2015 -- H 5281 | |
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LC000872 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2015 | |
____________ | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES--LIABILITY AND | |
COMPUTATION | |
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Introduced By: Representatives Serpa, Fellela, Phillips, Ruggiero, and Shekarchi | |
Date Introduced: February 04, 2015 | |
Referred To: House Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and |
2 | Use Taxes - Liability and Computation" is hereby amended to read as follows: |
3 | 44-18-30. Gross receipts exempt from sales and use taxes [Effective December 31, |
4 | 2014.] -- There are exempted from the taxes imposed by this chapter the following gross receipts: |
5 | (1) Sales and uses beyond constitutional power of state. - From the sale and from the |
6 | storage, use, or other consumption in this state of tangible personal property the gross receipts |
7 | from the sale of which, or the storage, use, or other consumption of which, this state is prohibited |
8 | from taxing under the Constitution of the United States or under the constitution of this state. |
9 | (2) Newspapers. |
10 | (i) From the sale and from the storage, use, or other consumption in this state of any |
11 | newspaper. |
12 | (ii) "Newspaper" means an unbound publication printed on newsprint, that contains |
13 | news, editorial comment, opinions, features, advertising matter, and other matters of public |
14 | interest. |
15 | (iii) "Newspaper" does not include a magazine, handbill, circular, flyer, sales catalog, or |
16 | similar item unless the item is printed for and distributed as a part of a newspaper. |
17 | (3) School meals. - From the sale and from the storage, use, or other consumption in this |
18 | state of meals served by public, private, or parochial schools, school districts, colleges, |
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1 | universities, student organizations, and parent-teacher associations to the students or teachers of a |
2 | school, college, or university whether the meals are served by the educational institutions or by a |
3 | food service or management entity under contract to the educational institutions. |
4 | (4) Containers. |
5 | (i) From the sale and from the storage, use, or other consumption in this state of: |
6 | (A) Non-returnable containers, including boxes, paper bags, and wrapping materials that |
7 | are biodegradable and all bags and wrapping materials utilized in the medical and healing arts, |
8 | when sold without the contents to persons who place the contents in the container and sell the |
9 | contents with the container. |
10 | (B) Containers when sold with the contents if the sale price of the contents is not |
11 | required to be included in the measure of the taxes imposed by this chapter. |
12 | (C) Returnable containers when sold with the contents in connection with a retail sale of |
13 | the contents or when resold for refilling. |
14 | (ii) As used in this subdivision, the term "returnable containers" means containers of a |
15 | kind customarily returned by the buyer of the contents for reuse. All other containers are "non- |
16 | returnable containers." |
17 | (5) (i) Charitable, educational, and religious organizations. - From the sale to, as in |
18 | defined in this section, and from the storage, use, and other consumption in this state or any other |
19 | state of the United States of America of tangible personal property by hospitals not operated for a |
20 | profit; "educational institutions" as defined in subdivision (18) not operated for a profit; churches, |
21 | orphanages, and other institutions or organizations operated exclusively for religious or charitable |
22 | purposes; interest-free loan associations not operated for profit; nonprofit, organized sporting |
23 | leagues and associations and bands for boys and girls under the age of nineteen (19) years; the |
24 | following vocational student organizations that are state chapters of national vocational students |
25 | organizations: Distributive Education Clubs of America (DECA); Future Business Leaders of |
26 | America, Phi Beta Lambda (FBLA/PBL); Future Farmers of America (FFA); Future |
27 | Homemakers of America/Home Economics Related Occupations (FHA/HERD); Vocational |
28 | Industrial Clubs of America (VICA); organized nonprofit golden age and senior citizens clubs for |
29 | men and women; and parent-teacher associations. |
30 | (ii) In the case of contracts entered into with the federal government, its agencies or |
31 | instrumentalities, this state or any other state of the United States of America, its agencies, any |
32 | city, town, district, or other political subdivision of the states; hospitals not operated for profit; |
33 | educational institutions not operated for profit; churches, orphanages, and other institutions or |
34 | organizations operated exclusively for religious or charitable purposes; the contractor may |
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1 | purchase such materials and supplies (materials and/or supplies are defined as those that are |
2 | essential to the project) that are to be utilized in the construction of the projects being performed |
3 | under the contracts without payment of the tax. |
4 | (iii) The contractor shall not charge any sales or use tax to any exempt agency, |
5 | institution, or organization but shall in that instance provide his or her suppliers with certificates |
6 | in the form as determined by the division of taxation showing the reason for exemption and the |
7 | contractor's records must substantiate the claim for exemption by showing the disposition of all |
8 | property so purchased. If any property is then used for a nonexempt purpose, the contractor must |
9 | pay the tax on the property used. |
10 | (6) Gasoline. - From the sale and from the storage, use, or other consumption in this state |
11 | of: (i) gasoline and other products taxed under chapter 36 of title 31 and (ii) fuels used for the |
12 | propulsion of airplanes. |
13 | (7) Purchase for manufacturing purposes. |
14 | (i) From the sale and from the storage, use, or other consumption in this state of |
15 | computer software, tangible personal property, electricity, natural gas, artificial gas, steam, |
