2012 -- H 7674

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LC00924

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

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

COMPUTATION

     Introduced By: Representatives Kennedy, Williams, San Bento, E Coderre, and Lally

     Date Introduced: February 16, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes -

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

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     44-18-12.2. Gratuities pre-tax calculation. -- (a) In instances where a gratuity is a

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predetermined percentage, this percentage shall be calculated upon the total amount of sales, prior

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to the addition of any applicable taxes.

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     (b) Each food retailer or establishment shall separately indicate upon the invoice or

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receipt the total amount of sales for food and beverages, including, service charges, surcharges,

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and all other costs, excluding any applicable taxes, this amount shall be the pre-tax total.

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     (c) The pre-tax total shall be the basis upon which the gratuity shall be calculated.

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     (d) No consumer or retail customer shall pay sales tax on a predetermined gratuity.

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     (e) All applicable sales taxes shall be calculated on the pre-tax total as defined in this

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section.

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     SECTION 2. This act shall take effect upon passage.

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LC00924

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

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

COMPUTATION

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     This act would provide that in instances where a gratuity is a predetermined percentage,

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this percentage shall be calculated upon the total amount of sales, prior to the addition of any

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applicable taxes.

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     This act would take effect upon passage.

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LC00924

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