2019 -- S 0251 SUBSTITUTE A

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LC001182/SUB A/2

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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 TAX--NON-COLLECTING RETAILERS,

REFERRERS, AND RETAIL SALE FACILITATORS ACT

     Introduced By: Senators Conley, Seveney, Murray, Pearson, and DiPalma

     Date Introduced: February 07, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. The title of Chapter 44-18.2 of the General Laws entitled "Sales and Use

Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act" is hereby amended to

read as follows:

CHAPTER 44-18.2

Sales and Use Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act

CHAPTER 44-18.2

SALES AND USE TAXES - REMOTE SELLERS, REFERRERS, AND MARKETPLACE

FACILITATORS ACT

     SECTION 2. Section 44-18.2-2 of the General Laws in Chapter 44-18.2 entitled "Sales

and Use Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act" is hereby

amended to read as follows:

     44-18.2-2. Definitions.

     For the purposes of this chapter:

     (1) "Division of taxation" means the Rhode Island department of revenue, division of

taxation. The division may also be referred to in this chapter as the "division of taxation", "tax

division", or "division."

     (2) "In-state customer" means a person or persons who makes a purchase of tangible

personal property, prewritten computer software delivered electronically or by load and leave as

defined in § 44-18-7.1(g)(v), vendor-hosted prewritten computer software, and/or taxable services

as defined under § 44-18-1 et seq. for use, storage, and/or other consumption in this state.

     (3) "In-state software" means software used by in-state customers on their computers,

smartphones, and other electronic and/or communication devices, including information or

software such as cached files, cached software, or "cookies", or other data tracking tools, that are

stored on property in this state or distributed within this state, for the purpose of purchasing

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

leave, vendor-hosted prewritten computer software, and/or taxable services.

     (4) "Marketplace" means a physical or electronic place including, but not limited to, a

store, booth, Internet website, catalog, television or radio broadcast, or a dedicated sales software

application where tangible personal property, prewritten computer software delivered

electronically or by load and leave, vendor-hosted prewritten computer software, and/or taxable

services is/are sold or offered for sale for delivery in this state regardless of whether the tangible

personal property, prewritten computer software delivered electronically or by load and leave, or

vendor-hosted prewritten computer software have a physical presence in the state.

     (5) "Marketplace facilitator" means any person or persons that contracts or otherwise

agrees with a marketplace seller to facilitate for consideration, regardless of whether deducted as

fees from the transaction, the sale of the marketplace seller's products through a physical or

electronic marketplace operated by the person or persons, and engages:

     (a) Directly or indirectly, through one or more affiliated persons in any of the following:

     (i) Transmitting or otherwise communicating the offer or acceptance between the buyer

and seller;

     (ii) Owning or operating the infrastructure, electronic or physical, or technology that

brings buyers and sellers together;

     (iii) Providing a virtual currency that buyers are allowed or required to use to purchase

products from the seller; or

     (iv) Software development or research and development activities related to any of the

activities described in (b) of this subsection (5), if such activities are directly related to a physical

or electronic marketplace operated by the person or an affiliated person; and

     (b) In any of the following activities with respect to the seller's products:

     (i) Payment processing services;

     (ii) Fulfillment or storage services;

     (iii) Listing products for sale;

     (iv) Setting prices;

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     (v) Branding sales as those of the marketplace facilitator;

     (vi) Order taking;

     (vii) Advertising or promotion; or

     (viii) Providing customer service or accepting or assisting with returns or exchanges.

     (6) "Marketplace seller" means a person, not a related party to a marketplace facilitator,

who has an agreement with a marketplace facilitator and makes retail sales of tangible personal

property, prewritten computer software delivered electronically or by load and leave, vendor-

hosted prewritten computer software, and/or taxable services through a marketplace owned,

operated, or controlled by a marketplace facilitator, whether or not such person is required to

register to collect and remit sales tax.

