2020 -- H 7532 SUBSTITUTE A | |
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LC004445/SUB A | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
____________ | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND | |
COMPUTATION | |
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Introduced By: Representatives Kennedy, Abney, Edwards, Azzinaro, and O'Brien | |
Date Introduced: February 12, 2020 | |
Referred To: House Finance | |
(Dept. of Revenue) | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Sections 44-18-7 and 44-18-7.1 of the General Laws in Chapter 44-18 entitled |
2 | "Sales and Use Taxes - Liability and Computation" are hereby amended to read as follows: |
3 | 44-18-7. Sales defined. |
4 | "Sales" means and includes: |
5 | (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or |
6 | otherwise, in any manner or by any means of tangible personal property for a consideration. |
7 | "Transfer of possession," "lease," or "rental" includes transactions found by the tax administrator |
8 | to be in lieu of a transfer of title, exchange, or barter. |
9 | (2) The producing, fabricating, processing, printing, or imprinting of tangible personal |
10 | property for a consideration for consumers who furnish, either directly or indirectly, the materials |
11 | used in the producing, fabricating, processing, printing, or imprinting. |
12 | (3) The furnishing and distributing of tangible personal property for a consideration by |
13 | social, athletic, and similar clubs and fraternal organizations to their members or others. |
14 | (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks, |
15 | including any cover, minimum, entertainment, or other charge in connection therewith. |
16 | (5) A transaction whereby the possession of tangible personal property is transferred, but |
17 | the seller retains the title as security for the payment of the price. |
18 | (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate |
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1 | commerce, of tangible personal property from the place where it is located for delivery to a point |
2 | in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental, |
3 | conditional or otherwise, in any manner or by any means whatsoever, of the property for a |
4 | consideration. |
5 | (7) A transfer for a consideration of the title or possession of tangible personal property, |
6 | which has been produced, fabricated, or printed to the special order of the customer, or any |
7 | publication. |
8 | (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam, |
9 | refrigeration, and water. |
10 | (9)(i) The furnishing for consideration of intrastate, interstate, and international |
11 | telecommunications service sourced in this state in accordance with §§ 44-18.1-15 and 44-18.1-16 |
12 | and all ancillary services, and any maintenance services of telecommunication equipment other |
13 | than as provided for in § 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this title only, |
14 | telecommunication service does not include service rendered using a prepaid telephone calling |
15 | arrangement. |
16 | (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance with |
17 | the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 -- 126), subject to the specific |
18 | exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8 and 44-18- |
19 | 12, mobile telecommunications services that are deemed to be provided by the customer's home |
20 | service provider are subject to tax under this chapter if the customer's place of primary use is in this |
21 | state regardless of where the mobile telecommunications services originate, terminate, or pass |
22 | through. Mobile telecommunications services provided to a customer, the charges for which are |
23 | billed by or for the customer's home service provider, shall be deemed to be provided by the |
24 | customer's home service provider. |
25 | (10) The furnishing of service for transmission of messages by telegraph, cable, or radio |
26 | and the furnishing of community antenna television, subscription television, and cable television |
27 | services. |
28 | (11) The rental of living quarters in any hotel, rooming house, or tourist camp. |
29 | (12) The transfer for consideration of prepaid telephone calling arrangements and the |
30 | recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§ 44- |
31 | 18.1-11 and 44-18.1-15. "Prepaid telephone calling arrangement" means and includes prepaid |
32 | calling service and prepaid wireless calling service. |
33 | (13) The sale, storage, use, or other consumption of over-the-counter drugs as defined in § |
34 | 44-18-7.1(h)(ii). |
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1 | (14) The sale, storage, use, or other consumption of prewritten computer software delivered |