16 | refrigeration, and water, when the property or service is purchased for the purpose of being |
17 | manufactured into a finished product for resale and becomes an ingredient, component, or |
18 | integral part of the manufactured, compounded, processed, assembled, or prepared product, or if |
19 | the property or service is consumed in the process of manufacturing for resale computer software, |
20 | tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration, or water. |
21 | (ii) "Consumed" means destroyed, used up, or worn out to the degree or extent that the |
22 | property cannot be repaired, reconditioned, or rendered fit for further manufacturing use. |
23 | (iii) "Consumed" includes mere obsolescence. |
24 | (iv) "Manufacturing" means and includes manufacturing, compounding, processing, |
25 | assembling, preparing, or producing. |
26 | (v) "Process of manufacturing" means and includes all production operations performed |
27 | in the producing or processing room, shop, or plant, insofar as the operations are a part of and |
28 | connected with the manufacturing for resale of tangible personal property, electricity, natural gas, |
29 | artificial gas, steam, refrigeration, or water and all production operations performed insofar as the |
30 | operations are a part of and connected with the manufacturing for resale of computer software. |
31 | (vi) "Process of manufacturing" does not mean or include administration operations such |
32 | as general office operations, accounting, collection or sales promotion, nor does it mean or |
33 | include distribution operations that occur subsequent to production operations, such as handling, |
34 | storing, selling, and transporting the manufactured products, even though the administration and |
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1 | distribution operations are performed by, or in connection with, a manufacturing business. |
2 | (8) State and political subdivisions. - From the sale to, and from the storage, use, or other |
3 | consumption by, this state, any city, town, district, or other political subdivision of this state. |
4 | Every redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a |
5 | subdivision of the municipality where it is located. |
6 | (9) Food and food ingredients. - From the sale and storage, use, or other consumption in |
7 | this state of food and food ingredients as defined in § 44-18-7.1(l). |
8 | For the purposes of this exemption "food and food ingredients" shall not include candy, |
9 | soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending |
10 | machines, or prepared food, as those terms are defined in § 44-18-7.1, unless the prepared food is: |
11 | (i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311, |
12 | except sub-sector 3118 (bakeries); |
13 | (ii) Sold in an unheated state by weight or volume as a single item; |
14 | (iii) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, |
15 | donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and |
16 | is not sold with utensils provided by the seller, including plates, knives, forks, spoons, |
17 | glasses, cups, napkins, or straws. |
18 | (10) Medicines, drugs, and durable medical equipment. - From the sale and from the |
19 | storage, use, or other consumption in this state, of; |
20 | (i) "Drugs" as defined in § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and |
21 | insulin whether or not sold on prescription. For purposes of this exemption drugs shall not |
22 | include over-the-counter drugs and grooming and hygiene products as defined in § 44-18- |
23 | 7.1(h)(iii). |
24 | (ii) Durable medical equipment as defined in § 44-18-7.1(k) for home use only, |
25 | including, but not limited to, syringe infusers, ambulatory drug delivery pumps, hospital beds, |
26 | convalescent chairs, and chair lifts. Supplies used in connection with syringe infusers and |
27 | ambulatory drug delivery pumps that are sold on prescription to individuals to be used by them to |
28 | dispense or administer prescription drugs, and related ancillary dressings and supplies used to |
29 | dispense or administer prescription drugs, shall also be exempt from tax. |
30 | (11) Prosthetic devices and mobility enhancing equipment. - From the sale and from the |
31 | storage, use, or other consumption in this state, of prosthetic devices as defined in § 44-18-7.1(t), |
32 | sold on prescription, including, but not limited to: artificial limbs, dentures, spectacles, |
33 | eyeglasses, and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on |
34 | prescription; and mobility enhancing equipment as defined in § 44-18-7.1(p), including |
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1 | wheelchairs, crutches and canes. |
2 | (12) Coffins, caskets, and burial garments. - From the sale and from the storage, use, or |
3 | other consumption in this state of coffins or caskets, and shrouds or other burial garments that are |
4 | ordinarily sold by a funeral director as part of the business of funeral directing. |
5 | (13) Motor vehicles sold to nonresidents. |
6 | (i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide |
7 | nonresident of this state who does not register the motor vehicle in this state, whether the sale or |
8 | delivery of the motor vehicle is made in this state or at the place of residence of the nonresident. |
9 | A motor vehicle sold to a bona fide nonresident whose state of residence does not allow a like |
10 | exemption to its nonresidents is not exempt from the tax imposed under § 44-18-20. In that event, |
11 | the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that |
12 | would be imposed in his or her state of residence not to exceed the rate that would have been |
13 | imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed motor vehicle |
14 | dealer shall add and collect the tax required under this subdivision and remit the tax to the tax |
15 | administrator under the provisions of chapters 18 and 19 of this title. When a Rhode Island |
16 | licensed, motor vehicle dealer is required to add and collect the sales and use tax on the sale of a |
17 | motor vehicle to a bona fide nonresident as provided in this section, the dealer in computing the |
18 | tax takes into consideration the law of the state of the nonresident as it relates to the trade-in of |
