2012 -- H 8192

=======

LC02650

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND

COMPUTATION

     Introduced By: Representative Christopher R. Blazejewski

     Date Introduced: May 23, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 44-18-30B of the General Laws in Chapter 44-18 entitled "Sales

1-2

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

1-3

     44-18-30B. Exemption from sales tax for sales by writers, composers, artists --

1-4

Findings. -- (a) The general assembly makes the following findings of facts:

1-5

      (1) The downtown area of the city of Providence has been characterized by blighted

1-6

areas, and dilapidated and abandoned structures;

1-7

      (2) As a result, the downtown area has been designated an economic development zone

1-8

in order to stop the deterioration and stimulate economic activity;

1-9

      (3) The capitol center area of the city of Providence has become an attractive location,

1-10

especially with the construction of the Providence Place Mall;

1-11

      (4) In order to promote, revitalize and redevelop the "Old Downtown" area of the city of

1-12

Providence it is necessary to provide tax exemptions to this area as it has been designated as an

1-13

economic development zone;

1-14

      (5) In order to promote, revitalize, and redevelop the "Downtown or other industrial or

1-15

manufacturing buildings" located in the City of Pawtucket, it is necessary to provide tax

1-16

exemptions to this area as it has been designated as an economic development zone;

1-17

      (6) The development of an active artistic community, including "artists in residence", in

1-18

this area would promote economic development, revitalization, tourism, employment

1-19

opportunities, and encourage business development by providing alternative commercial

2-1

enterprises while in Providence creating a link between the Old Downtown and the Capital Center

2-2

Area;

2-3

      (7) There is a separate artistic community in the town of Westerly which is important to

2-4

preserve, promote, and revitalize, and which is distinct from that in the city of Providence;

2-5

      (8) There is a separate artistic community in the city of Woonsocket which is important

2-6

to promote and revitalize and which is distinct from that in the cities of Providence and Pawtucket

2-7

and the town of Westerly;

2-8

      (9) There is a separate artistic community in the city of Warwick which is important to

2-9

preserve, promote, and revitalize and which is distinct from that in the cities of Providence,

2-10

Pawtucket, Woonsocket and the town of Westerly;

2-11

      (10) There are separate artistic communities in the city of Newport and in the town of

2-12

Tiverton which are important to promote and revitalize and which are distinct from those in the

2-13

cities of Providence, Pawtucket, Warwick and Woonsocket and the towns of Westerly and Little

2-14

Compton;

2-15

      (11) There is a separate artistic community in the town of Warren which is important to

2-16

promote and revitalize and which is distinct from that in the cities of Providence, Pawtucket,

2-17

Newport, Warwick and Woonsocket and the towns of Westerly and Tiverton.

2-18

      (b) (1) This section only applies to sales by writers, composers and artists residing in and

2-19

conducting a business within a section of the defined economic development zone in the cities of

2-20

Providence or Pawtucket, or the defined economic development zone in the town of Westerly or

2-21

the defined economic zone in the city of Woonsocket, or the defined economic zone in the city of

2-22

Warwick, or in those areas within the city of Newport, and the town of Little Compton, which are

2-23

zoned "general business," "waterfront business," or "limited business" or have been designated

2-24

by the city of Newport as part of the arts district, or in those areas of the town of Warren which

2-25

are zoned "waterfront district," "special district," "village business district," "manufacturing

2-26

district," "business district" or "Warren historic district," or in those areas of the town of Tiverton

2-27

which are zoned "business commercial," "business waterfront" or "village commercial." For the

2-28

purposes of this section, a "work" means an original and creative work, whether written,

2-29

composed or executed for "one-of-a-kind limited" production and which falls into one of the

2-30

following categories:

2-31

      (i) A book or other writing;

2-32

      (ii) A play or the performance of said play;

2-33

      (iii) A musical composition or the performance of said composition;

3-34

      (iv) A painting or other like picture;

3-35

      (v) A sculpture;

3-36

      (vi) Traditional and fine crafts;

3-37

      (vii) The creation of a film or the acting within the film;

3-38

      (viii) The creation of a dance or the performance of the dance.

3-39

      (2) For the purposes of this section, a "work" includes any product generated as a result

3-40

of any of the above categories.

3-41

      (3) For the purposes of this section, a "work" does not apply to any piece or performance

3-42

created or executed for industry oriented or related production.