     (47) "Non-collecting retailer" means any person or persons who meets at least one of the

following criteria:

     (A) Uses in-state software to make sales at retail of tangible personal property, prewritten

computer software delivered electronically or by load and leave, and/or taxable services; or

     (B) Sells, leases, or delivers in this state, or participates in any activity in this state in

connection with the selling, leasing, or delivering in this state, of tangible personal property,

prewritten computer software delivered electronically or by load and leave, and/or taxable

services for use, storage, distribution, or consumption within this state. This includes, but shall

not be limited to, any of the following acts or methods of transacting business:

     (i) Engaging in, either directly or indirectly through a referrer, retail sale facilitator, or

other third party, direct response marketing targeted at in-state customers. For purposes of this

subsection, direct response marketing includes, but is not limited to, sending, transmitting, or

broadcasting via flyers, newsletters, telephone calls, targeted electronic mail, text messages,

social media messages, targeted mailings; collecting, analyzing and utilizing individual data on

in-state customers; using information or software, including cached files, cached software, or

"cookies", or other data tracking tools, that are stored on property in or distributed within this

state; or taking any other action(s) that use persons, tangible property, intangible property, digital

files or information, or software in this state in an effort to enhance the probability that the

person's contacts with a potential in-state customer will result in a sale to that in-state customer;

     (ii) Entering into one or more agreements under which a person or persons who has

physical presence in this state refers, either directly or indirectly, potential in-state customers of

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

leave, and/or taxable services to the non-collecting retailer for a fee, commission, or other

consideration whether by an internet-based link or an internet website, or otherwise. An

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agreement under which a non-collecting retailer purchases advertisements from a person or

persons in this state to be delivered in this state on television, radio, in print, on the internet or by

any other medium in this state, shall not be considered an agreement under this subsection (ii),

unless the advertisement revenue or a portion thereof paid to the person or persons in this state

consists of a fee, commission, or other consideration that is based in whole or in part upon sales

of tangible personal property, prewritten computer software delivered electronically or by load

and leave, and/or taxable services; or

     (iii) Using a retail sale facilitator to sell, lease, or deliver in this state, or participate in any

activity in this state in connection with the selling, leasing, or delivering in this state, of tangible

personal property, prewritten computer software delivered electronically or by load and leave,

and/or taxable services for use, storage, or consumption in this state.

     (C) Uses a sales process that includes listing, branding, or selling tangible personal

property, prewritten computer software delivered electronically or by load and leave, and/or

taxable services for sale, soliciting, processing orders, fulfilling orders, providing customer

service and/or accepting or assisting with returns or exchanges occurring in this state, regardless

of whether that part of the process has been subcontracted to an affiliate or third party. The sales

process for which the in-state customer is charged not more than the basic charge for shipping

and handling as used in this subsection shall not include shipping via a common carrier or the

United States mail;

     (D) Offers its tangible personal property, prewritten computer software delivered

electronically or by load and leave, and/or taxable services for sale through one or more retail sale

facilitators that has physical presence in this state;

     (E) Is related to a person that has physical presence in this state, and such related person

with a physical presence in this state:

     (i) Sells tangible personal property, prewritten computer software delivered electronically

or by load and leave, and/or taxable services that are the same or substantially similar to that sold

by a non-collecting retailer under a business name that is the same or substantially similar to that

of the non-collecting retailer;

     (ii) Maintains an office, distribution facility, salesroom, warehouse, storage place, or

other similar place of business in this state to facilitate the delivery of tangible personal property,

prewritten computer software delivered electronically or by load and leave, and/or taxable

services sold by the non-collecting retailer;

     (iii) Uses, with consent or knowledge of the non-collecting retailer, trademarks, service

marks, or trade names in this state that are the same or substantially similar to those used by the

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non-collecting retailer;

     (iv) Delivers or has delivered (except for delivery by common carrier or United States

mail for which the in-state customer is charged not more than the basic charge for shipping and

handling), installs, or assembles tangible personal property in this state, or performs maintenance

or repair services on tangible personal property in this state, which tangible personal property is

sold to in-state customers by the non-collecting retailer;

     (v) Facilitates the delivery of tangible personal property purchased from a non-collecting

retailer but delivered in this state by allowing an in-state customer to pick up the tangible personal

property at an office distribution facility, salesroom, warehouse, storage place, or other similar

place of business maintained in this state; or

     (vi) Shares management, business systems, business practices, computer resources,

communication systems, payroll, personnel, or other such business resources and activities with

the non-collecting retailer, and/or engages in intercompany transactions with the non-collecting

retailer, either or both of which relate to the activities that establish or maintain the non-collecting

retailer's market in this state.

     (F) Any person or persons who meets at least one of the criteria in subsections (4)(7)(A) -

- (4)(7)(E) above shall be presumed to be a non-collecting retailer.

     (G) The term "non-collecting retailer" will no longer apply to any entity that meets the

definition of this subsection effective ninety (90) days after the enactment of this amended

chapter, at which time such entity shall be classified as a "remote seller" as referenced in R.I.