19 | motor vehicles. |
20 | (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, |
21 | may require any licensed motor vehicle dealer to keep records of sales to bona fide nonresidents |
22 | as the tax administrator deems reasonably necessary to substantiate the exemption provided in |
23 | this subdivision, including the affidavit of a licensed motor vehicle dealer that the purchaser of |
24 | the motor vehicle was the holder of, and had in his or her possession a valid out of state motor |
25 | vehicle registration or a valid out of state driver's license. |
26 | (iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days |
27 | of the date of its sale to him or her is deemed to have purchased the motor vehicle for use, |
28 | storage, or other consumption in this state, and is subject to, and liable for, the use tax imposed |
29 | under the provisions of § 44-18-20. |
30 | (14) Sales in public buildings by blind people. - From the sale and from the storage, use, |
31 | or other consumption in all public buildings in this state of all products or wares by any person |
32 | licensed under § 40-9-11.1. |
33 | (15) Air and water pollution control facilities. - From the sale, storage, use, or other |
34 | consumption in this state of tangible personal property or supplies acquired for incorporation into |
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1 | or used and consumed in the operation of a facility, the primary purpose of which is to aid in the |
2 | control of the pollution or contamination of the waters or air of the state, as defined in chapter 12 |
3 | of title 46 and chapter 25 of title 23, respectively, and that has been certified as approved for that |
4 | purpose by the director of environmental management. The director of environmental |
5 | management may certify to a portion of the tangible personal property or supplies acquired for |
6 | incorporation into those facilities or used and consumed in the operation of those facilities to the |
7 | extent that that portion has as its primary purpose the control of the pollution or contamination of |
8 | the waters or air of this state. As used in this subdivision, "facility" means any land, facility, |
9 | device, building, machinery, or equipment. |
10 | (16) Camps. - From the rental charged for living quarters, or sleeping, or housekeeping |
11 | accommodations at camps or retreat houses operated by religious, charitable, educational, or |
12 | other organizations and associations mentioned in subdivision (5), or by privately owned and |
13 | operated summer camps for children. |
14 | (17) Certain institutions. - From the rental charged for living or sleeping quarters in an |
15 | institution licensed by the state for the hospitalization, custodial, or nursing care of human beings. |
16 | (18) Educational institutions. - From the rental charged by any educational institution for |
17 | living quarters, or sleeping, or housekeeping accommodations or other rooms or accommodations |
18 | to any student or teacher necessitated by attendance at an educational institution. "Educational |
19 | institution" as used in this section means an institution of learning not operated for profit that is |
20 | empowered to confer diplomas, educational, literary, or academic degrees; that has a regular |
21 | faculty, curriculum, and organized body of pupils or students in attendance throughout the usual |
22 | school year; that keeps and furnishes to students and others records required and accepted for |
23 | entrance to schools of secondary, collegiate, or graduate rank; and no part of the net earnings of |
24 | which inures to the benefit of any individual. |
25 | (19) Motor vehicle and adaptive equipment for persons with disabilities. |
26 | (i) From the sale of: (A) Special adaptations; (B) The component parts of the special |
27 | adaptations; or (C) A specially adapted motor vehicle; provided that the owner furnishes to the |
28 | tax administrator an affidavit of a licensed physician to the effect that the specially adapted motor |
29 | vehicle is necessary to transport a family member with a disability or where the vehicle has been |
30 | specially adapted to meet the specific needs of the person with a disability. This exemption |
31 | applies to not more than one motor vehicle owned and registered for personal, noncommercial |
32 | use. |
33 | (ii) For the purpose of this subsection the term "special adaptations" includes, but is not |
34 | limited to: wheelchair lifts, wheelchair carriers, wheelchair ramps, wheelchair securements, hand |
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1 | controls, steering devices, extensions, relocations, and crossovers of operator controls, power- |
2 | assisted controls, raised tops or dropped floors, raised entry doors, or alternative signaling devices |
3 | to auditory signals. |
4 | (iii) From the sale of: (a) special adaptations, (b) the component parts of the special |
5 | adaptations, for a "wheelchair accessible taxicab" as defined in § 39-14-1, and/or a "wheelchair |
6 | accessible public motor vehicle" as defined in § 39-14.1-1. |
7 | (iv) For the purpose of this subdivision the exemption for a "specially adapted motor |
8 | vehicle" means a use tax credit not to exceed the amount of use tax that would otherwise be due |
9 | on the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the |
10 | special adaptations, including installation. |
11 | (20) Heating fuels. - From the sale and from the storage, use, or other consumption in |
12 | this state of every type of fuel used in the heating of homes and residential premises. |
13 | (21) Electricity and gas. - From the sale and from the storage, use, or other consumption |
14 | in this state of electricity and gas furnished for domestic use by occupants of residential premises. |
15 | (22) Manufacturing machinery and equipment. |
16 | (i) From the sale and from the storage, use, or other consumption in this state of tools, |
17 | dies, molds, machinery, equipment (including replacement parts), and related items to the extent |
18 | used in an industrial plant in connection with the actual manufacture, conversion, or processing of |
19 | tangible personal property, or to the extent used in connection with the actual manufacture, |
