2013 -- S 0182

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LC00590

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND

COMPUTATION - PERSONAL INCOME TAX

     Introduced By: Senators Doyle, Nesselbush, and Crowley

     Date Introduced: February 06, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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

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

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

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

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

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areas, and dilapidated and abandoned structures;

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

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in order to stop the deterioration and stimulate economic activity;

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

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especially with the construction of the Providence Place Mall;

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

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

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economic development zone;

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

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

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

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

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

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opportunities, and encourage business development by providing alternative commercial

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

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Area;

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

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

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

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

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and the town of Westerly;

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

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

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Pawtucket, Woonsocket and the town of Westerly;

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

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

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

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Compton;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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following categories:

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      (i) A book or other writing;

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

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

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      (iv) A painting or other like picture;

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      (v) A sculpture;

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      (vi) Traditional and fine crafts;

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

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

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

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of any of the above categories.

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

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created or executed for industry oriented or related production.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Street to the southeast, Dorrance Street to the northeast, Sabin Street to the northwest and Empire

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Street to the southwest. Said Providence arts and entertainment district also includes the area

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beginning at the point of intersection of Acorn Street and Harris Avenuenue Avenue, then turning

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

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Road 7 to Westminster Street, then turning westerly onto Westminster Street, continuing until

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

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

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

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

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

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

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

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

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

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

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

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of Acorn Street and Harris Avenuenue Avenue. The named streets are included in the Providence

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

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Street and the Central Falls line, then east along the Central Falls line to the Blackstone River,

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

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along the Pawtucket city boundary line to I-95, then south along I-95 to Pine Street, then north on

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

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Dexter Street, then north on Dexter Street to the Central Falls line. Said Pawtucket arts and

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entertainment district also includes the area beginning at a point in the intersection of Dexter

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Street and the Pawtucket/Central Falls city boundary; then continuing westerly along

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Pawtucket/Central Falls city boundary to the intersection of Pine Street; then continuing southerly

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along Pine Street to the intersection of Conant Street; then continuing southwesterly along Conant

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Street to the Intersection of Weeden Street; then continuing west along Weeden Street to the

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intersection of New Street; then continuing southerly along New Street to the intersection of

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Fairlawn Avenue; then continuing southerly along Fairlawn Avenue to the intersection of Mineral

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Spring Avenue; then continuing east along Mineral Spring Avenue to the intersection of San

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Antonio Way; then continuing southeasterly along San Antonio Way to the intersection of Grotto

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Avenue; then continuing east along Grotto Avenue to the intersection with the Moshassuck River;

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then continuing south along the Moshassuck River to the intersection with I-95; then continuing

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south along I-95 to the intersection with the Pawtucket/Providence city boundary; then continuing

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east along the Pawtucket/Providence city boundary to the intersection of the Moshassuck River;

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then continuing north along the Moshassuck River to the intersection of Grenville Street; then

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continuing east along Grenville Street to the intersection of Main Street; then continuing south

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along Main Street to the intersection of Pawtucket Avenue; then continuing northeast along

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Pawtucket Avenue to the intersection of Glenwood Avenue; then continuing northwest along

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Glenwood Avenue to the intersection of West Avenue; then continuing northeast along West

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Avenue to the intersection of Trenton Street; then continuing west along Trenton Street to the

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intersection of Main Street; then continuing south along Main Street to a point approximately

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eighty-three feet (83') feet south from the southerly line of Campbell Terrace; then west and north

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along the rear property lines of those properties fronting Campbell Terrace to the intersection of

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Dudley Street (now abandoned); then east along a portion of Dudley Street (now abandoned) and

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Dudley Street to the intersection of Main Street; then continuing north along Main Street to the

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intersection of Warren Avenue; then continuing west along Warren Avenue to the intersection of

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Esten Avenue; then continuing north along Esten Avenue to the intersection of Barnes Street;

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then continuing northwest across I-95 to the Providence and Worcester Railroad right-of-way;

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then continuing north along the Providence Worcester Railroad right-of-way to the intersection of

