2016 -- S 2608

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LC005109

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TAXATION - PUBLIC SERVICE CORPORATION TAX

     Introduced By: Senators Archambault, Lombardi, DiPalma, Cote, and Walaska

     Date Introduced: February 25, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-13-13 of the General Laws in Chapter 44-13 entitled "Public

Service Corporation Tax" is hereby amended to read as follows:

     44-13-13. Taxation of certain tangible personal property. -- The lines, cables,

conduits, ducts, pipes, machines and machinery, equipment, and other tangible personal property

within this state of telegraph, cable, and telecommunications corporations and express

corporations, used exclusively in the carrying on of the business of the corporation shall be

exempt from local taxation; provided, that nothing in this section shall be construed to exempt

any "community antenna television system company" (CATV) from local taxation; and provided,

that the tangible personal property of companies exempted from local taxation by the provisions

of this section shall be subject to taxation in the following manner:

      (1) Definitions. - Whenever used in this section and in §§ 44-13-13.1 and 44-13-13.2,

unless the context otherwise requires:

      (i) "Average assessment ratio" means the total assessed valuation as certified on tax rolls

for the reference year divided by the full market value of the valuation as computed by the Rhode

Island department of revenue in accordance with § 16-7-21;

      (ii) "Average property tax rate" means the statewide total property levy divided by the

statewide total assessed valuation as certified on tax rolls for the most recent tax year;

      (iii) "Company" means any telegraph, cable, telecommunications, or express company

doing business within the state of Rhode Island;

      (iv) "Department" means the department of revenue;

      (v) "Population" shall mean the population as determined by the most recent census;

      (vi) "Reference year" means the calendar year two (2) years prior to the calendar year

preceding that in which the tax payment provided for by this section is levied;

      (vii) "Value of tangible personal property" of companies means the net book value of

tangible personal property of each company doing business in this state as computed by the

department of revenue. "Net book value" means the original cost less accumulated depreciation;

provided, that no tangible personal property shall be depreciated more than seventy-five percent

(75%) of its original cost; and provided, further, that the accumulated depreciation reduction shall

take into account physical deterioration, functional obsolescence, and economic obsolescence

determined in accordance with generally accepted property tax valuation principles.

      (2) On or before March 1 of each year, each company shall declare to the department, on

forms provided by the department, the value of its tangible personal property in the state of

Rhode Island on the preceding December 31.

      (3) On or before April 1, 1982 and each April 1 thereafter of each year, the division of

property valuation shall certify to the tax administrator the average property tax rate, the average

assessment ratio, and the value of tangible personal property of each company.

      (4) The tax administrator shall apply the average assessment ratio and the average tax

rate to the value of tangible personal property of each company and, by April 15 of each year,

shall notify the companies of the amount of tax due. For each filing relating to tangible personal

property as of December 31, 2008 and thereafter the tax rate applied by the tax administrator shall

be not less than the rate applied in the prior year.

      (5) The tax shall be due and payable within sixty (60) days of the mailing of the notice

by the tax administrator. If the entire tax is not paid to the tax administrator when due, there shall

be added to the unpaid portion of the tax, and made a part of the tax, interest at the rate provided

for in § 44-1-7 from the date the tax was due until the date of the payment. The amount of any

tax, including interest, imposed by this section shall be a debt due from the company to the state,

shall be recoverable at law in the same manner as other debts, and shall, until collected, constitute

a lien upon all the company's property located in this state.

      (6) The proceeds from the tax shall be allocated in the following manner:

      (i) Payment of reasonable administrative expenses incurred by the department of

revenue, not to exceed three quarters of one percent (.75%), the payment to be identified as

general revenue and appropriated directly to the department;

      (ii) The remainder of the proceeds shall be deposited in a restricted revenue account and

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shall be apportioned to the cities and towns within this state on the basis of the ratio of the city or

town population to the population of the state as a whole. Estimated revenues shall be distributed

to cities and towns by July 30 and may be recorded as a receivable by each city and town for the

prior fiscal year.

     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 - PUBLIC SERVICE CORPORATION TAX

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     This act would clarify depreciation in connection with the calculation of the net book

value of a company's tangible personal property, by providing that the accumulated depreciation

reduction would take into account physical deterioration and functional and economic

obsolescence determined in accordance with generally accepted property tax valuation principles.

     This act would take effect upon passage.

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