as air transportation, car rental, or similar items, which travel package

is charged to the customer or occupant for a single, retail price. When the room occupancy is

bundled for a single consideration, with other property, services, amusement charges, or any other

items, the separate sale of which would not otherwise be subject to tax under this chapter, the entire

single consideration shall be treated as the rental or other fees for room occupancy subject to tax

under this chapter; provided, however, that where the amount of the rental, or other fees for room

occupancy is stated separately from the price of such other property, services, amusement charges,

or other items, on any sales slip, invoice, receipt, or other statement given the occupant, and such

rental and other fees are determined by the tax administrator to be reasonable in relation to the

value of such other property, services, amusement charges, or other items, only such separately

stated rental and other fees will be subject to tax under this chapter. The value of the transfer of any

room, or rooms, bundled as part of a travel package may be determined by the tax administrator

from the room reseller’s and/or reseller’s and/or hotel’s books and records that are kept in the

regular course of business.

     (5) Investigation, Guard, and Armored Car Services (561611, 561612 & 561613).

     (c) All services as defined herein are required to file a business application and registration

form and obtain a permit to make sales at retail with the tax administrator, to charge, collect, and

remit Rhode Island sales and use tax.

     (d) The tax administrator is authorized to promulgate rules and regulations in accordance

with the provisions of chapter 35 of title 42 to carry out the provisions, policies, and purposes of

this chapter.

     44-18-36.1. Hotel tax. Hotel, house and condominium rental tax.

     (a) There is imposed a hotel tax and house and condominium rental tax of five percent (5%)

upon the total consideration charged for occupancy of any space furnished for the rental of a house

or condominium or 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

LC001282 - Page 3 of 6

dwelling is rented in its entirety. The hotel tax imposed by the provisions of this section is in

addition to any sales tax imposed. This hotel The tax is imposed by the provisions of this section

shall be 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 for taxes imposed pursuant to the provisions of

this section, shall be made pursuant to chapter 63.1 of title 42 rather than chapter 84 of the public

laws of 1980.

     (1) All sums received by the division of taxation from the tax imposed pursuant to the

provisions of this section for the rental of a house or condominium, including penalties, 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 house or condominium is located.

     (2) All sums collected pursuant to subsection (a)(1) of this section shall be used exclusively

for municipal infrastructure improvements, riverine and coastal resiliency and housing.

     (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) of this section.

     (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) 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 tax imposed by

subsection (a) of this section.

     (1) Within ten (10) days of collection of the tax, the city of Newport shall distribute the tax

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 collected, the city of Newport shall submit to the division of taxation

a report of the tax 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 taxes pursuant to chapter 44-19, and the amount of any hotel tax, penalty and

LC001282 - Page 4 of 6

interest imposed by the city of Newport until collected constitutes a lien on the real property of the

taxpayer.

     SECTION 2. This act shall take effect upon passage.

========

LC001282

========

LC001282 - Page 5 of 6

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

     RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND

COMPUTATION

***

     This act would include "hosting platform" under the definition of "room-seller" and would

impose a tax of five percent (5%) upon the rental of a house or condominium. The funds from the

tax would be used exclusively for infrastructure improvements, riverine and coastal resiliency and

housing.

     This act would take effect upon passage.

========

LC001282

========

LC001282 - Page 6 of 6