Gen. Laws § 44-18-15.2.

     (58) "Person" means person as defined in § 44-18-6.

     (69) "Referrer" means every person who:

     (A) Contracts or otherwise agrees with a retailer to list and/or advertise for sale in this

state tangible personal property, prewritten computer software delivered electronically or by load

and leave, vendor-hosted prewritten computer software, and/or taxable services in any forum,

including, but not limited to, a catalog or internet website;

     (B) Receives a fee, commission, and/or other consideration from a retailer for the listing

and/or advertisement;

     (C) Transfers, via in-state software, internet link, or otherwise, an in-state customer to the

retailer or the retailer's employee, affiliate, or website to complete a purchase; and

     (D) Does not collect payments from the in-state customer for the transaction.

     (E) A person or persons who engages in the activity set forth in all of the activities set

forth in subsections (69)(A) -- (69)(D) above shall be presumed to be a referrer.

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     (710) "Related" means:

     (A) Having a relationship with the non-collecting retailer within the meaning of the

internal revenue code of 1986 as amended; or

     (B) Having one or more ownership relationships and a purpose of having the ownership

relationship is to avoid the application of this chapter.

     (811) A "retail sale" or "sale at retail" means any retail sale or sale at retail as defined in §

44-18-8.

     (912) "Retail sale facilitator" means any person or persons that facilitates a sale by a

retailer by engaging in the following types of activities:

     (A) Using in-state software to make sales at retail of tangible personal property,

prewritten computer software delivered electronically or by load and leave, and/or taxable

services; or

     (B) Contracting or otherwise agreeing with a retailer to list and/or advertise for sale

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

leave, and/or taxable services in any forum, including, but not limited to, a catalog or internet

website; and

     (C) Either directly or indirectly through agreements or arrangements with third parties,

collecting payments from the in-state customer and transmitting those payments to a retailer. A

person or persons may be a retail sale facilitator regardless of whether they deduct any fees from

the transaction. The division may define in regulation circumstances under which a retail sale

facilitator shall be deemed to facilitate a retail sale.

     (D) A person or persons who engages in the type of activity set forth in subsection (912)

(A) above or both of the types of activities set forth in subsections (912) (B) and (912) (C) above

shall be presumed to be a retail sale facilitator.

     (E) The term "retail sale facilitator" will no longer apply to any entity that meets the

definition of this subsection effective ninety (90) days after the enactment of this amended

chapter, at which time such entity shall be classified as a "marketplace facilitator" as referenced

above in R.I. Gen. Laws § 44-18.2-2(5).

     (130) A "retailer" means retailer as defined in § 44-18-15.

     (141) "State" means the State of Rhode Island and Providence Plantations.

     (152) "Streamlined agreement" means the Streamlined Sales and Use Tax Agreement as

referenced in § 44-18.1-1 et seq.

     (16) "Vendor-hosted prewritten computer software" refers to the same term as defined in

R.I. Gen. Laws § 44-18-7.1(g)(vii) effective October 1, 2018.

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     SECTION 3. Section 44-18.2-3 of the General Laws in Chapter 44-18.2 entitled "Sales

and Use Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act" is hereby

amended to read as follows:

     44-18.2-3. Requirements for non-collecting retailers, referrers, and retail sale

facilitators.

     (A) Except as otherwise provided below in § 44-18.2-4, beginning on the later of July 15,

2017, or two (2) weeks after the enactment of this chapter, and for each tax year thereafter prior

to ninety (90) days after the effective date of the amendment of this chapter, any non-collecting

retailer, referrer, or retail sale facilitator, as defined in this chapter, that in the immediately

preceding calendar year either:

     (i) Has gross revenue from the sale of tangible personal property, prewritten computer

software delivered electronically or by load and leave, and/or has taxable services delivered into

this state equal to or exceeding one hundred thousand dollars ($100,000); or

     (ii) Has sold tangible personal property, prewritten computer software delivered

electronically or by load and leave, and/or taxable services for delivery into this state in two

hundred (200) or more separate transactions shall comply with the requirements in subsections

(EF), (FG), and (GH) as applicable.

     (B) A non-collecting retailer, as defined in this chapter, shall comply with subsection

(E)(F) below if it meets the criteria of either subsection (A)(i) or (A)(ii) above.