20 | conversion, or processing of computer software as that term is utilized in industry numbers 7371, |
21 | 7372, and 7373 in the standard industrial classification manual prepared by the Technical |
22 | Committee on Industrial Classification, Office of Statistical Standards, Executive Office of the |
23 | President, United States Bureau of the Budget, as revised from time to time, to be sold, or that |
24 | machinery and equipment used in the furnishing of power to an industrial manufacturing plant. |
25 | For the purposes of this subdivision, "industrial plant" means a factory at a fixed location |
26 | primarily engaged in the manufacture, conversion, or processing of tangible personal property to |
27 | be sold in the regular course of business; |
28 | (ii) Machinery and equipment and related items are not deemed to be used in connection |
29 | with the actual manufacture, conversion, or processing of tangible personal property, or in |
30 | connection with the actual manufacture, conversion, or processing of computer software as that |
31 | term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification |
32 | manual prepared by the Technical Committee on Industrial Classification, Office of Statistical |
33 | Standards, Executive Office of the President, United States Bureau of the Budget, as revised from |
34 | time to time, to be sold to the extent the property is used in administration or distribution |
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1 | operations; |
2 | (iii) Machinery and equipment and related items used in connection with the actual |
3 | manufacture, conversion, or processing of any computer software or any tangible personal |
4 | property that is not to be sold and that would be exempt under subdivision (7) or this subdivision |
5 | if purchased from a vendor or machinery and equipment and related items used during any |
6 | manufacturing, converting, or processing function is exempt under this subdivision even if that |
7 | operation, function, or purpose is not an integral or essential part of a continuous production flow |
8 | or manufacturing process; |
9 | (iv) Where a portion of a group of portable or mobile machinery is used in connection |
10 | with the actual manufacture, conversion, or processing of computer software or tangible personal |
11 | property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under |
12 | this subdivision even though the machinery in that group is used interchangeably and not |
13 | otherwise identifiable as to use. |
14 | (23) Trade-in value of motor vehicles. - From the sale and from the storage, use, or other |
15 | consumption in this state of so much of the purchase price paid for a new or used automobile as is |
16 | allocated for a trade-in allowance on the automobile of the buyer given in trade to the seller, or of |
17 | the proceeds applicable only to the automobile as are received from the manufacturer of |
18 | automobiles for the repurchase of the automobile whether the repurchase was voluntary or not |
19 | towards the purchase of a new or used automobile by the buyer. For the purpose of this |
20 | subdivision, the word "automobile" means a private passenger automobile not used for hire and |
21 | does not refer to any other type of motor vehicle. |
22 | (24) Precious metal bullion. |
23 | (i) From the sale and from the storage, use, or other consumption in this state of precious |
24 | metal bullion, substantially equivalent to a transaction in securities or commodities. |
25 | (ii) For purposes of this subdivision, "precious metal bullion" means any elementary |
26 | precious metal that has been put through a process of smelting or refining, including, but not |
27 | limited to, gold, silver, platinum, rhodium, and chromium, and that is in a state or condition that |
28 | its value depends upon its content and not upon its form. |
29 | (iii) The term does not include fabricated precious metal that has been processed or |
30 | manufactured for some one or more specific and customary industrial, professional, or artistic |
31 | uses. |
32 | (25) Commercial vessels. - From sales made to a commercial ship, barge, or other vessel |
33 | of fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from |
34 | the repair, alteration, or conversion of the vessels, and from the sale of property purchased for the |
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1 | use of the vessels including provisions, supplies, and material for the maintenance and/or repair |
2 | of the vessels. |
3 | (26) Commercial fishing vessels. - From the sale and from the storage, use, or other |
4 | consumption in this state of vessels and other water craft that are in excess of five (5) net tons and |
5 | that are used exclusively for "commercial fishing", as defined in this subdivision, and from the |
6 | repair, alteration, or conversion of those vessels and other watercraft, and from the sale of |
7 | property purchased for the use of those vessels and other watercraft including provisions, |
8 | supplies, and material for the maintenance and/or repair of the vessels and other watercraft and |
9 | the boats nets, cables, tackle, and other fishing equipment appurtenant to or used in connection |
10 | with the commercial fishing of the vessels and other watercraft. "Commercial fishing" means |
11 | taking or attempting to take any fish, shellfish, crustacea, or bait species with the intent of |
12 | disposing of it for profit or by sale, barter, trade, or in commercial channels. The term does not |
13 | include subsistence fishing, i.e., the taking for personal use and not for sale or barter; or sport |
14 | fishing; but shall include vessels and other watercraft with a Rhode Island party and charter boat |
15 | license issued by the department of environmental management pursuant to § 20-2-27.1 that meet |
16 | the following criteria: (i) The operator must have a current U.S.C.G. license to carry passengers |
17 | for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii) U.S.C.G. vessel |
18 | documentation as to proof of Rhode Island home port status or a Rhode Island boat registration to |
19 | prove Rhode Island home port status; and (iv) The vessel must be used as a commercial passenger |
20 | carrying fishing vessel to carry passengers for fishing. The vessel must be able to demonstrate |