2 | electronically or by load and leave as defined in § 44-18-7.1(g)(v). |
3 | (15) The sale, storage, use, or other consumption of vendor-hosted prewritten computer |
4 | software as defined in § 44-18-7.1(g)(vii). |
5 | (16) The sale to, or storage, use, or other consumption by, an end-user of specified digital |
6 | products as defined in § 44-18-7.1(x), including the right to use the specified digital products on a |
7 | permanent or less than permanent basis and regardless of whether the purchaser is required to make |
8 | continued payments for such right. |
9 | (17) For the purposes of §§ 44-18-7(14) through 44-18-7(16) above, "sale" includes, but is |
10 | not limited to, any license, lease, or rental of the products enumerated in those sections. |
11 | (17)(18) The sale, storage, use, or other consumption of medical marijuana as defined in § |
12 | 21-28.6-3. |
13 | (18)(19) The furnishing of services in this state as defined in § 44-18-7.3. |
14 | 44-18-7.1. Additional definitions. |
15 | (a) "Agreement" means the streamlined sales and use tax agreement. |
16 | (b) "Alcoholic beverages" means beverages that are suitable for human consumption and |
17 | contain one-half of one percent (.5%) or more of alcohol by volume. |
18 | (c) "Bundled transaction" is the retail sale of two or more products, except real property |
19 | and services to real property, where (1) The products are otherwise distinct and identifiable, and |
20 | (2) The products are sold for one non-itemized price. A "bundled transaction" does not include the |
21 | sale of any products in which the "sales price" varies, or is negotiable, based on the selection by |
22 | the purchaser of the products included in the transaction. |
23 | (i) "Distinct and identifiable products" does not include: |
24 | (A) Packaging -- such as containers, boxes, sacks, bags, and bottles -- or other materials -- |
25 | such as wrapping, labels, tags, and instruction guides -- that accompany the "retail sale" of the |
26 | products and are incidental or immaterial to the "retail sale" thereof. Examples of packaging that |
27 | are incidental or immaterial include grocery sacks, shoeboxes, dry cleaning garment bags, and |
28 | express delivery envelopes and boxes. |
29 | (B) A product provided free of charge with the required purchase of another product. A |
30 | product is "provided free of charge" if the "sales price" of the product purchased does not vary |
31 | depending on the inclusion of the products "provided free of charge." |
32 | (C) Items included in the member state's definition of "sales price," pursuant to appendix |
33 | C of the agreement. |
34 | (ii) The term "one non-itemized price" does not include a price that is separately identified |
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1 | by product on binding sales or other supporting sales-related documentation made available to the |
2 | customer in paper or electronic form including, but not limited to, an invoice, bill of sale, receipt, |
3 | contract, service agreement, lease agreement, periodic notice of rates and services, rate card, or |
4 | price list. |
5 | (iii) A transaction that otherwise meets the definition of a "bundled transaction" as defined |
6 | above, is not a "bundled transaction" if it is: |
7 | (A) The "retail sale" of tangible personal property and a service where the tangible personal |
8 | property is essential to the use of the service, and is provided exclusively in connection with the |
9 | service, and the true object of the transaction is the service; or |
10 | (B) The "retail sale" of services where one service is provided that is essential to the use or |
11 | receipt of a second service and the first service is provided exclusively in connection with the |
12 | second service and the true object of the transaction is the second service; or |
13 | (C) A transaction that includes taxable products and nontaxable products and the "purchase |
14 | price" or "sales price" of the taxable products is de minimis. |
15 | 1. De minimis means the seller's "purchase price" or "sales price" of the taxable products |
16 | is ten percent (10%) or less of the total "purchase price" or "sales price" of the bundled products. |
17 | 2. Sellers shall use either the "purchase price" or the "sales price" of the products to |
18 | determine if the taxable products are de minimis. Sellers may not use a combination of the |
19 | "purchase price" and "sales price" of the products to determine if the taxable products are de |
20 | minimis. |
21 | 3. Sellers shall use the full term of a service contract to determine if the taxable products |
22 | are de minimis; or |
23 | (D) The "retail sale" of exempt tangible personal property and taxable tangible personal |
24 | property where: |