3-43

      (c) (1) This section applies to sales by any individual:

3-44

      (i) Who is a resident of and has a principal place of business situated in the section of the

3-45

economic development zone designated as the arts and entertainment district in the downtown

3-46

area of the city of Providence or in the city of Pawtucket, or the defined economic development

3-47

zone in the town of Westerly or the defined economic zone in the city of Woonsocket, or the

3-48

defined economic zone in the city of Warwick, or who is a resident of and has a principal place of

3-49

business situated in those areas within the city of Newport or the town of Little Compton, which

3-50

are zoned "general business," "waterfront business," or "limited business," or have been

3-51

designated by the city of Newport as part of the arts district, or who is a resident of and has a

3-52

principal place of business situated in those areas within the town of Warren which are zoned

3-53

"waterfront district," "special district," "village business district," "manufacturing district,"

3-54

"business district" or "Warren historic district," or who is a resident or has a principal place of

3-55

business situated in those areas within the town of Tiverton which are zoned "business

3-56

commercial," "business waterfront" or "village commercial." For the purposes of this section, the

3-57

Providence arts and entertainment district in Providence is defined as the area bounded by Pine

3-58

Street to the southeast, Dorrance Street Memorial Boulevard to the northeast, Sabin Street and

3-59

Exchange Terrace to the northwest and Empire Street to the southwest. Said Providence arts and

3-60

entertainment district also includes the area beginning at the point of intersection of Acorn Street

3-61

and Harris Avenue, then turning east onto Atwells Avenue to Service Road 7, then turning

3-62

southerly onto Service Road 7 to Westminster Street, then turning westerly onto Westminster

3-63

Street, continuing until Bridgham, then turning south onto Bridgham to Cranston Street, then

3-64

turning southwesterly onto Cranston Street, then continuing to Messer Street, then turning north

3-65

onto Messer Street to Westminster Street, turning west onto Westminster Street to US Hwy 6 off

3-66

ramp, then heading west on US Hwy 6 to Sheridan Street, then heading northeast on Sheridan

3-67

Street to Aleppo Street, then turning southeast along Aleppo Street to Pelham Street, then heading

3-68

northeast on Pelham Street to Manton Avenue, then continuing southeast on Manton Avenue until

4-1

Delaine Street, then heading northeast on Delaine Street until Appleton Street, then continuing

4-2

northwesterly on Appleton Street until Bowdoin Street, then heading north on Bowdoin Street

4-3

until Barstow Street, then heading east on Barstow until Valley Street, then heading northeast on

4-4

Valley Street to Hemlock Street, then turning southeast on Hemlock Street until Promenade

4-5

Street, then heading east on Promenade Street to Acorn Street, then heading south on Acorn

4-6

Street to the intersection of Acorn Street and Harris Avenue. The named streets are included in

4-7

the Providence district; and in Pawtucket is defined as the area beginning at the point of

4-8

intersection of Dexter Street and the Central Falls line, then east along the Central Falls line to the

4-9

Blackstone River, then north along the city boundary on the Blackstone River to the Cumberland

4-10

line, then west along the Pawtucket city boundary line to I-95, then south along I-95 to Pine

4-11

Street, then north on Pine Street to AMTRAK Right of Way, then northwest along the AMTRAK

4-12

Right of Way to Dexter Street, then north on Dexter Street to the Central Falls line. The named

4-13

streets are included in the district. The Westerly arts and entertainment district is defined as

4-14

assessor's plat 56, lots 1 through 24, lot 48, lots 50 through 62, and lots 71 through 82, and

4-15

assessors plat 66, lots 22 through 26, and lots 29 through 36 the Woonsocket arts and

4-16

entertainment district is defined as the area beginning at a point of land on the southwest bank of

4-17

the Blackstone River abutting the bridge for the Providence & Worcester Railroad and

4-18

proceeding northerly to a point at the intersection of Worrall Street, Clinton Street and Harry S.

4-19

Truman Drive, then proceeding northwesterly along Worrall Street to its intersection with Social

4-20

Street, then turning westerly on Social Street proceeding to its intersection with Main Street,

4-21

Blackstone Street and North Main Street, then turning northwesterly and proceeding along

4-22

Blackstone Street to its intersection with River Street, then turning northerly and proceeding

4-23

along River Street to its intersection with the north/east bank of Blackstone River, then following

4-24

the riverbank southerly to the bridge at Bernon Street and turning easterly crossing the Blackstone

4-25

River via Bernon Street and proceeding to its intersection with Front Street, then turning

4-26

northeasterly on Front Street and proceeding to its intersection with Hamlet Avenue, and to