     (C) A referrer, as defined in this chapter, shall comply with subsection (FG) below if it

meets the criteria of either subsection (A)(i) or (A)(ii) above.

     (D) A retail sale facilitator, as defined in this chapter, shall comply with subsection (GH)

below if it meets the criteria of either subsection (A)(i) or (A)(ii) above.

     (E) Any noncollecting retailer, retail sale facilitator and/or referrer that is collecting and

remitting sales tax into this state prior to the enactment of this amended chapter, date to be

inserted after enactment, shall be deemed a remote seller and/or marketplace facilitator and/or

referrer and shall continue to collect and remit sales tax.

     Beginning on ninety (90) days after the enactment of this amended chapter, date to be

inserted after enactment, any remote seller, marketplace seller, marketplace facilitator, and/or

referrer, as defined in this chapter, who is not collecting and remitting sales tax shall comply with

the requirements in subsection (I) if that remote seller, marketplace seller, marketplace facilitator,

and/or referrer, as defined in this chapter: (i) has not been collecting or remitting sales tax in this

state and, in the immediately preceding calendar year either:

     (i) Has gross revenue from the sale of tangible personal property, prewritten computer

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software delivered electronically or by load and leave, vendor-hosted prewritten computer

software, and/or has taxable services delivered into this state equal to or exceeding one hundred

thousand dollars ($100,000); or

     (ii) Has sold tangible personal property, prewritten computer software delivered

electronically or by load and leave, vendor-hosted prewritten computer software, and/or taxable

services for delivery into this state in two hundred (200) or more separate transactions.

     (EF) Non-collecting retailer. A non-collecting retailer shall either register in this state for

a permit to make sales at retail and collect and remit sales and use tax on all taxable sales into the

state or:

     (1) Post a conspicuous notice on its website that informs in-state customers that sales or

use tax is due on certain purchases made from the non-collecting retailer and that this state

requires the in-state customer to file a sales or use tax return;

     (2) At the time of purchase, notify in-state customers that sales or use tax is due on

taxable purchases made from the non-collecting retailer and that the state of Rhode Island

requires the in-state customer to file a sales or use tax return;

     (3) Within forty-eight (48) hours of the time of purchase, notify in-state customers in

writing that sales or use tax is due on taxable purchases made from the non-collecting retailer and

that this state requires the in-state customer to file a sales or use tax return reflecting said

purchase;

     (4) On or before January 31 of each year, including January 31, 2018, for purchases made

in calendar year 2017, send a written notice to all in-state customers who have cumulative annual

taxable purchases from the non-collecting retailer totaling one hundred dollars ($100) or more for

the prior calendar year. The notification shall show the name of the non-collecting retailer, the

total amount paid by the in-state customer to the non-collecting retailer in the previous calendar

year, and, if available, the dates of purchases, the dollar amount of each purchase, and the

category or type of the purchase, including, whether the purchase is exempt or not exempt from

taxation in Rhode Island. The notification shall include such other information as the division

may require by rule and regulation. The notification shall state that the state of Rhode Island

requires a sales or use tax return to be filed and sales or use tax to be paid on certain categories or

types of purchases made by the in-state customer from the non-collecting retailer. The

notification shall be sent separately to all in-state customers by first-class mail and shall not be

included with any other shipments or mailings. The notification shall include the words

"Important Tax Document Enclosed" on the exterior of the mailing; and

     (5) Beginning on February 15, 2018, and not later than each February 15 thereafter, a

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non-collecting retailer that has not registered in this state for a permit to make sales at retail and

collect and remit sales and use tax on all taxable sales into the state for any portion of the prior

calendar year, shall file with the division on such form and/or in such format as the division

prescribes an attestation that the non-collecting retailer has complied with the requirements of

subsections (EF) (1) -- (EF) (4) herein.

     (FG) Referrer. At such time during any calendar year, or any portion thereof, that a

referrer receives more than ten thousand dollars ($10,000) from fees, commissions, and/or other

compensation paid to it by retailers with whom it has a contract or agreement to list and/or

advertise for sale tangible personal property, prewritten computer software delivered

electronically or by load and leave, and/or taxable services, said referrer shall within thirty (30)

days provide written notice to all such retailers that the retailers' sales may be subject to this

state's sales and use tax.

