2019 -- H 5098

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LC000149

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

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

COMPUTATION

     

     Introduced By: Representatives McNamara, Corvese, Jackson, McLaughlin, and Fellela

     Date Introduced: January 10, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-18-7.3 of the General Laws in Chapter 44-18 entitled "Sales and

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Use Taxes - Liability and Computation" is hereby amended to read as follows:

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     44-18-7.3. Services defined.

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     (a) "Services" means all activities engaged in for other persons for a fee, retainer,

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commission, or other monetary charge, which activities involve the performance of a service in

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this state as distinguished from selling property.

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     (b) The following businesses and services performed in this state, along with the

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applicable 2007 North American Industrial Classification System (NAICS) codes, are included in

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the definition of services:

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     (1) Taxicab and limousine services including but not limited to:

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     (i) Taxicab services including taxi dispatchers (485310); and

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     (ii) Limousine services (485320).

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     (2) Other road transportation service including but not limited to:

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     (i) Charter bus service (485510);

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     (ii) "Transportation network companies" (TNC) defined as an entity that uses a digital

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network to connect transportation network company riders to transportation network operators

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who provide prearranged rides. Any TNC operating in this state is a retailer as provided in § 44-

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18-15 and is required to file a business application and registration form and obtain a permit to

 

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make sales at retail with the tax administrator, to charge, collect, and remit Rhode Island sales

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and use tax; and

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     (iii) All other transit and ground passenger transportation (485999).

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     (3) Pet care services (812910) except veterinary and testing laboratories services.

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     (4)(i) "Room reseller" or "reseller" means any person, except a tour operator as defined in

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§ 42-63.1-2, having any right, permission, license, or other authority from or through a hotel as

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defined in § 42-63.1-2, to reserve, or arrange the transfer of occupancy of, accommodations the

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reservation or transfer of which is subject to this chapter, such that the occupant pays all or a

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portion of the rental and other fees to the room reseller or reseller. Room reseller or reseller shall

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include, but not be limited to, sellers of travel packages as defined in this section.

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Notwithstanding the provisions of any other law, where said reservation or transfer of occupancy

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is done using a room reseller or reseller, the application of the sales and use tax under §§ 44-18-

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18 and 44-18-20, and the hotel tax under § 44-18-36.1 shall be as follows: The room reseller or

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reseller is required to register with, and shall collect and pay to, the tax administrator the sales

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and use and hotel taxes, with said taxes being calculated upon the amount of rental and other fees

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paid by the occupant to the room reseller or reseller, less the amount of any rental and other fees

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paid by the room reseller or reseller to the hotel. The hotel shall collect and pay to the tax

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administrator said taxes upon the amount of rental and other fees paid to the hotel by the room

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reseller or reseller and/or the occupant. No assessment shall be made by the tax administrator

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against a hotel because of an incorrect remittance of the taxes under this chapter by a room

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reseller or reseller. No assessment shall be made by the tax administrator against a room reseller

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or reseller because of an incorrect remittance of the taxes under this chapter by a hotel. If the

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hotel has paid the taxes imposed under this chapter, the occupant and/or room reseller or reseller,

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as applicable, shall reimburse the hotel for said taxes. If the room reseller or reseller has paid said

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taxes, the occupant shall reimburse the room reseller or reseller for said taxes. Each hotel and

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room reseller or reseller shall add and collect, from the occupant or the room reseller or the

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reseller, the full amount of the taxes imposed on the rental and other fees. When added to the

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rental and other fees, the taxes shall be a debt owed by the occupant to the hotel or room reseller

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or reseller, as applicable, and shall be recoverable at law in the same manner as other debts. The

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amount of the taxes collected by the hotel and/or room reseller or reseller from the occupant

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under this chapter shall be stated and charged separately from the rental and other fees, and shall

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be shown separately on all records thereof, whether made at the time the transfer of occupancy

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occurs, or on any evidence of the transfer issued or used by the hotel or the room reseller or the

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reseller. A room reseller or reseller shall not be required to disclose to the occupant the amount of

 

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tax charged by the hotel; provided, however, the room reseller or reseller shall represent to the

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occupant that the separately stated taxes charged by the room reseller or reseller include taxes

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charged by the hotel. No person shall operate a hotel in this state, or act as a room reseller or

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reseller for any hotel in the state, unless the tax administrator has issued a permit pursuant to §

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44-19-1.

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     (ii) "Travel package" means a room, or rooms, bundled with one or more other, separate

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components of travel such as air transportation, car rental, or similar items, which travel package

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is charged to the customer or occupant for a single, retail price. When the room occupancy is

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bundled for a single consideration, with other property, services, amusement charges, or any other

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items, the separate sale of which would not otherwise be subject to tax under this chapter, the

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entire single consideration shall be treated as the rental or other fees for room occupancy subject

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to tax under this chapter; provided, however, that where the amount of the rental, or other fees for

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room occupancy is stated separately from the price of such other property, services, amusement

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charges, or other items, on any sales slip, invoice, receipt, or other statement given the occupant,

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and such rental and other fees are determined by the tax administrator to be reasonable in relation

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to the value of such other property, services, amusement charges, or other items, only such

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separately stated rental and other fees will be subject to tax under this chapter. The value of the

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transfer of any room, or rooms, bundled as part of a travel package may be determined by the tax

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administrator from the room reseller's and/or reseller's and/or hotel's books and records that are

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kept in the regular course of business.

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     (5) Investigation, Guard, and Armored Car Services (56161).

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     (c) All services as defined herein are required to file a business application and

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registration form and obtain a permit to make sales at retail with the tax administrator, to charge,

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collect, and remit Rhode Island sales and use tax, except self-employed sole practicing

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investigators operating independent of any employment relationship, partnership, corporation,

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limited liability company or association, shall be exempt from the requirements of this section.

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     (d) The tax administrator is authorized to promulgate rules and regulations in accordance

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with the provisions of chapter 35 of title 42 to carry out the provisions, policies, and purposes of

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this chapter.

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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 exempt self-employed sole practicing investigators operating

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independently from any partnership, corporation, limited liability company or association from

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the sale tax imposed on services.

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     This act would take effect upon passage.

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