21 | that at least fifty percent (50%) of its annual gross income derives from charters or provides |
22 | documentation of a minimum of one hundred (100) charter trips annually; and (v) The vessel |
23 | must have a valid Rhode Island party and charter boat license. The tax administrator shall |
24 | implement the provisions of this subdivision by promulgating rules and regulations relating |
25 | thereto. |
26 | (27) Clothing and footwear. - From the sales of articles of clothing, including footwear, |
27 | intended to be worn or carried on or about the human body for sales prior to October 1, 2012. |
28 | Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including |
29 | footwear, intended to be worn or carried on or about the human body up to two hundred and fifty |
30 | dollars ($250) of the sales price per item. For the purposes of this section, "clothing or footwear" |
31 | does not include clothing accessories or equipment or special clothing or footwear primarily |
32 | designed for athletic activity or protective use as these terms are defined in section 44-18-7.1(f). |
33 | In recognition of the work being performed by the streamlined sales and use tax governing board, |
34 | upon passage of any federal law that authorizes states to require remote sellers to collect and |
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1 | remit sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. |
2 | The unlimited exemption on sales of clothing and footwear shall take effect on the date that the |
3 | state requires remote sellers to collect and remit sales and use taxes. |
4 | (28) Water for residential use. - From the sale and from the storage, use, or other |
5 | consumption in this state of water furnished for domestic use by occupants of residential |
6 | premises. |
7 | (29) Bibles. - [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see |
8 | Notes to Decisions.]From the sale and from the storage, use, or other consumption in the state of |
9 | any canonized scriptures of any tax-exempt nonprofit religious organization including, but not |
10 | limited to, the Old Testament and the New Testament versions. |
11 | (30) Boats. |
12 | (i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not |
13 | register the boat or vessel in this state or document the boat or vessel with the United States |
14 | government at a home port within the state, whether the sale or delivery of the boat or vessel is |
15 | made in this state or elsewhere; provided, that the nonresident transports the boat within thirty |
16 | (30) days after delivery by the seller outside the state for use thereafter solely outside the state. |
17 | (ii) The tax administrator, in addition to the provisions of §§ 44-19-17 and 44-19-28, |
18 | may require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents |
19 | as the tax administrator deems reasonably necessary to substantiate the exemption provided in |
20 | this subdivision, including the affidavit of the seller that the buyer represented himself or herself |
21 | to be a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this |
22 | state. |
23 | (31) Youth activities equipment. - From the sale, storage, use, or other consumption in |
24 | this state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island |
25 | eleemosynary organizations, for the purposes of youth activities that the organization is formed to |
26 | sponsor and support; and by accredited elementary and secondary schools for the purposes of the |
27 | schools or of organized activities of the enrolled students. |
28 | (32) Farm equipment. - From the sale and from the storage or use of machinery and |
29 | equipment used directly for commercial farming and agricultural production; including, but not |
30 | limited to: tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors, |
31 | balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment, |
32 | greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and |
33 | other farming equipment, including replacement parts appurtenant to or used in connection with |
34 | commercial farming and tools and supplies used in the repair and maintenance of farming |
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1 | equipment. "Commercial farming" means the keeping or boarding of five (5) or more horses or |
2 | the production within this state of agricultural products, including, but not limited to, field or |
3 | orchard crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or |
4 | production provides at least two thousand five hundred dollars ($2,500) in annual gross sales to |
5 | the operator, whether an individual, a group, a partnership, or a corporation for exemptions issued |
6 | prior to July 1, 2002. For exemptions issued or renewed after July 1, 2002, there shall be two (2) |
7 | levels. Level I shall be based on proof of annual, gross sales from commercial farming of at least |
8 | twenty-five hundred dollars ($2,500) and shall be valid for purchases subject to the exemption |
9 | provided in this subdivision except for motor vehicles with an excise tax value of five thousand |
10 | dollars ($5,000) or greater. Level II shall be based on proof of annual gross sales from |
11 | commercial farming of at least ten thousand dollars ($10,000) or greater and shall be valid for |
12 | purchases subject to the exemption provided in this subdivision including motor vehicles with an |
13 | excise tax value of five thousand dollars ($5,000) or greater. For the initial issuance of the |
14 | exemptions, proof of the requisite amount of annual gross sales from commercial farming shall be |
15 | required for the prior year; for any renewal of an exemption granted in accordance with this |
16 | subdivision at either level I or level II, proof of gross annual sales from commercial farming at |
17 | the requisite amount shall be required for each of the prior two (2) years. Certificates of |
18 | exemption issued or renewed after July 1, 2002, shall clearly indicate the level of the exemption |
19 | and be valid for four (4) years after the date of issue. This exemption applies even if the same |
20 | equipment is used for ancillary uses, or is temporarily used for a non-farming or a non- |
21 | agricultural purpose, but shall not apply to motor vehicles acquired after July 1, 2002, unless the |