     (GH) Retail sale facilitator. Beginning January 15, 2018, and each year thereafter, a retail

sale facilitator shall provide the division of taxation with:

     (i) A list of names and addresses of the retailers for whom during the prior calendar year

the retail sale facilitator collected Rhode Island sales and use tax; and

     (ii) A list of names and addresses of the retailers who during the prior calendar year used

the retail sale facilitator to serve in-state customers but for whom the retail sale facilitator did not

collect Rhode Island sales and use tax.

     (I) Remote sellers, referrers, and marketplace facilitators. A remote seller, referrer, and

marketplace facilitator shall register in this state for a permit to make sales at retail and collect

and remit sales and use tax on all taxable sales into the state.

     (i) A marketplace facilitator shall collect sales and use tax on all sales made through the

marketplace to purchasers in this state whether or not the marketplace seller (1) has or is required

to have a permit to make sales at retail or (2) would have been required to collect and remit sales

and use tax had the sale not been made through the marketplace provider.

     (ii) A marketplace facilitator shall certify to its marketplace sellers that it will collect and

remit sales and use tax on sales of taxable items made through the marketplace. A marketplace

seller that accepts a marketplace provider's collection certificate in good faith may exclude sales

made through the marketplace from the marketplace seller's returns under Chapters 18 and 19 of

Title 44 of the Rhode Island General Laws.

     (iii) A marketplace facilitator with respect to a sale of tangible personal property,

prewritten computer software delivered electronically by load and leave, vendor-hosted

prewritten software, and/or taxable services it facilitates:

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     (A) shall have all the obligations and rights of a retailer under Chapters 18 and 19 of Title

44 of the Rhode Island General Laws and under any regulations adopted pursuant thereto,

including, but not limited to, the duty to obtain a certificate of authority, to collect tax, file

returns, remit tax, and the right to accept a certificate or other documentation from a customer

substantiating an exemption or exclusion from tax, the right to receive a refund or credit allowed

by law; and (B) shall keep such records and information and cooperate with the tax administrator

to ensure the proper collection and remittance of tax imposed, collected, or required to be

collected under Chapters 18 and 19 of Title 44 of the Rhode Island General Laws.

     (iv) A marketplace facilitator shall be subject to audit by the tax administrator with

respect to all retail sales for which it is required to collect and pay the tax imposed under Chapters

18 and 19 of Title 44 of the Rhode Island General Laws. Where the tax administrator audits the

marketplace facilitator, the tax administrator is prohibited from auditing the marketplace seller for

the same retail sales unless the marketplace facilitator seeks relief under this subsection (iv).

     (v) If the marketplace facilitator demonstrates to the tax administrator's satisfaction that

the marketplace facilitator has made a reasonable effort to obtain accurate information from the

marketplace seller about a retail sale and that the failure to collect and pay the correct amount of

tax imposed under Chapters 18 and 19 of Title 44 of the Rhode Island General Laws was due to

incorrect information provided to the marketplace facilitator by the marketplace seller, then the

marketplace facilitator shall be relieved of liability of the tax for that retail sale. This subsection

(v) does not apply with regard to a retail sale for which the marketplace facilitator is the seller or

if the marketplace facilitator and seller are affiliates. Where the marketplace facilitator is relieved

under this subsection (v), the seller is liable for the tax imposed under Chapters 18 and 19 of Title

44 of the Rhode Island General Laws.

     (vi) A class action may not be brought against a marketplace facilitator on behalf of

purchasers arising from or in any way related to an overpayment of sales or use tax collected by

the marketplace facilitator, regardless of whether such action is characterized as a tax refund

claim. Nothing in this subsection (vi) shall affect a purchaser's right to seek a refund as otherwise

allowed by law.

     (HJ) Any person or entity that engages in any activity or activities of a non-collecting

retailer, referrer, and/or retail sale facilitator as defined herein shall be presumed to be a non-

collecting retailer, referrer, and/or retail sale facilitator as applicable even if referred to by another

name or designation. Said person or entity shall be subject to the terms and conditions set forth in

this chapter.

     SECTION 4. Section 44-18.2-4 of the General Laws in Chapter 44-18.2 entitled "Sales

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and Use Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act" is hereby

amended to read as follows:

     44-18.2-4. Exceptions for referrers and retail sale facilitators.

     (A)(i) Notwithstanding the provisions of § 44-18.2-3, no retail sale facilitator shall be

required to comply with the provisions of § 44-18.2-3(GH), for any sale where the retail sale

facilitator within ninety (90) days of the date of the sale has been provided either:

     (1) A copy of the retailer's Rhode Island sales tax permit to make sales at retail in this

state or its resale certificate as applicable; or

     (2) Evidence of a fully completed Rhode Island or Streamlined agreement sales and use

tax exemption certificate.

