2018 -- S 2370

========

LC003710

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

____________

A N   A C T

RELATING TO TAXATION -- PUBLIC SERVICE CORPORATION TAX

     

     Introduced By: Senators Archambault, Picard, P Fogarty, Quezada, and Gallo

     Date Introduced: February 15, 2018

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

1

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

2

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

3

     44-13-13. Taxation of certain tangible personal property.

4

     The lines, cables, conduits, ducts, pipes, machines and machinery, equipment, and other

5

tangible personal property within this state of telegraph, cable, and telecommunications

6

corporations and express corporations, used exclusively in the carrying on of the business of the

7

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

8

construed to exempt any "community antenna television system company" (CATV) from local

9

taxation; and provided, that the tangible personal property of companies exempted from local

10

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

11

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

12

unless the context otherwise requires:

13

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

14

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

15

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

16

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

17

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

18

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

19

doing business within the state of Rhode Island;

 

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

determined in accordance with generally accepted property tax valuation principles.

12

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

13

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

14

Rhode Island on the preceding December 31.

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

revenue and appropriated directly to the department;

34

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

 

LC003710 - Page 2 of 4

1

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

2

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

3

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

4

prior fiscal year.

5

     SECTION 2. This act shall take effect upon passage.

========

LC003710

========

 

LC003710 - Page 3 of 4

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- PUBLIC SERVICE CORPORATION TAX

***

1

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

2

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

3

reduction would take into account physical deterioration and functional and economic

4

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

5

     This act would take effect upon passage.

========

LC003710

========

 

LC003710 - Page 4 of 4