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Mineral Spring Avenue; then continuing east along Mineral Spring Avenue to the intersection of

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Pine Street; then continuing north along Pine Street to the intersection of Goff Avenue; then

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continuing east along Goff Avenue to the intersection of Dexter Street; then continuing north

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along Dexter Street to the intersection with the Pawtucket/ Central Falls city boundary, also being

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the point and place of beginning; excluding the Mineral Spring Avenue Cemetery that is a

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National Register Historic District. The named streets are included in the district. The Westerly

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arts and entertainment district is defined as assessor's plat 56, lots 1 through 24, lot 48, lots 50

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through 62, and lots 71 through 82, and assessors plat 66, lots 22 through 26, and lots 29 through

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36 the Woonsocket arts and entertainment district is defined as the area beginning at a point of

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land on the southwest bank of the Blackstone River abutting the bridge for the Providence &

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Worcester Railroad and proceeding northerly to a point at the intersection of Worrall Street,

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Clinton Street and Harry S. Truman Drive, then proceeding northwesterly along Worrall Street to

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

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intersection with Main Street, Blackstone Street and North Main Street, then turning

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northwesterly and proceeding along Blackstone Street to its intersection with River Street, then

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turning northerly and proceeding along River Street to its intersection with the north/east bank of

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Blackstone River, then following the riverbank southerly to the bridge at Bernon Street and

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turning easterly crossing the Blackstone River via Bernon Street and proceeding to its intersection

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with Front Street, then turning northeasterly on Front Street and proceeding to its intersection

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with Hamlet Avenue, and to include the former courthouse on the southerly side of Front Street at

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

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

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to its intersection with Davison Avenue, then turning northeasterly on Davison Avenue and

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proceeding to a point on the south/west bank of the Blackstone River, then turning northerly,

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following the southerly riverbank to the point of beginning. The abovementioned streets are

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included in the district. The Warwick arts district is defined as that area known as Pontiac

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Village, beginning on Route 5 at the Warwick/Cranston municipal boundary, then south to the

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intersection of Route 5 and the Pawtuxet River, then following the Pawtuxet River in an easterly

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and northerly direction to the municipal boundary in the vicinity of Knight Street, then from the

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intersection of Knight Street and the municipal boundary westerly along the Warwick/Cranston

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municipal boundary to the intersection of Route 5 and Greenwich Avenue. The above named

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streets are included in the district.

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

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

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

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categories listed in subsection (b)(1).

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

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

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

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

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business," "waterfront business," or "limited business" or hAvenue have been designated by the

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

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

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

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

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

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

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

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

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

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by the tax administrator.

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

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

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

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

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

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

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

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

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the tax administrator and specified in the notice.

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

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

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

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

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

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

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tax on the work or works.

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

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

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18 and 19 of this title.

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

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Income Tax" is hereby amended to read as follows:

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

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

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

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

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

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

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

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

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

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

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business," "waterfront business" or "limited business" or hAvenue have been designated by the

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

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

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"manufacturing district," "business district" or "Warren historic district," or in the case of

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Tiverton with those areas of the town which are zoned "business commercial," "business

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waterfront" or "village commercial." For the purposes of this section, a "work" means an original

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and creative work, whether written, composed, created or executed for "one-of-a-kind, limited"

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production, before or after the passing of this section, which falls into one of the following

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categories: (1) a book or other writing; (2) a play or the performance of said play; (3) a musical

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

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sculpture; (6) traditional and fine crafts; (7) the creation of a film or the acting of said film; (8)

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the creation of a dance or the performance of said dance. For purposes of this section, a "work"

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does not apply to any piece or performance created or executed for industry oriented or related

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production.

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

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

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

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

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

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

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

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

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Dorrance Street to the northeast, Sabin Street to the northwest and Empire Street to the southwest.