22 | vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for registration displaying |
23 | farm plates as provided for in § 31-3-31. |
24 | (33) Compressed air. - From the sale and from the storage, use, or other consumption in |
25 | the state of compressed air. |
26 | (34) Flags. - From the sale and from the storage, consumption, or other use in this state |
27 | of United States, Rhode Island or POW-MIA flags. |
28 | (35) Motor vehicle and adaptive equipment to certain veterans. - From the sale of a |
29 | motor vehicle and adaptive equipment to and for the use of a veteran with a service-connected |
30 | loss of or the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee, |
31 | whether service connected or not. The motor vehicle must be purchased by and especially |
32 | equipped for use by the qualifying veteran. Certificate of exemption or refunds of taxes paid is |
33 | granted under rules or regulations that the tax administrator may prescribe. |
34 | (36) Textbooks. - From the sale and from the storage, use, or other consumption in this |
| LC000872 - Page 11 of 18 |
1 | state of textbooks by an "educational institution", as defined in subdivision (18) of this section, |
2 | and any educational institution within the purview of § 16-63-9(4), and used textbooks by any |
3 | purveyor. |
4 | (37) Tangible personal property and supplies used in on-site hazardous waste recycling, |
5 | reuse, or treatment. - From the sale, storage, use, or other consumption in this state of tangible |
6 | personal property or supplies used or consumed in the operation of equipment, the exclusive |
7 | function of which is the recycling, reuse, or recovery of materials (other than precious metals, as |
8 | defined in subdivision (24)(ii) of this section) from the treatment of "hazardous wastes", as |
9 | defined in § 23-19.1-4, where the "hazardous wastes" are generated in Rhode Island solely by the |
10 | same taxpayer and where the personal property is located at, in, or adjacent to a generating |
11 | facility of the taxpayer in Rhode Island. The taxpayer shall procure an order from the director of |
12 | the department of environmental management certifying that the equipment and/or supplies as |
13 | used or consumed, qualify for the exemption under this subdivision. If any information relating to |
14 | secret processes or methods of manufacture, production, or treatment is disclosed to the |
15 | department of environmental management only to procure an order, and is a "trade secret" as |
16 | defined in § 28-21-10(b), it is not open to public inspection or publicly disclosed unless |
17 | disclosure is required under chapter 21 of title 28 or chapter 24.4 of title 23. |
18 | (38) Promotional and product literature of boat manufacturers. - From the sale and from |
19 | the storage, use, or other consumption of promotional and product literature of boat |
20 | manufacturers shipped to points outside of Rhode Island that either: (i) Accompany the product |
21 | that is sold; (ii) Are shipped in bulk to out-of-state dealers for use in the sale of the product; or |
22 | (iii) Are mailed to customers at no charge. |
23 | (39) Food items paid for by food stamps. - From the sale and from the storage, use, or |
24 | other consumption in this state of eligible food items payment for which is properly made to the |
25 | retailer in the form of U.S. government food stamps issued in accordance with the Food Stamp |
26 | Act of 1977, 7 U.S.C. § 2011 et seq. |
27 | (40) Transportation charges. - From the sale or hiring of motor carriers as defined in § |
28 | 39-12-2(l) to haul goods, when the contract or hiring cost is charged by a motor freight tariff filed |
29 | with the Rhode Island public utilities commission on the number of miles driven or by the |
30 | number of hours spent on the job. |
31 | (41) Trade-in value of boats. - From the sale and from the storage, use, or other |
32 | consumption in this state of so much of the purchase price paid for a new or used boat as is |
33 | allocated for a trade-in allowance on the boat of the buyer given in trade to the seller or of the |
34 | proceeds applicable only to the boat as are received from an insurance claim as a result of a stolen |
| LC000872 - Page 12 of 18 |
1 | or damaged boat, towards the purchase of a new or used boat by the buyer. |
2 | (42) Equipment used for research and development. - From the sale and from the |
3 | storage, use, or other consumption of equipment to the extent used for research and development |
4 | purposes by a qualifying firm. For the purposes of this subdivision, "qualifying firm" means a |
5 | business for which the use of research and development equipment is an integral part of its |
6 | operation and "equipment" means scientific equipment, computers, software, and related items. |
7 | (43) Coins. - From the sale and from the other consumption in this state of coins having |
8 | numismatic or investment value. |
9 | (44) Farm structure construction materials. - Lumber, hardware, and other materials used |
10 | in the new construction of farm structures, including production facilities such as, but not limited |
11 | to, farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying |
12 | houses, fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing |
13 | rooms, machinery storage, seasonal farm worker housing, certified farm markets, bunker and |
14 | trench silos, feed storage sheds, and any other structures used in connection with commercial |
15 | farming. |
16 | (45) Telecommunications carrier access service. - Carrier access service or |
17 | telecommunications service when purchased by a telecommunications company from another |
18 | telecommunications company to facilitate the provision of telecommunications service. |
19 | (46) Boats or vessels brought into the state exclusively for winter storage, maintenance, |
20 | repair or sale. - Notwithstanding the provisions of §§ 44-18-10, 44-18-11 and 44-18-20, the tax |
21 | imposed by § 44-18-20 is not applicable for the period commencing on the first day of October in |
22 | any year up to and including the 30th day of April next succeeding with respect to the use of any |
23 | boat or vessel within this state exclusively for purposes of: (i) Delivery of the vessel to a facility |
