H7310

	2020 -- H 7310
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	LC003213
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	STATE OF RHODE ISLAND
	IN GENERAL ASSEMBLY
	JANUARY SESSION, A.D. 2020
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	A N A C T
	RELATING TO TAXATION -- SALES AND USE TAXES

	Introduced By: Representatives Shanley, Barros, and Casimiro
	Date Introduced: January 24, 2020
	Referred To: House Finance
	It is enacted by the General Assembly as follows:
1	SECTION 1. Section 44-18-18 of the General Laws in Chapter 44-18 entitled "Sales and
2	Use Taxes - Liability and Computation" is hereby amended to read as follows:
3	44-18-18. Sales tax imposed.
4	(a) A tax is imposed upon sales at retail in this state, including charges for rentals of
5	living quarters in hotels as defined in § 42-63.1-2, rooming houses, or tourist camps, at the rate of
6	six percent (6%) of the gross receipts of the retailer from the sales or rental charges; provided,
7	that the tax imposed on charges for the rentals applies only to the first period of not exceeding
8	thirty (30) consecutive calendar days of each rental; provided, further, that for the period
9	commencing July 1, 1990, the tax rate is seven percent (7%). The tax is paid to the tax
10	administrator by the retailer at the time and in the manner provided. Excluded from this tax are
11	those living quarters in hotels, rooming houses, or tourist camps for which the occupant has a
12	written lease for the living quarters which lease covers a rental period of twelve (12) months or
13	more.
14	(b) Sales tax generated within a particular city or town shall be allocated to said city or
15	town at the rate of one-half of one percent (0.05%). All sums received by the division of taxation
16	under this subsection as taxes, penalties, or forfeitures, interest, costs of suit, and fines shall be
17	distributed at least quarterly and credited and paid by the state treasurer to the city or town where
18	the sales are generated.
19	SECTION 2. Section 44-5-12.1 of the General Laws in Chapter 44-5 entitled "Levy and