25 | 1. The transaction includes "food and food ingredients," "drugs," "durable medical |
26 | equipment," "mobility enhancing equipment," "over-the-counter drugs," "prosthetic devices" (all |
27 | as defined in this section) or medical supplies; and |
28 | 2. Where the seller's "purchase price" or "sales price" of the taxable tangible personal |
29 | property is fifty percent (50%) or less of the total "purchase price" or "sales price" of the bundled |
30 | tangible personal property. Sellers may not use a combination of the "purchase price" and "sales |
31 | price" of the tangible personal property when making the fifty percent (50%) determination for a |
32 | transaction. |
33 | (d) "Certified automated system (CAS)" means software certified under the agreement to |
34 | calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit |
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1 | to the appropriate state, and maintain a record of the transaction. |
2 | (e) "Certified service provider (CSP)" means an agent certified under the agreement to |
3 | perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on |
4 | its own purchases. |
5 | (f) Clothing and related items. |
6 | (i) "Clothing" means all human wearing apparel suitable for general use. |
7 | (ii) "Clothing accessories or equipment" means incidental items worn on the person or in |
8 | conjunction with "clothing." "Clothing accessories or equipment" does not include "clothing," |
9 | "sport or recreational equipment," or "protective equipment." |
10 | (iii) "Protective equipment" means items for human wear and designed as protection of the |
11 | wearer against injury or disease or as protections against damage or injury of other persons or |
12 | property but not suitable for general use. "Protective equipment" does not include "clothing," |
13 | "clothing accessories or equipment," and "sport or recreational equipment." |
14 | (iv) "Sport or recreational equipment" means items designed for human use and worn in |
15 | conjunction with an athletic or recreational activity that are not suitable for general use. "Sport or |
16 | recreational equipment" does not include "clothing," "clothing accessories or equipment," and |
17 | "protective equipment." |
18 | (g) Computer and related items. |
19 | (i) "Computer" means an electronic device that accepts information in digital or similar |
20 | form and manipulates it for a result based on a sequence of instructions. |
21 | (ii) "Computer software" means a set of coded instructions designed to cause a "computer" |
22 | or automatic data processing equipment to perform a task. |
23 | (iii) "Delivered electronically" means delivered to the purchaser by means other than |
24 | tangible storage media. |
25 | (iv) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, |
26 | optical, electromagnetic, or similar capabilities. |
27 | (v) "Load and leave" means delivery to the purchaser by use of a tangible storage media |
28 | where the tangible storage media is not physically transferred to the purchaser. |
29 | (vi) "Prewritten computer software" means "computer software," including prewritten |
30 | upgrades, that is not designed and developed by the author or other creator to the specifications of |
31 | a specific purchaser. The combining of two (2) or more "prewritten computer software" programs |
32 | or prewritten portions thereof does not cause the combination to be other than "prewritten computer |
33 | software." "Prewritten computer software" includes software designed and developed by the author |
34 | or other creator to the specifications of a specific purchaser when it is sold to a person other than |
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1 | the specific purchaser. Where a person modifies or enhances "computer software" of which the |
2 | person is not the author or creator, the person shall be deemed to be the author or creator only of |
3 | such person's modifications or enhancements. "Prewritten computer software" or a prewritten |
4 | portion thereof that is modified or enhanced to any degree, where such modification or |
5 | enhancement is designed and developed to the specifications of a specific purchaser, remains |
6 | "prewritten computer software"; provided, however, that where there is a reasonable, separately |
7 | stated charge or an invoice or other statement of the price given to the purchaser for such |
8 | modification or enhancement, such modification or enhancement shall not constitute "prewritten |
9 | computer software." |
10 | (vii) "Vendor-hosted prewritten computer software" means prewritten computer software |
11 | that is accessed through the internet and/or a vendor-hosted server regardless of whether the access |
12 | is permanent or temporary and regardless of whether any downloading occurs. |