4-27

include the former courthouse on the southerly side of Front Street at its intersection with Hamlet

4-28

Avenue, then turning easterly on Hamlet Avenue and proceeding to its intersection with Manville

4-29

Road, then turning southeasterly on Manville Road and proceeding to its intersection with

4-30

Davison Avenue, then turning northeasterly on Davison Avenue and proceeding to a point on the

4-31

south/west bank of the Blackstone River, then turning northerly, following the southerly

4-32

riverbank to the point of beginning. The abovementioned streets are included in the district. The

4-33

Warwick arts district is defined as that area known as Pontiac Village, beginning on Route 5 at

4-34

the Warwick/Cranston municipal boundary, then south to the intersection of Route 5 and the

5-1

Pawtuxet River, then following the Pawtuxet River in an easterly and northerly direction to the

5-2

municipal boundary in the vicinity of Knight Street, then from the intersection of Knight Street

5-3

and the municipal boundary westerly along the Warwick/Cranston municipal boundary to the

5-4

intersection of Route 5 and Greenwich Avenue. The above named streets are included in the

5-5

district.

5-6

      (ii) Who is determined by the tax administrator, after consideration of any evidence he or

5-7

she deems necessary or which is submitted to him or her by the individual, to have written,

5-8

composed, or executed, either solely or jointly, a work or works which would fall into one of the

5-9

categories listed in subsection (b)(1).

5-10

      (2) This section also applies to sales by any other gallery located in the arts and

5-11

entertainment district described in subsection (c)(1)(i) as well as any other arts and entertainment

5-12

district designated by the general assembly, as well as to sales by any other gallery located in

5-13

those areas within the city of Newport, or the town of Little Compton, which are zoned "general

5-14

business," "waterfront business," or "limited business" or have been designated by the city of

5-15

Newport as part of the arts district, as well as to sales by any other gallery located in those areas

5-16

within the town of Warren which are zoned "waterfront district," "special district," "village

5-17

business district," "manufacturing district," "business district" or "Warren historic district," as

5-18

well as to sales by any other gallery located in those areas within the town of Tiverton which are

5-19

zoned "business commercial," "business waterfront" or "village commercial."

5-20

      (3) The tax administrator shall not make a determination unless:

5-21

      (i) The individual(s) concerned duly make(s) an application to the tax administrator for

5-22

the sales tax exemption which applies to the works defined in this section; and

5-23

      (ii) The individual has complied and continues to comply with any and all requests made

5-24

by the tax administrator.

5-25

      (d) Any individual to whom this section applies and who makes an application to the tax

5-26

administrator is entitled to a sales tax exemption for the sale of a work or works sold from the

5-27

individual's business located in the economic development zone which would, apart from this

5-28

section, be subject to the tax rate imposed by the state of Rhode Island.

5-29

      (e) When an individual makes a request for the exemption, the tax administrator is

5-30

entitled to all books, documents, or other evidence relating to the publication, production or

5-31

creation of the works that may be deemed necessary by the tax administrator for the purposes of

5-32

the exemption. The time period in which to provide this information is in the sole discretion of

5-33

the tax administrator and specified in the notice.

6-34

      (f) In addition to the information required in subsection (e), the tax administrator may

6-35

require the individual(s) to submit an annual certified accounting of the numbers of works sold,

6-36

the type of work sold, and the date of the sale. Failure to file this report may, in the sole discretion

6-37

of the tax administrator, terminate the individual's eligibility for the exemption.

6-38

      (g) Any person storing, using, or otherwise consuming in this state any work or works

6-39

which is deemed to be exempt from the sales tax pursuant to this section is not liable for the use

6-40

tax on the work or works.

6-41

      (h) Notwithstanding the provisions of this section, any individual to whom this section

6-42

may apply shall comply with all the administration, collection, and other provisions of chapters

6-43

18 and 19 of this title.