1	Assessment of Local Taxes" is hereby amended to read as follows:
2	44-5-12.1. Assessment of tangible personal property.
3	(a) All tangible personal property subject to taxation shall be assessed for taxation based
4	on the original purchase price (new or used) including all costs such as freight and installation.
5	Assets will be classified and depreciated as defined in this section.
6	(b) The following classification and depreciation table shall be used in determining the
7	assessed value of tangible personal property.
8	State of Rhode Island Tangible Property Classification
9	Class of Assets Class I Short Life Class II Mid-Life Class III
10	Long Life
11	Age 1-5 yrs 6-12 yrs 13+ yrs
12	1 95 95 95
13	2 80 90 90
14	3 60 80 85
15	4 30 70 80
16	5 20 60 75
17	6 20 50 70
18	7 20 40 65
19	8 20 30 60
20	9 20 30 55
21	10 20 30 50
22	11 20 30 45
23	12 20 30 40
24	13 20 30 35
25	14 20 30 30
26	15+ 20 30 30
27	Assets Shall Not be Trended
28	(c) Assets shall be classified on an annual basis by the Rhode Island Association of
29	Assessing Officers' Personal Property Committee based on the following table:
30	INDUSTRY GROUP IN YEARS CLASS
31	Agriculture machinery and equipment II
32	Aircraft and all helicopters II
33	Amusement and theme parks II
34	Apparel and fabricated textile manufacturing II
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1	Automobile repair shops II
2	Bakeries and confectionery production II
3	Barber and beauty shops II
4	Billboards III
5	Brewery equipment not used directly in manufacturing II
6	Cable television: All equipment including set top boxes, remotes, and other
7	related equipment II
8	aerial, underground, and drops, including MDUS III
9	Canneries and frozen food production II
10	Cement processing III
11	Chemical and allied production II
12	Clay products processing III
13	Cold storage and ice-making equipment III
14	Cold storage warehouse equipment II
15	Computers, personal computers (PC), laptops, tablets, cellphones,
16	mainframe/servers, peripherals, keyboard, mouse I
17	Condiments, processing II
18	Construction equipment, general construction, backhoes, forklifts, loaders,
19	cranes, unregistered vehicles II
20	Dairy products processing II
21	Data handling equipment, except computers II
22	printers, copiers, bridges, routers and gateways II
23	Distilling II
24	Electrical equipment not used in manufacturing II
25	Electronic equipment II
26	Fabricated metal products/special tools II
27	Fishing equipment, excluding boats and barges, lines, nets I
28	Food and beverage production II
29	Fur processing II
30	Gas distribution, total distribution equipment III
31	Glass and glass products/special tools II
32	Grain and grain mill products processing III
33	Gypsum products III
34	Hand tools II
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1	Hospital furnishings and equipment II
2	Hotel and motel furnishings and equipment II
3	Jewelry products and pens II
4	Knitwear and knit products, ex, work uniforms I
5	Laundry equipment II
6	Leather and leather products II
7	Logging, timber cutting II
8	Marine construction II
9	Meatpacking II
10	Medical and dental supply production II
11	Metalworking machinery processing II
12	Mining and quarrying II
13	Motion picture and television production II
14	Motor vehicle and parts/special tools II
15	Office furniture and equipment II
16	Optical lenses and instrument processing II
17	Paints and varnishes I
18	Petroleum refining III
19	pipeline transportation III
20	Plastics manufacturing I/II
21	Plastic products processing/special tools II
22	Primary metals production, nonferrous and foundry products III
23	special tools III
24	Primary steel mill products III
25	Printing and publishing II
26	Professional and scientific instruments II
27	Radio and television, broadcasting II
28	Railroad transportation equipment II
29	locomotive II
30	Recreation and amusement II
31	Retail trades, fixtures and equipment II
32	Residential furniture II
33	Restaurant and bar equipment II
34	Restaurant equipment, fast foods II
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1	Rubber products processing/special tools II
2	Sawmills, permanent/portable II.
3	Service establishments II
4	Ship and boat building equipment/special tools II
5	Soft drink processing and bottling II
6	Stone products processing III
7	Telecommunications, local and interstate II
8	analog switching II
9	circuit, digital, analog, optic II
10	information/origination equipment I/II
11	smart phones I
12	metallic cable III
13	fiber cable, poles, conduit III
14	all other equipment II
15	Telecommunications, cellular
16	analog/digital switching II
17	radio frequency channel and control II
18	power equipment II
19	antennae II
20	towers III
21	transmission equipment II
22	cellular phones I
23	Textile products, including finishing and dyeing II
24	yarn, thread and woven fabrics II
25	Theater equipment II
26	Utilities/power production III
27	generation, transmission, or distribution equipment III
28	Waste reduction and resource recovery II
29	Water transportation III
30	vessels, barges and tugs III
31	Water utilities III
32	Wharves, docks and piers III
33	Wholesale trade fixtures and equipment II
34	Wood products and furniture manufacturing II
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1	(d) Any industry, group, or asset not enumerated in subsection (c) of this section, shall be
2	categorized as class II.
3	(e) Commencing January 1, 2021, the tangible tax assessed against any business may be
4	phased out in accordance with chapter 34.2 of title 44.
5	SECTION 3. Title 44 of the General Laws entitled "TAXATION" is hereby amended by
6	adding thereto the following chapter:
7	CHAPTER 34.2
8	TANGIBLE BUSINESS TAX ELIMINATION ACT OF 2020
9	44-34.2-1. Tangible business tax phase-out.
10	(a) Notwithstanding the provisions of chapter 3 of title 44, or any other provisions to the
11	contrary, the tangible tax established by § 44-3-1 may be phased out. The phase-out shall apply to
12	all personal property located within the state that is owned by any individuals, partnerships or
13	corporations.
14	(b) Pursuant to the provisions of this section, all tangible tax shall be assessed a value
15	according to the provisions of § 44-5-12.1.
16	(c)(1) The tangible tax phase-out shall commence with the tangible tax bills mailed to
17	taxpayers for the fiscal year 2021. The phase-out, beyond fiscal year 2025, shall be subject to
18	annual review and appropriation by the general assembly. The tax assessors of the various cities
19	and towns and fire districts shall reduce the average retail value of each class of property assessed
20	by using the prorated exemptions from the following table:
21	Percent of tax reduced
22	fiscal year 2021 20%
23	fiscal year 2022 40%
24	fiscal year 2023 60%
25	fiscal year 2024 80%
26	fiscal years 2025 and thereafter 100%.
27	(2) The tax rates and ratios of assessment shall be maintained at a level identical to the
28	level in effect for fiscal year 2021 for each city, town, and fire district.
29	(d) The state shall reimburse the various cities and towns and fire districts fifty percent
30	(50%) of the lost revenue each year during the phase out. This amount shall be in addition to any
31	state aid provided.
32	(e) If any provision of this chapter shall be held invalid by any court of competent
33	jurisdiction, the remainder of this chapter and the applications of the provisions hereof shall not
34	be affected thereby.
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1	SECTION 4. 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
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1	This act would phase out the tangible tax for businesses over five (5) years, while
2	reimbursing the city, towns, and fire districts fifty percent (50%) of the revenue lost. The act
3	would also provide that each city or town would receive one-half of one percent (0.05%) of any
4	sales tax revenue generated within said city or town.
5	This act would take effect upon passage.
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