13 | (h) Drugs and related items. |
14 | (i) "Drug" means a compound, substance, or preparation, and any component of a |
15 | compound, substance, or preparation, other than "food and food ingredients," "dietary |
16 | supplements" or "alcoholic beverages": |
17 | (A) Recognized in the official United States Pharmacopoeia, official Homeopathic |
18 | Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them; |
19 | or |
20 | (B) Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; |
21 | or |
22 | (C) Intended to affect the structure or any function of the body. |
23 | "Drug" shall also include insulin and medical oxygen whether or not sold on prescription. |
24 | (ii) "Over-the-counter drug" means a drug that contains a label that identifies the product |
25 | as a drug as required by 21 C.F.R. § 201.66. The "over-the-counter drug" label includes: |
26 | (A) A "Drug Facts" panel; or |
27 | (B) A statement of the "active ingredient(s)" with a list of those ingredients contained in |
28 | the compound, substance, or preparation. |
29 | "Over-the-counter drug" shall not include "grooming and hygiene products." |
30 | (iii) "Grooming and hygiene products" are soaps and cleaning solutions, shampoo, |
31 | toothpaste, mouthwash, antiperspirants, and suntan lotions and screens, regardless of whether the |
32 | items meet the definition of "over-the-counter drugs." |
33 | (iv) "Prescription" means an order, formula, or recipe issued in any form of oral, written, |
34 | electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of |
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1 | the member state. |
2 | (i) "Delivery charges" means charges by the seller of personal property or services for |
3 | preparation and delivery to a location designated by the purchaser of personal property or services |
4 | including, but not limited to: transportation, shipping, postage, handling, crating, and packing. |
5 | "Delivery charges" shall not include the charges for delivery of "direct mail" if the charges |
6 | are separately stated on an invoice or similar billing document given to the purchaser. |
7 | (j) "Direct mail" means printed material delivered or distributed by United States mail or |
8 | other delivery service to a mass audience or to addressees on a mailing list provided by the |
9 | purchaser or at the direction of the purchaser when the cost of the items are not billed directly to |
10 | the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by |
11 | the purchaser to the direct mail seller for inclusion in the package containing the printed material. |
12 | "Direct mail" does not include multiple items of printed material delivered to a single address. |
13 | (k) "Durable medical equipment" means equipment including repair and replacement parts |
14 | for same which: |
15 | (i) Can withstand repeated use; and |
16 | (ii) Is primarily and customarily used to serve a medical purpose; and |
17 | (iii) Generally is not useful to a person in the absence of illness or injury; and |
18 | (iv) Is not worn in or on the body. |
19 | Durable medical equipment does not include mobility enhancing equipment. |
20 | (l) Food and related items. |
21 | (i) "Food and food ingredients" means substances, whether in liquid, concentrated, solid, |
22 | frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are |
23 | consumed for their taste or nutritional value. "Food and food ingredients" does not include |
24 | "alcoholic beverages," "tobacco," "candy," "dietary supplements," and "soft drinks." |
25 | (ii) "Prepared food" means: |
26 | (A) Food sold in a heated state or heated by the seller; |
27 | (B) Two (2) or more food ingredients mixed or combined by the seller for sale as a single |
28 | item; or |
29 | (C) Food sold with eating utensils provided by the seller, including: plates, knives, forks, |
30 | spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used |
31 | to transport the food. |
32 | "Prepared food" in (B) does not include food that is only cut, repackaged, or pasteurized |
33 | by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring |
34 | cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part |
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1 | 401.11 of its Food Code so as to prevent food borne illnesses. |
2 | (iii) "Candy" means a preparation of sugar, honey, or other natural or artificial sweeteners |
3 | in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, |
4 | drops, or pieces. "Candy" shall not include any preparation containing flour and shall require no |
5 | refrigeration. |
6 | (iv) "Soft drinks" means non-alcoholic beverages that contain natural or artificial |
7 | sweeteners. "Soft drinks" do not include beverages that contain milk or milk products, soy, rice, |