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Said Providence arts and entertainment district also includes the area beginning at the point of

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intersection of Acorn Street and Harris Avenuenue Avenue, then turning east onto Atwells

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Avenuenue Avenue to Service Road 7, then turning southerly onto Service Road 7 to

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

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

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

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

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

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

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

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

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

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

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

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

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

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the district. The "Westerly arts and entertainment district" is defined in section 44-18-

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30B(c)(1)(i). The "Pawtucket arts and entertainment district" shall be defined as the area

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beginning at the point of intersection of Dexter Street and the Central Falls line, then east along

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the Central Falls Line to the Blackstone River, then north along the city boundary on the

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Blackstone River to the Cumberland line, then west along the Pawtucket city boundary line to I-

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95, then south along I-95 to Pine Street, then north on Pine Street to AMTRAK Right of Way,

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

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the Central Falls line. Said Pawtucket arts and entertainment district also includes the area

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beginning at a point in the intersection of Dexter Street and the Pawtucket/Central Falls city

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boundary; then continuing westerly along Pawtucket/Central Falls city boundary to the

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intersection of Pine Street; then continuing southerly along Pine Street to the intersection of

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Conant Street; then continuing southwesterly along Conant Street to the Intersection of Weeden

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Street; then continuing west along Weeden Street to the intersection of New Street; then

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continuing southerly along New Street to the intersection of Fairlawn Avenue; then continuing

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southerly along Fairlawn Avenue to the intersection of Mineral Spring Avenue; then continuing

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east along Mineral Spring Avenue to the intersection of San Antonio Way; then continuing

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southeasterly along San Antonio Way to the intersection of Grotto Avenue; then continuing east

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along Grotto Avenue to the intersection with the Moshassuck River; then continuing south along

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the Moshassuck River to the intersection with I-95; then continuing south along I-95 to the

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intersection with the Pawtucket/Providence city boundary; then continuing east along the

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Pawtucket/Providence city boundary to the intersection of the Moshassuck River; then continuing

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north along the Moshassuck River to the intersection of Grenville Street; then continuing east

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along Grenville Street to the intersection of Main Street; then continuing south along Main Street

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to the intersection of Pawtucket Avenue; then continuing northeast along Pawtucket Avenue to

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the intersection of Glenwood Avenue; then continuing northwest along Glenwood Avenue to the

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intersection of West Avenue; then continuing northeast along West Avenue to the intersection of

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Trenton Street; then continuing west along Trenton Street to the intersection of Main Street; then

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continuing south along Main Street to a point approximately eighty-three feet (83') feet south

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from the southerly line of Campbell Terrace; then west and north along the rear property lines of

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those properties fronting Campbell Terrace to the intersection of Dudley Street (now abandoned);

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then east along a portion of Dudley Street (now abandoned) and Dudley Street to the intersection

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of Main Street; then continuing north along Main Street to the intersection of Warren Avenue;

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then continuing west along Warren Avenue to the intersection of Este Avenue; then continuing

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north along Esten Avenue to the intersection of Barnes Street; then continuing northwest across I-

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95 to the Providence and Worcester Railroad right-of-way; then continuing north along the

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Providence Worcester Railroad right-of-way to the intersection of Mineral Spring Avenue; then

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continuing east along Mineral Spring Avenue to the intersection of Pine Street; then continuing

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north along Pine Street to the intersection of Goff Avenue; then continuing east along Goff

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Avenue to the intersection of Dexter Street; then continuing north along Dexter Street to the

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intersection with the Pawtucket/ Central Falls city boundary, also being the point and place of

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beginning; excluding the Mineral Spring Avenue Cemetery that is a National Register Historic

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

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

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

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

10-3

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

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

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

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

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

10-8

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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district.

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

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

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exemption as provided for in this section.

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

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

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

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

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

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

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

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in subsection (a) of this section.

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

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

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

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

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

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

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

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

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

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

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

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

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claimed.

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

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

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that may be necessary.

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

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

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

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defined in this section.

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     SECTION 3. This act shall take effect upon passage.

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LC00590

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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 - PERSONAL INCOME TAX

***

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     This act would amend the laws for tax exempt artistic communities to include certain

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parts of the city of Pawtucket.

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     This act would take effect upon passage.

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LC00590

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