24 | in this state for storage, including dry storage and storage in water by means of apparatus |
25 | preventing ice damage to the hull, maintenance, or repair; (ii) The actual process of storage, |
26 | maintenance, or repair of the boat or vessel; or (iii) Storage for the purpose of selling the boat or |
27 | vessel. |
28 | (47) Jewelry display product. - From the sale and from the storage, use, or other |
29 | consumption in this state of tangible personal property used to display any jewelry product; |
30 | provided that title to the jewelry display product is transferred by the jewelry manufacturer or |
31 | seller and that the jewelry display product is shipped out of state for use solely outside the state |
32 | and is not returned to the jewelry manufacturer or seller. |
33 | (48) Boats or vessels generally. - Notwithstanding the provisions of this chapter, the tax |
34 | imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage, |
| LC000872 - Page 13 of 18 |
1 | use, or other consumption in this state of any new or used boat. The exemption provided for in |
2 | this subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal |
3 | ten percent (10%) surcharge on luxury boats is repealed. |
4 | (49) Banks and regulated investment companies interstate toll-free calls. - |
5 | Notwithstanding the provisions of this chapter, the tax imposed by this chapter does not apply to |
6 | the furnishing of interstate and international, toll-free terminating telecommunication service that |
7 | is used directly and exclusively by or for the benefit of an eligible company as defined in this |
8 | subdivision; provided that an eligible company employs on average during the calendar year no |
9 | less than five hundred (500) "full-time equivalent employees" as that term is defined in § 42-64.5- |
10 | 2. For purposes of this section, an "eligible company" means a "regulated investment company" |
11 | as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C. § 1 et seq., or a |
12 | corporation to the extent the service is provided, directly or indirectly, to or on behalf of a |
13 | regulated investment company, an employee benefit plan, a retirement plan or a pension plan or a |
14 | state-chartered bank. |
15 | (50) Mobile and manufactured homes generally. - From the sale and from the storage, |
16 | use, or other consumption in this state of mobile and/or manufactured homes as defined and |
17 | subject to taxation pursuant to the provisions of chapter 44 of title 31. |
18 | (51) Manufacturing business reconstruction materials. |
19 | (i) From the sale and from the storage, use, or other consumption in this state of lumber, |
20 | hardware, and other building materials used in the reconstruction of a manufacturing business |
21 | facility that suffers a disaster, as defined in this subdivision, in this state. "Disaster" means any |
22 | occurrence, natural or otherwise, that results in the destruction of sixty percent (60%) or more of |
23 | an operating manufacturing business facility within this state. "Disaster" does not include any |
24 | damage resulting from the willful act of the owner of the manufacturing business facility. |
25 | (ii) Manufacturing business facility includes, but is not limited to, the structures housing |
26 | the production and administrative facilities. |
27 | (iii) In the event a manufacturer has more than one manufacturing site in this state, the |
28 | sixty percent (60%) provision applies to the damages suffered at that one site. |
29 | (iv) To the extent that the costs of the reconstruction materials are reimbursed by |
30 | insurance, this exemption does not apply. |
31 | (52) Tangible personal property and supplies used in the processing or preparation of |
32 | floral products and floral arrangements. - From the sale, storage, use, or other consumption in this |
33 | state of tangible personal property or supplies purchased by florists, garden centers, or other like |
34 | producers or vendors of flowers, plants, floral products, and natural and artificial floral |
| LC000872 - Page 14 of 18 |
1 | arrangements that are ultimately sold with flowers, plants, floral products, and natural and |
2 | artificial floral arrangements or are otherwise used in the decoration, fabrication, creation, |
3 | processing, or preparation of flowers, plants, floral products, or natural and artificial floral |
4 | arrangements, including descriptive labels, stickers, and cards affixed to the flower, plant, floral |
5 | product, or arrangement, artificial flowers, spray materials, floral paint and tint, plant shine, |
6 | flower food, insecticide and fertilizers. |
7 | (53) Horse food products. - From the sale and from the storage, use, or other |
8 | consumption in this state of horse food products purchased by a person engaged in the business of |
9 | the boarding of horses. |
10 | (54) Non-motorized recreational vehicles sold to nonresidents. |
11 | (i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to |
12 | a bona fide nonresident of this state who does not register the non-motorized recreational vehicle |
13 | in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this |
14 | state or at the place of residence of the nonresident; provided that a non-motorized recreational |
15 | vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption |
16 | to its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in |
17 | that event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the |
18 | rate that would be imposed in his or her state of residence not to exceed the rate that would have |
19 | been imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed, non- |
20 | motorized recreational vehicle dealer shall add and collect the tax required under this subdivision |
21 | and remit the tax to the tax administrator under the provisions of chapters 18 and 19 of this title. |
22 | Provided, that when a Rhode Island licensed, non-motorized recreational vehicle dealer is |
23 | required to add and collect the sales and use tax on the sale of a non-motorized recreational |
24 | vehicle to a bona fide nonresident as provided in this section, the dealer in computing the tax |
25 | takes into consideration the law of the state of the nonresident as it relates to the trade-in of motor |
26 | vehicles. |