6-44

     SECTION 2. Section 44-30-1.1 of the General Laws in Chapter 44-30 entitled "Personal

6-45

Income Tax" is hereby amended to read as follows:

6-46

     44-30-1.1. Exemption from tax for writers, composers and artists. -- (a) This section

6-47

shall only apply to writers, composers and artists residing within a section of the defined

6-48

economic development zone within the city of Providence, Pawtucket, Woonsocket or Warwick,

6-49

or the economic development zone within the town of Westerly as defined in section 44-18-

6-50

30B(c)(1)(i), or within the city of Newport or within the town of Tiverton or the town of Little

6-51

Compton, or within those areas of the town of Warren which are zoned "waterfront district,"

6-52

"special district," "village business district," "manufacturing district," "business district" or

6-53

"Warren historic district", or a tax pass-through entity wholly owned by one or more such

6-54

individuals and who create such work while residing in the zone, or in the case of Newport or the

6-55

town of Little Compton, within those areas of the city or town which are zoned "general

6-56

business," "waterfront business" or "limited business" or have been designated by the city of

6-57

Newport as part of the arts district, or in the case of Warren, within those areas of the town which

6-58

are zoned "waterfront district," "special district," "village business district," "manufacturing

6-59

district," "business district" or "Warren historic district," or in the case of Tiverton with those

6-60

areas of the town which are zoned "business commercial," "business waterfront" or "village

6-61

commercial." For the purposes of this section, a "work" means an original and creative work,

6-62

whether written, composed, created or executed for "one-of-a-kind, limited" production, before or

6-63

after the passing of this section, which falls into one of the following categories: (1) a book or

6-64

other writing; (2) a play or the performance of said play; (3) a musical composition or the

6-65

performance of said composition; (4) a painting or other like picture; (5) a sculpture; (6)

6-66

traditional and fine crafts; (7) the creation of a film or the acting of said film; (8) the creation of a

6-67

dance or the performance of said dance. For purposes of this section, a "work" does not apply to

6-68

any piece or performance created or executed for industry oriented or related production.

7-1

      (b) (1) This section shall apply to any individual:

7-2

      (i) Who is a resident within the section of the economic development zone designated as

7-3

the arts and entertainment district in the downtown areas of the cities of Providence, Woonsocket

7-4

or Pawtucket, and deriving the income exempted from within said district while a resident of said

7-5

zone, or who is a resident within the section of the arts and entertainment district in the town of

7-6

Westerly, as defined in section 44-18-30B(c)(1)(i) and who derives the income exempted from

7-7

within said district while a resident of said zone. For the purposes of this section, the "Providence

7-8

arts and entertainment district" is defined as the area bounded by Pine Street to the southeast,

7-9

Dorrance Street Memorial Boulevard to the northeast, Sabin Street and Exchange Terrace to the

7-10

northwest and Empire Street to the southwest. Said Providence arts and entertainment district also

7-11

includes the area beginning at the point of intersection of Acorn Street and Harris Avenue, then

7-12

turning east onto Atwells Avenue to Service Road 7, then turning southerly onto Service Road 7

7-13

to Westminster Street, then turning westerly onto Westminster Street, continuing until Bridgham,

7-14

then turning south onto Bridgham to Cranston Street, then turning southwesterly onto Cranston

7-15

Street, then continuing to Messer Street, then turning north onto Messer Street to Westminster

7-16

Street, turning west onto Westminster Street to US Hwy 6 off ramp, then heading west on US

7-17

Hwy 6 to Sheridan Street, then heading northeast on Sheridan Street to Aleppo Street, then

7-18

turning southeast along Aleppo Street to Pelham Street, then heading northeast on Pelham Street

7-19

to Manton Avenue, then continuing southeast on Manton Avenue until Delaine Street, then

7-20

heading northeast on Delaine Street until Appleton Street, then continuing northwesterly on

7-21

Appleton Street until Bowdoin Street, then heading north on Bowdoin Street until Barstow Street,

7-22

then heading east on Barstow until Valley Street, then heading northeast on Valley Street to

7-23

Hemlock Street, then turning southeast on Hemlock Street until Promenade Street, then heading

7-24

east on Promenade Street to Acorn Street, then heading south on Acorn Street to the intersection

7-25

of Acorn Street and Harris Avenue. The abovementioned streets shall be included in the district.

7-26

The "Westerly arts and entertainment district" is defined in section 44-18-30B(c)(1)(i). The

7-27

"Pawtucket arts and entertainment district" shall be defined as the area beginning at the point of

7-28

intersection of Dexter Street and the Central Falls line, then east along the Central Falls Line to

7-29

the Blackstone River, then north along the city boundary on the Blackstone River to the

7-30

Cumberland line, then west along the Pawtucket city boundary line to I-95, then south along I-95

7-31

to Pine Street, then north on Pine Street to AMTRAK Right of Way, then northwest along the

7-32

AMTRAK Right of Way to Dexter Street, then north on Dexter Street to the Central Falls line.