     (ii) Notwithstanding the provisions of § 44-18.2-3, no referrer shall be required to comply

with the provisions of § 44-18.2-3(FG) for any referral where the referrer within ninety (90) days

of the date of the sale has been provided either:

     (1) A copy of the retailer's Rhode Island sales tax permit to make sales at retail in this

state or its resale certificate as applicable; or

     (2) Evidence of a fully completed Rhode Island or Streamlined agreement sales and use

tax exemption certificate.

     (B) Nothing in this section shall be construed to interfere with the ability of a non-

collecting retailer, referrer, or retail sale facilitator and a retailer to enter into agreements with

each other; provided, however, the terms of said agreements shall not in any way be inconsistent

with or contravene the requirements of this chapter.

     (C) The provisions of subsections (A) and (B) herein will not be applicable as of ninety

(90) days after the effective date of the amendment of this chapter.

     SECTION 5. Section 44-18.2-5 of the General Laws in Chapter 44-18.2 entitled "Sales

and Use Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act" is hereby

amended to read as follows:

     44-18.2-5. Penalties.

     Prior to ninety (90) days after the effective date of the enactment of the amendment of

this chapter or date to be inserted upon enactment, Aany non-collecting retailer, referrer, or retail

sale facilitator that fails to comply with any of the requirements of this chapter shall be subject to

a penalty of ten dollars ($10.00) for each such failure, but not more less than a total penalty of ten

thousand dollars ($10,000) per calendar year. As of ninety (90) days after the effective date of the

enactment of this chapter or date to be inserted after enactment, any remote seller, referrer, or

marketplace facilitator that fails to comply with any of the requirements of this chapter shall be

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subject to a penalty of ten dollars ($10.00) for each such failure, but not less than a total penalty

of ten thousand dollars ($10,000) per calendar year. Each instance of failing to comply with the

requirements of this chapter shall constitute a separate violation for purposes of calculating the

penalty under this section. This penalty shall be in addition to any other applicable penalties

under title 44.

     SECTION 6. Section 44-18.2-6 of the General Laws in Chapter 44-18.2 entitled "Sales

and Use Tax - Non-Collecting Retailers, Referrers, and Retail Sale Facilitators Act" is hereby

amended to read as follows:

     44-18.2-6. Other obligations.

     (A) Nothing in this section affects the obligation of any in-state customer to remit use tax

as to any applicable transaction in which the seller, non-collecting retailer, or retail sale

facilitator, remote seller, marketplace seller, or marketplace facilitator has not collected and

remitted the sales tax for said transaction.

     (B) Nothing in this chapter shall be construed as relieving any other person or entity

otherwise required to collect and remit sales and use tax under applicable Rhode Island law from

continuing to do so.

     (C) In the event that any section of this chapter is later determined to be unlawful, no

person, persons, or entity shall have a cause of action against the person that collected and

remitted the sales and use tax pursuant to this chapter.

     SECTION 7. Section 44-18-15.2 of the General Laws in Chapter 44-18 entitled "Sales

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

     44-18-15.2. "Remote seller" and "remote sale" defined -- Collection of sales and use

tax by remote seller.

     (a) As used in this section:

     (1) "Remote seller" means a person who makes remote sales in this state. any seller, other

than a marketplace facilitator or referrer, who does not have a physical presence in this state and

makes retail sales to purchasers.

     (2) "Remote sale" means a sale into this state for which the seller would not legally be

required to pay, collect, or remit state or local sales and use taxes unless provided by federal law.

     (b) Upon passage of any federal law authorizing states to require remote sellers to collect

and remit sales and use taxes, this state will require a remote seller making remote sales in the

state to pay, collect, and remit sales and use taxes at the rate imposed under § 44-18-18, and in

accordance with the provisions of this article, chapters 18.1 and 19 of this title, and applicable

federal law.

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     SECTION 8. 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 TAX--NON-COLLECTING RETAILERS,

REFERRERS, AND RETAIL SALE FACILITATORS ACT

***

     This act would extend the requirement to collect sales tax to remote sellers in a way that

conforms to a recent U.S. Supreme Court decision making it easier for states to compel collection

of the sales tax from retailers who do not have a physical presence in their state.

     This act would take effect upon passage.

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