8 | or similar milk substitutes, or greater than fifty percent (50%) of vegetable or fruit juice by volume. |
9 | (v) "Dietary supplement" means any product, other than "tobacco," intended to supplement |
10 | the diet that: |
11 | (A) Contains one or more of the following dietary ingredients: |
12 | 1. A vitamin; |
13 | 2. A mineral; |
14 | 3. An herb or other botanical; |
15 | 4. An amino acid; |
16 | 5. A dietary substance for use by humans to supplement the diet by increasing the total |
17 | dietary intake; or |
18 | 6. A concentrate, metabolite, constituent, extract, or combination of any ingredient |
19 | described above; and |
20 | (B) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or |
21 | if not intended for ingestion in such a form, is not represented as conventional food and is not |
22 | represented for use as a sole item of a meal or of the diet; and |
23 | (C) Is required to be labeled as a dietary supplement, identifiable by the "supplemental |
24 | facts" box found on the label and as required pursuant to 21 C.F.R. § 101.36. |
25 | (m) "Food sold through vending machines" means food dispensed from a machine or other |
26 | mechanical device that accepts payment. |
27 | (n) "Hotel" means every building or other structure kept, used, maintained, advertised as, |
28 | or held out to the public to be a place where living quarters are supplied for pay to transient or |
29 | permanent guests and tenants and includes a motel. |
30 | (i) "Living quarters" means sleeping rooms, sleeping or housekeeping accommodations, or |
31 | any other room or accommodation in any part of the hotel, rooming house, or tourist camp that is |
32 | available for or rented out for hire in the lodging of guests. |
33 | (ii) "Rooming house" means every house, boat, vehicle, motor court, or other structure |
34 | kept, used, maintained, advertised, or held out to the public to be a place where living quarters are |
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1 | supplied for pay to transient or permanent guests or tenants, whether in one or adjoining buildings. |
2 | (iii) "Tourist camp" means a place where tents or tent houses, or camp cottages, or cabins |
3 | or other structures are located and offered to the public or any segment thereof for human |
4 | habitation. |
5 | (o) "Lease or rental" means any transfer of possession or control of tangible personal |
6 | property for a fixed or indeterminate term for consideration. A lease or rental may include future |
7 | options to purchase or extend. Lease or rental does not include: |
8 | (i) A transfer of possession or control of property under a security agreement or deferred |
9 | payment plan that requires the transfer of title upon completion of the required payments; |
10 | (ii) A transfer of possession or control of property under an agreement that requires the |
11 | transfer of title upon completion of required payments and payment of an option price does not |
12 | exceed the greater of one hundred dollars ($100) or one percent of the total required payments; or |
13 | (iii) Providing tangible personal property along with an operator for a fixed or |
14 | indeterminate period of time. A condition of this exclusion is that the operator is necessary for the |
15 | equipment to perform as designed. For the purpose of this subsection, an operator must do more |
16 | than maintain, inspect, or set-up the tangible personal property. |
17 | (iv) Lease or rental does include agreements covering motor vehicles and trailers where the |
18 | amount of consideration may be increased or decreased by reference to the amount realized upon |
19 | sale or disposition of the property as defined in 26 U.S.C. § 7701(h)(1). |
20 | (v) This definition shall be used for sales and use tax purposes regardless if a transaction |
21 | is characterized as a lease or rental under generally accepted accounting principles, the Internal |
22 | Revenue Code, the Uniform Commercial Code, or other provisions of federal, state, or local law. |
23 | (vi) This definition will be applied only prospectively from the date of adoption and will |
24 | have no retroactive impact on existing leases or rentals. This definition shall neither impact any |
25 | existing sale-leaseback exemption or exclusions that a state may have, nor preclude a state from |
26 | adopting a sale-leaseback exemption or exclusion after the effective date of the agreement. |
27 | (p) "Mobility enhancing equipment" means equipment, including repair and replacement |
28 | parts to same, that: |
29 | (i) Is primarily and customarily used to provide or increase the ability to move from one |
30 | place to another and that is appropriate for use either in a home or a motor vehicle; and |
31 | (ii) Is not generally used by persons with normal mobility; and |
