2017 -- H 6005

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LC002251

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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: Representative Robert A. Nardolillo

     Date Introduced: March 24, 2017

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 44-18-18, 44-18-19 and 44-18-20 of the General Laws in Chapter

44-18 entitled "Sales and Use Taxes - Liability and Computation" are hereby amended to read as

follows:

     44-18-18. Sales tax imposed.

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

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

percent (6%) three percent (3%) of the gross receipts of the retailer from the sales or rental

charges; provided, that the tax imposed on charges for the rentals applies only to the first period

of not exceeding thirty (30) consecutive calendar days of each rental; provided, further, that for

the period commencing July 1, 1990, the tax rate is seven percent (7%) , commencing July 1,

2017. The tax is paid to the tax administrator by the retailer at the time and in the manner

provided. Excluded from this tax are those living quarters in hotels, rooming houses, or tourist

camps for which the occupant has a written lease for the living quarters which lease covers a

rental period of twelve (12) months or more. In recognition of the work being performed by the

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

states to require remote sellers to collect and remit sales and use taxes, the rate imposed under this

section shall be reduced from seven percent (7%) to six and one-half percent (6.5%). The six and

one-half percent (6.5%) rate shall take effect on the date that the state requires remote sellers to

collect and remit sale and use taxes.

     44-18-19. Collection of sales tax by retailer.

     The retailer shall add the tax imposed by this chapter to the sale price or charge, and

when added the tax constitutes a part of the price or charge, is a debt from the consumer or user to

the retailer, and is recoverable at law in the same manner as other debts; provided, that the

amount of tax that the retailer collects from the consumer or user is as follows:

Amount of Sale Amount of Tax

$0.01 to $ .08 inclusive No Tax

.09 to .24 inclusive .01

.25 to .41 inclusive .02

.42 to .58 inclusive .03

.59 to .74 inclusive .04

.75 to .91 inclusive .05

     .92 to 1.08 inclusive .06

     and where the amount of the sale is more than one dollar and eight cents ($1.08) the

amount of the tax is computed at the rate of six percent (6%); provided, that the amount of tax

that the retailer collects from the consumer or user for the period commencing July 1, 1990 is as

follows:

Amount of Sale Amount of Tax

$ 0.01 to $ .07 inclusive No Tax

.08 to .21 inclusive .01

.22 to .35 inclusive .02

.36 to .49 inclusive .03

.50 to .64 inclusive .04

.65 to .78 inclusive .05

.79 to .92 inclusive .06

     .93 to 1.07 inclusive .07

     and where the amount of the sale is more than one dollar and seven cents ($1.07) the

amount of the tax is computed at the rate of seven percent (7%).

      Amount of Sale Amount of Tax

     $0.01 to $0.15 inclusive No Tax

      .16 to .49 inclusive .01

      .50 to .82 inclusive .02

      .82 to 1.15 inclusive .03

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and where the amount of the sale is more than one dollar and fifteen cents ($1.15) , the amount of

the tax is computed at the rate of three percent (3%).

     44-18-20. Use tax imposed.

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

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

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

trailer, purchased from any retailer at the rate of six percent (6%) three percent (3%) of the sale

price of the property.

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

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

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

(6%) three percent (3%) of the sale price of the motor vehicle, boat, airplane, or trailer.

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

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

mobile homes.

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

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

any casual sale:

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

of the transferor or seller;

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

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

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

subjected to a tax imposed by this chapter;

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

partner; and

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

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

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

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

home; or

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

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

     (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

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

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

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

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

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

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

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

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

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

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

opportunity to be heard, re-determine the tax.

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

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

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

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

within the provisions of this chapter.

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

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

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

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

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

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

activity were conducted in this state.

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

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

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

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

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

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

sales.

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

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

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

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

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

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

remit sales and use taxes.

     SECTION 2. This act shall take effect on July 1, 2017.

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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

***

     This act would reduce the sales and use tax from seven percent (7%) to three percent

(3%).

     This act would take effect on July 1, 2017.

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