2017 -- H 5355

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LC001175

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO TAXATION -- SALES AND USE TAXES--LIABILITY AND

COMPUTATION

     

     Introduced By: Representatives Marshall, Hearn, O'Brien, Costantino, and Tobon

     Date Introduced: February 02, 2017

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 44-18-18 and 44-18-20 of the General Laws in Chapter 44-18

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entitled "Sales and Use Taxes - Liability and Computation" are hereby amended to read as

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follows:

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     44-18-18. Sales tax imposed.

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     (a) A tax is imposed upon sales at retail in this state including charges for rentals of living

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quarters in hotels as defined in § 42-63.1-2, rooming houses, or tourist camps, at the rate of six

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percent (6%) of the gross receipts of the retailer from the sales or rental charges; provided, that

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the tax imposed on charges for the rentals applies only to the first period of not exceeding thirty

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(30) consecutive calendar days of each rental; provided, further, that for the period commencing

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July 1, 1990, the tax rate is seven percent (7%). The tax is paid to the tax administrator by the

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retailer at the time and in the manner provided. Excluded from this tax are those living quarters in

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hotels, rooming houses, or tourist camps for which the occupant has a written lease for the living

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quarters which lease covers a rental period of twelve (12) months or more. In recognition of the

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work being performed by the streamlined sales and use tax governing board, upon passage of any

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federal law that authorizes states to require remote sellers to collect and remit sales and use taxes,

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the rate imposed under this section shall be reduced from seven percent (7%) to six and one-half

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percent (6.5%). The six and one-half percent (6.5%) rate shall take effect on the date that the state

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requires remote sellers to collect and remit sale and use taxes.

 

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     (b) For the period commencing July 1, 2017, the sales tax rate shall decrease to six and

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three quarters percent (6.75%) and shall continue to decrease by one quarter percent (.25%) in

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each fiscal year thereafter until it reaches the level of six and one quarter percent (6.25%).

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     44-18-20. Use tax imposed.

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     (a) An excise tax is imposed on the storage, use, or other consumption in this state of

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tangible personal property; prewritten computer software delivered electronically or by load and

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leave; or services as defined in § 44-18-7.3, including a motor vehicle, a boat, an airplane, or a

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trailer, purchased from any retailer at the rate of six percent (6%) of the sale price of the property.

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     (b) An excise tax is imposed on the storage, use, or other consumption in this state of a

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motor vehicle, a boat, an airplane, or a trailer purchased from other than a licensed motor vehicle

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dealer or other than a retailer of boats, airplanes, or trailers respectively, at the rate of six percent

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(6%) of the sale price of the motor vehicle, boat, airplane, or trailer.

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     (c) The word "trailer," as used in this section and in § 44-18-21, means and includes those

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defined in § 31-1-5(a) -- (e) and also includes boat trailers, camping trailers, house trailers, and

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mobile homes.

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     (d) Notwithstanding the provisions contained in this section and in § 44-18-21 relating to

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the imposition of a use tax and liability for this tax on certain casual sales, no tax is payable in

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any casual sale:

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     (1) When the transferee or purchaser is the spouse, mother, father, brother, sister, or child

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of the transferor or seller;

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     (2) When the transfer or sale is made in connection with the organization, reorganization,

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dissolution, or partial liquidation of a business entity, provided:

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     (i) The last taxable sale, transfer, or use of the article being transferred or sold was

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subjected to a tax imposed by this chapter;

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     (ii) The transferee is the business entity referred to or is a stockholder, owner, member, or

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partner; and

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     (iii) Any gain or loss to the transferor is not recognized for income tax purposes under the

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provisions of the federal income tax law and treasury regulations and rulings issued thereunder;

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     (3) When the sale or transfer is of a trailer, other than a camping trailer, of the type

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ordinarily used for residential purposes and commonly known as a house trailer or as a mobile

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home; or

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     (4) When the transferee or purchaser is exempt under the provisions of § 44-18-30 or

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other general law of this state or special act of the general assembly of this state.

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     (e) The term "casual" means a sale made by a person other than a retailer, provided, that

 

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in the case of a sale of a motor vehicle, the term means a sale made by a person other than a

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licensed motor vehicle dealer or an auctioneer at an auction sale. In no case is the tax imposed

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under the provisions of subsections (a) and (b) of this section on the storage, use, or other

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consumption in this state of a used motor vehicle less than the product obtained by multiplying

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the amount of the retail dollar value at the time of purchase of the motor vehicle by the applicable

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tax rate; provided, that where the amount of the sale price exceeds the amount of the retail dollar

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value, the tax is based on the sale price. The tax administrator shall use as his or her guide the

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retail dollar value as shown in the current issue of any nationally recognized, used-vehicle guide

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for appraisal purposes in this state. On request within thirty (30) days by the taxpayer after

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payment of the tax, if the tax administrator determines that the retail dollar value as stated in this

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subsection is inequitable or unreasonable, he or she shall, after affording the taxpayer reasonable

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opportunity to be heard, re-determine the tax.

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     (f) Every person making more than five (5) retail sales of tangible personal property or

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prewritten computer software delivered electronically or by load and leave, or services as defined

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in § 44-18-7.3 during any twelve-month (12) period, including sales made in the capacity of

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assignee for the benefit of creditors or receiver or trustee in bankruptcy, is considered a retailer

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within the provisions of this chapter.

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     (g) (1) "Casual sale" includes a sale of tangible personal property not held or used by a

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seller in the course of activities for which the seller is required to hold a seller's permit or permits

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or would be required to hold a seller's permit or permits if the activities were conducted in this

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state, provided that the sale is not one of a series of sales sufficient in number, scope, and

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character (more than five (5) in any twelve-month (12) period) to constitute an activity for which

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the seller is required to hold a seller's permit or would be required to hold a seller's permit if the

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activity were conducted in this state.

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     (2) Casual sales also include sales made at bazaars, fairs, picnics, or similar events by

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nonprofit organizations, that are organized for charitable, educational, civic, religious, social,

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recreational, fraternal, or literary purposes during two (2) events not to exceed a total of six (6)

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days duration each calendar year. Each event requires the issuance of a permit by the division of

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taxation. Where sales are made at events by a vendor that holds a sales tax permit and is not a

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nonprofit organization, the sales are in the regular course of business and are not exempt as casual

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sales.

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     (h) The use tax imposed under this section for the period commencing July 1, 1990, is at

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the rate of seven percent (7%). In recognition of the work being performed by the streamlined

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sales and use tax governing board, upon passage of any federal law that authorizes states to

 

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require remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the

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first (1st) state fiscal quarter following the change, the rate imposed under § 44-18-18 shall be

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reduced from seven percent (7.0%) to six and one-half percent (6.5%). The six and one- half

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percent (6.5%) rate shall take effect on the date that the state requires remote sellers to collect and

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remit sales and use taxes.

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     For the period commencing July 1, 2017, the use tax rate shall decrease to six and three

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quarters percent (6.75%) and shall continue to decrease by one quarter percent (.25%) in each

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fiscal year thereafter until it reaches the level of six and one quarter percent (6.25%).

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     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

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     This act would reduce the sales and use tax, commencing July 1, 2017, from the current

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level of seven percent (7%) in yearly increments of one quarter percent (.25%), until the level of

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six and one quarter percent (6.25%) is reached.

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     This act would take effect upon passage.

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