2012 -- S 2200

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LC00563

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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: Senator V. Susan Sosnowski

     Date Introduced: January 24, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-18-12 of the General Laws in Chapter 44-18 entitled "Sales and

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

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     44-18-12. "Sale price" defined. -- (a) "Sales price" applies to the measure subject to

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sales tax and means the total amount of consideration, including cash, credit, property, and

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services, for which personal property or services are sold, leased, or rented, valued in money,

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whether received in money or otherwise, without any deduction for the following:

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      (i) The seller's cost of the property sold;

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      (ii) The cost of materials used, labor or service cost, interest, losses, all costs of

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transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

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      (iii) Charges by the seller for any services necessary to complete the sale, other than

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delivery and installation charges;

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      (iv) Delivery charges, as defined in section 44-18-7.1(i);

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      (v) Credit for any trade-in, as determined by state law;

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      (vi) The amount charged for package tour and scenic and sightseeing transportation

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services; or

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      (b) "Sales price" shall not include:

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      (i) Discounts, including cash, term, or coupons that are not reimbursed by a third party

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that are allowed by a seller and taken by a purchaser on a sale;

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      (ii) The amount charged for labor or services, except for package tours and scenic and

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sightseeing transportation services, rendered in installing or applying the property sold when the

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charge is separately stated by the retailer to the purchaser; provided that in transactions subject to

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the provisions of this chapter the retailer shall separately state such charge when requested by the

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purchaser and, further, the failure to separately state such charge when requested may be

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restrained in the same manner as other unlawful acts or practices prescribed in chapter 13.1 of

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title 6.

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      (iii) Interest, financing, and carrying charges from credit extended on the sale of personal

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property or services, if the amount is separately stated on the invoice, bill of sale or similar

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document given to the purchaser; and

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      (iv) Any taxes legally imposed directly on the consumer that are separately stated on the

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invoice, bill of sale or similar document given to the purchaser.

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      (v) Manufacturer rebates allowed on the sale of motor vehicles.

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      (vi) Consideration received by the retailer from the service provider in relation to the

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sale of the agreement for cellular telephone service.

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     (c) "Sales price" shall include consideration received by the seller from third parties if:

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      (i) The seller actually receives consideration from a party other than the purchaser and

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the consideration is directly related to a price reduction or discount on the sale;

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      (ii) The seller has an obligation to pass the price reduction or discount through to the

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purchaser;

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      (iii) The amount of the consideration attributable to the sale is fixed and determinable by

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the seller at the time of the sale of the item to the purchaser; and

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      (iv) One of the following criteria is met:

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      (A) The purchaser presents a coupon, certificate or other documentation to the seller to

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claim a price reduction or discount where the coupon, certificate or documentation is authorized,

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distributed or granted by a third party with the understanding that the third party will reimburse

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any seller to whom the coupon, certificate or documentation is presented;

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      (B) The purchaser identifies himself or herself to the seller as a member of a group or

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organization entitled to a price reduction or discount (a "preferred customer" card that is available

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to any patron does not constitute membership in such a group), or

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      (C) The price reduction or discount is identified as a third party price reduction or

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discount on the invoice received by the purchaser or on a coupon, certificate or other

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documentation presented by the purchaser.

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     SECTION 2. This act shall take effect upon passage.

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LC00563

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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 the sale price of a service agreement for cellular telephone

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service subject to the sales tax would not include consideration received by a cell phone retailer

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from a service provider.

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     This act would take effect upon passage.

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LC00563

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