7-33

The abovementioned streets shall be included in the district. The "Woonsocket arts and

7-34

entertainment district" shall be defined as the area beginning at a point of land on the southwest

8-1

bank of the Blackstone River abutting the bridge for the Providence & Worcester Railroad and

8-2

proceeding northerly to a point at the intersection of Worrall Street, Clinton Street and Harry S.

8-3

Truman Drive, then proceeding northwesterly along Worrall Street to its intersection with Social

8-4

Street, then turning westerly on Social Street proceeding to its intersection with Main Street,

8-5

Blackstone Street and North Main Street, then turning northwesterly and proceeding along

8-6

Blackstone Street to its intersection with River Street, then turning northerly and proceeding

8-7

along River Street to its intersection with the northeast bank of Blackstone River, then following

8-8

the riverbank southerly to the bridge at Bernon Street and turning easterly crossing the Blackstone

8-9

River via Bernon Street and proceeding to its intersection with Front Street, then turning

8-10

northeasterly on Front Street and proceeding to its intersection with Hamlet Avenue, and to

8-11

include the former Courthouse on the southerly side of Front Street at its intersection with Hamlet

8-12

Avenue, then turning easterly on Hamlet Avenue and proceeding to its intersection with Manville

8-13

Road, then turning southeasterly on Manville Road and proceeding to its intersection with

8-14

Davison Avenue, then turning northeasterly on Davison Avenue and proceeding to a point on the

8-15

southwest bank of the Blackstone River, then turning northerly, following the southerly riverbank

8-16

to the point of beginning. The abovementioned streets are included in the district. The Warwick

8-17

arts district is defined as that area known as Pontiac Village, beginning on Route 5 at the

8-18

Warwick/Cranston municipal boundary, then south to the intersection of Route 5 and the

8-19

Pawtuxet River, then following the Pawtuxet River in an easterly and northerly direction to the

8-20

municipal boundary in the vicinity of Knight Street, then from the intersection of Knight Street

8-21

and the municipal boundary westerly along the Warwick/Cranston municipal boundary to the

8-22

intersection of Route 5 and Greenwich Avenue. The above named streets are included in the

8-23

district.

8-24

      This section shall also apply to any individual who is a resident of the city of Newport or

8-25

the town of Tiverton or the town of Little Compton and whose income otherwise qualifies for an

8-26

exemption as provided for in this section.

8-27

      This section shall also apply to any individual who is a resident of the town of Warren

8-28

and whose income otherwise qualifies for an exemption as provided for in this section.

8-29

      (ii) Who is determined by the tax administrator, after consideration of any evidence in

8-30

relation to the matter which the individual submits to him or her and after such consultation as

8-31

may seem to him or her to be necessary with such person or body of persons as in his or her

8-32

opinion may be of assistance to him or her, to have written, composed or executed either solely or

8-33

jointly with another individual, a work or works that would fall into one of the categories listed in

8-34

subsection (a) of this section.

9-1

      (c) (1) An individual to whom this section applies and who duly makes a claim to the tax

9-2

administrator in that behalf shall, subject to subdivision (2) of this subsection, be entitled to have

9-3

the profits or gains arising to him or her from the publication, production or sale of a work or

9-4

works in relation to which the tax administrator has made a determination under paragraph

9-5

(b)(1)(ii) of this section to be taken as a modification reducing federal adjusted gross income.

9-6

      (2) The modification authorized by this section shall apply to the year in which the profit

9-7

or gain from the publication, production or sale of a work is realized.

9-8

      (d) The tax administrator may serve on an individual who makes a claim under this

9-9

subsection a notice or notices, in writing, requiring him or her to make available within any time

9-10

that may be specified in the notice of all such books, accounts and documents in his or her

9-11

possession or power as may be requested, being books, accounts and documents relating to the

9-12

publication, production or sale of the work in respect of the profits or gains of which exemption is

9-13

claimed.

9-14

      (e) For the purpose of determining the amount of profits or gains subject to modification

9-15

under this section, the tax administrator may make any apportionment of receipts and expenses

9-16

that may be necessary.

9-17

      (f) Notwithstanding any other provisions of this chapter, any individual seeking relief

9-18

under this section shall file a Rhode Island personal income tax return listing the modification

9-19

reducing federal adjusted gross income relating to profits or gains realized from the works as

9-20

defined in this section.

9-21

     SECTION 3. This act shall take effect upon passage.

=======

LC02650

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND

COMPUTATION

***

10-1

     This act would amend the boundaries of the “Providence arts and entertainment district.”

10-2

     This act would take effect upon passage.

=======

LC02650

=======