32 | (iii) Does not include any motor vehicle or equipment on a motor vehicle normally |
33 | provided by a motor vehicle manufacturer. |
34 | Mobility enhancing equipment does not include durable medical equipment. |
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1 | (q) "Model 1 Seller" means a seller that has selected a CSP as its agent to perform all the |
2 | seller's sales and use tax functions, other than the seller's obligation to remit tax on its own |
3 | purchases. |
4 | (r) "Model 2 Seller" means a seller that has selected a CAS to perform part of its sales and |
5 | use tax functions, but retains responsibility for remitting the tax. |
6 | (s) "Model 3 Seller" means a seller that has sales in at least five member states, has total |
7 | annual sales revenue of at least five hundred million dollars ($500,000,000), has a proprietary |
8 | system that calculates the amount of tax due each jurisdiction, and has entered into a performance |
9 | agreement with the member states that establishes a tax performance standard for the seller. As |
10 | used in this definition, a seller includes an affiliated group of sellers using the same proprietary |
11 | system. |
12 | (t) "Prosthetic device" means a replacement, corrective, or supportive device including |
13 | repair and replacement parts for same worn on or in the body to: |
14 | (i) Artificially replace a missing portion of the body; |
15 | (ii) Prevent or correct physical deformity or malfunction; or |
16 | (iii) Support a weak or deformed portion of the body. |
17 | (u) "Purchaser" means a person to whom a sale of personal property is made or to whom a |
18 | service is furnished. |
19 | (v) "Purchase price" applies to the measure subject to use tax and has the same meaning as |
20 | sales price. |
21 | (w) "Seller" means a person making sales, leases, or rentals of personal property or |
22 | services. |
23 | (x) Specified digital products. |
24 | (i) "Specified digital products" means electronically transferred: |
25 | (A) "Digital audio-visual works" which means a series of related images which, when |
26 | shown in succession, impart an impression of motion, together with accompanying sounds, if any; |
27 | (B) "Digital audio works" which means works that result from the fixation of a series of |
28 | musical, spoken, or other sounds, including ringtones, and/or; |
29 | (C) "Digital books" which means works that are generally recognized in the ordinary and |
30 | usual sense as "books." |
31 | (ii) For purposes of the definition of "digital audio works," "ringtones" means digitized |
32 | sound files that are downloaded onto a device and that may be used to alert the customer with |
33 | respect to a communication. |
34 | (iii) For purposes of the definitions of "specified digital products," "transferred |
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1 | electronically" means obtained by the purchaser by means other than tangible storage media. |
2 | (iv) For the purposes of "specified digital products," "end user" includes any person other |
3 | than a person who receives by contract a product "transferred electronically" for further broadcast, |
4 | rebroadcast, transmission, retransmission, licensing, relicensing, distribution, redistribution or |
5 | exhibition of the product, in whole or in part, to another person or persons. A person that purchases |
6 | products "transferred electronically" or the code for "specified digital products" for the purpose of |
7 | giving away such products or code shall not be considered to have engaged in the distribution or |
8 | redistribution of such products or code and shall be treated as an end user. |
9 | (v) For the purposes of "specified digital products," "permanent" means perpetual or for an |
10 | indefinite or unspecified length of time. |
11 | (y) "State" means any state of the United States and the District of Columbia. |
12 | (z) "Telecommunications" tax base/exemption terms. |
13 | (i) Telecommunication terms shall be defined as follows: |
14 | (A) "Ancillary services" means services that are associated with or incidental to the |
15 | provision of "telecommunications services," including, but not limited to, "detailed |
16 | telecommunications billing," "directory assistance," "vertical service," and "voice mail services." |
17 | (B) "Conference bridging service" means an "ancillary service" that links two (2) or more |
18 | participants of an audio or video conference call and may include the provision of a telephone |
19 | number. "Conference bridging service" does not include the "telecommunications services" used |
20 | to reach the conference bridge. |
21 | (C) "Detailed telecommunications billing service" means an "ancillary service" of |
22 | separately stating information pertaining to individual calls on a customer's billing statement. |