27 | (ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, |
28 | may require any licensed, non-motorized recreational vehicle dealer to keep records of sales to |
29 | bona fide nonresidents as the tax administrator deems reasonably necessary to substantiate the |
30 | exemption provided in this subdivision, including the affidavit of a licensed, non-motorized |
31 | recreational vehicle dealer that the purchaser of the non-motorized recreational vehicle was the |
32 | holder of, and had in his or her possession a valid out-of-state non-motorized recreational vehicle |
33 | registration or a valid out-of-state driver's license. |
34 | (iii) Any nonresident who registers a non-motorized recreational vehicle in this state |
| LC000872 - Page 15 of 18 |
1 | within ninety (90) days of the date of its sale to him or her is deemed to have purchased the non- |
2 | motorized recreational vehicle for use, storage, or other consumption in this state, and is subject |
3 | to, and liable for, the use tax imposed under the provisions of § 44-18-20. |
4 | (iv) "Non-motorized recreational vehicle" means any portable dwelling designed and |
5 | constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use |
6 | that is eligible to be registered for highway use, including, but not limited to, "pick-up coaches" |
7 | or "pick-up campers," "travel trailers," and "tent trailers" as those terms are defined in chapter 1 |
8 | of title 31. |
9 | (55) Sprinkler and fire alarm systems in existing buildings. - From the sale in this state of |
10 | sprinkler and fire alarm systems; emergency lighting and alarm systems; and the materials |
11 | necessary and attendant to the installation of those systems that are required in buildings and |
12 | occupancies existing therein in July 2003 in order to comply with any additional requirements for |
13 | such buildings arising directly from the enactment of the Comprehensive Fire Safety Act of 2003 |
14 | and that are not required by any other provision of law or ordinance or regulation adopted |
15 | pursuant to that Act. The exemption provided in this subdivision shall expire on December 31, |
16 | 2008. |
17 | (56) Aircraft. - Notwithstanding the provisions of this chapter, the tax imposed by §§ 44- |
18 | 18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or other |
19 | consumption in this state of any new or used aircraft or aircraft parts. |
20 | (57) Renewable energy products. - Notwithstanding any other provisions of Rhode |
21 | Island general laws, the following products shall also be exempt from sales tax: solar photovoltaic |
22 | modules or panels, or any module or panel that generates electricity from light; solar thermal |
23 | collectors, including, but not limited to, those manufactured with flat glass plates, extruded |
24 | plastic, sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to- |
25 | water and water-to-air type pumps; wind turbines; towers used to mount wind turbines if |
26 | specified by or sold by a wind turbine manufacturer; DC to AC inverters that interconnect with |
27 | utility power lines; and manufactured mounting racks and ballast pans for solar collector, module, |
28 | or panel installation. Not to include materials that could be fabricated into such racks; monitoring |
29 | and control equipment, if specified or supplied by a manufacturer of solar thermal, solar |
30 | photovoltaic, geothermal, or wind energy systems or if required by law or regulation for such |
31 | systems but not to include pumps, fans or plumbing or electrical fixtures unless shipped from the |
32 | manufacturer affixed to, or an integral part of, another item specified on this list; and solar storage |
33 | tanks that are part of a solar domestic hot water system or a solar space heating system. If the tank |
34 | comes with an external heat exchanger it shall also be tax exempt, but a standard hot water tank is |
| LC000872 - Page 16 of 18 |
1 | not exempt from state sales tax. |
2 | (58) Returned property. - The amount charged for property returned by customers upon |
3 | rescission of the contract of sale when the entire amount exclusive of handling charges paid for |
4 | the property is refunded in either cash or credit, and where the property is returned within one |
5 | hundred twenty (120) days from the date of delivery. |
6 | (59) Dietary Supplements. - From the sale and from the storage, use, or other |
7 | consumption of dietary supplements as defined in § 44-18-7.1(l)(v), sold on prescriptions. |
8 | (60) Blood. - From the sale and from the storage, use, or other consumption of human |
9 | blood. |
10 | (61) Agricultural products for human consumption. - From the sale and from the storage, |
11 | use, or other consumption of livestock and poultry of the kinds of products that ordinarily |
12 | constitute food for human consumption and of livestock of the kind the products of which |
13 | ordinarily constitutes fibers for human use. |
14 | (62) Diesel emission control technology. - From the sale and use of diesel retrofit |
15 | technology that is required by § 31-47.3-4. |
16 | (63) Feed for certain animals used in commercial farming. - From the sale of feed for |
17 | animals as described in § 44-18-30(61). |
18 | (64) Alcoholic beverages. - From the sale and storage, use, or other consumption in this |
19 | state by a Class A licensee of alcoholic beverages, as defined in § 44-18-7.1, excluding beer and |
20 | malt beverages from December 1, 2013, through June 30, 2015; provided, further, |
21 | notwithstanding § 6-13-1 or any other general or public law to the contrary, alcoholic beverages, |
22 | as defined in § 44-18-7.1, shall not be subject to minimum markup from December 1, 2013, |
23 | through June 30, 2015. |
24 | (65) Fuel oil. - From the purchase for use, or consumption of fuel oil by commercial |
25 | establishments. This exemption shall not apply to fuel oil that is purchased for distribution or |
26 | resale. |
27 | SECTION 2. This act shall take effect upon passage. |
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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 | |
*** | |
1 | This act would exempt from taxes fuel oil purchased for use or consumption by |
2 | commercial establishments. |
3 | This act would take effect upon passage. |
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