23 | (D) "Directory assistance" means an "ancillary service" of providing telephone number |
24 | information, and/or address information. |
25 | (E) "Vertical service" means an "ancillary service" that is offered in connection with one |
26 | or more "telecommunications services," which offers advanced calling features that allow |
27 | customers to identify callers and to manage multiple calls and call connections, including |
28 | "conference bridging services." |
29 | (F) "Voice mail service" means an "ancillary service" that enables the customer to store, |
30 | send, or receive recorded messages. "Voice mail service" does not include any "vertical services" |
31 | that the customer may be required to have in order to utilize the "voice mail service." |
32 | (G) "Telecommunications service" means the electronic transmission, conveyance, or |
33 | routing of voice, data, audio, video, or any other information or signals to a point, or between or |
34 | among points. The term "telecommunications service" includes such transmission, conveyance, or |
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1 | routing in which computer processing applications are used to act on the form, code, or protocol of |
2 | the content for purposes of transmission, conveyance, or routing without regard to whether such |
3 | service is referred to as voice over internet protocol services or is classified by the Federal |
4 | Communications Commission as enhanced or value added. "Telecommunications service" does |
5 | not include: |
6 | (1) Data processing and information services that allow data to be generated, acquired, |
7 | stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where |
8 | such purchaser's primary purpose for the underlying transaction is the processed data or |
9 | information; |
10 | (2) Installation or maintenance of wiring or equipment on a customer's premises; |
11 | (3) Tangible personal property; |
12 | (4) Advertising, including, but not limited to, directory advertising; |
13 | (5) Billing and collection services provided to third parties; |
14 | (6) Internet access service; |
15 | (7) Radio and television audio and video programming services, regardless of the medium, |
16 | including the furnishing of transmission, conveyance, and routing of such services by the |
17 | programming service provider. Radio and television audio and video programming services shall |
18 | include, but not be limited to, cable service as defined in 47 U.S.C. § 522(6) and audio and video |
19 | programming services delivered by commercial mobile radio service providers as defined in 47 |
20 | C.F.R. § 20.3; |
21 | (8) "Ancillary services"; or |
22 | (9) Digital products "delivered electronically," including, but not limited to: software, |
23 | music, video, reading materials, or ring tones. |
24 | (H) "800 service" means a "telecommunications service" that allows a caller to dial a toll- |
25 | free number without incurring a charge for the call. The service is typically marketed under the |
26 | name "800," "855," "866," "877," and "888" toll-free calling, and any subsequent numbers |
27 | designated by the Federal Communications Commission. |
28 | (I) "900 service" means an inbound toll "telecommunications service" purchased by a |
29 | subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded |
30 | announcement or live service. "900 service" does not include the charge for: collection services |
31 | provided by the seller of the "telecommunications services" to the subscriber, or service or product |
32 | sold by the subscriber to the subscriber's customer. The service is typically marketed under the |
33 | name "900 service," and any subsequent numbers designated by the Federal Communications |
34 | Commission. |
| LC004445/SUB A - Page 12 of 15 |
1 | (J) "Fixed wireless service" means a "telecommunications service" that provides radio |
2 | communication between fixed points. |
3 | (K) "Mobile wireless service" means a "telecommunications service" that is transmitted, |
4 | conveyed, or routed regardless of the technology used, whereby the origination and/or termination |
5 | points of the transmission, conveyance, or routing are not fixed, including, by way of example only, |
6 | "telecommunications services" that are provided by a commercial mobile radio service provider. |
7 | (L) "Paging service" means a "telecommunications service" that provides transmission of |
8 | coded radio signals for the purpose of activating specific pagers; such transmissions may include |
9 | messages and/or sounds. |
10 | (M) "Prepaid calling service" means the right to access exclusively "telecommunications |
11 | services," which must be paid for in advance and that enables the origination of calls using an |
12 | access number or authorization code, whether manually or electronically dialed, and that is sold in |
13 | predetermined units or dollars of which the number declines with use in a known amount. |
14 | (N) "Prepaid wireless calling service" means a "telecommunications service" that provides |
15 | the right to utilize "mobile wireless service," as well as other non-telecommunications services, |
16 | including the download of digital products "delivered electronically," content and "ancillary |
17 | services" which must be paid for in advance that is sold in predetermined units of dollars of which |
18 | the number declines with use in a known amount. |
19 | (O) "Private communications service" means a telecommunications service that entitles the |
20 | customer to exclusive or priority use of a communications channel or group of channels between |
21 | or among termination points, regardless of the manner in which such channel or channels are |
22 | connected, and includes switching capacity, extension lines, stations, and any other associated |
23 | services that are provided in connection with the use of such channel or channels. |
24 | (P) "Value-added non-voice data service" means a service that otherwise meets the |
25 | definition of "telecommunications services" in which computer processing applications are used to |
26 | act on the form, content, code, or protocol of the information or data primarily for a purpose other |
27 | than transmission, conveyance, or routing. |
28 | (ii) "Modifiers of Sales Tax Base/Exemption Terms" -- the following terms can be used to |
29 | further delineate the type of "telecommunications service" to be taxed or exempted. The terms |
30 | would be used with the broader terms and subcategories delineated above. |
31 | (A) "Coin-operated telephone service" means a "telecommunications service" paid for by |
32 | inserting money into a telephone accepting direct deposits of money to operate. |
33 | (B) "International" means a "telecommunications service" that originates or terminates in |
34 | the United States and terminates or originates outside the United States, respectively. United States |
| LC004445/SUB A - Page 13 of 15 |
1 | includes the District of Columbia or a U.S. territory or possession. |
2 | (C) "Interstate" means a "telecommunications service" that originates in one United States |
3 | state, or a United States territory or possession, and terminates in a different United States state or |
4 | a United States territory or possession. |
5 | (D) "Intrastate" means a "telecommunications service" that originates in one United States |
6 | state or a United States territory or possession, and terminates in the same United States state or a |
7 | United States territory or possession. |
8 | (E) "Pay telephone service" means a "telecommunications service" provided through any |
9 | pay telephone. |
10 | (F) "Residential telecommunications service" means a "telecommunications service" or |
11 | "ancillary services" provided to an individual for personal use at a residential address, including an |
12 | individual dwelling unit such as an apartment. In the case of institutions where individuals reside, |
13 | such as schools or nursing homes, "telecommunications service" is considered residential if it is |
14 | provided to and paid for by an individual resident rather than the institution. |
15 | The terms "ancillary services" and "telecommunications service" are defined as a broad |
16 | range of services. The terms "ancillary services" and "telecommunications service" are broader |
17 | than the sum of the subcategories. Definitions of subcategories of "ancillary services" and |
18 | "telecommunications service" can be used by a member state alone or in combination with other |
19 | subcategories to define a narrower tax base than the definitions of "ancillary services" and |
20 | "telecommunications service" would imply. The subcategories can also be used by a member state |
21 | to provide exemptions for certain subcategories of the more broadly defined terms. |
22 | A member state that specifically imposes tax on, or exempts from tax, local telephone or |
23 | local telecommunications service may define "local service" in any manner in accordance with § |
24 | 44-18.1-28, except as limited by other sections of this Agreement. |
25 | (aa) "Tobacco" means cigarettes, cigars, chewing, or pipe tobacco, or any other item that |
26 | contains tobacco. |
27 | SECTION 2. This act shall take effect upon passage. |
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LC004445/SUB A | |
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| LC004445/SUB A - Page 14 of 15 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND | |
COMPUTATION | |
*** | |
1 | This act would expand the definition of sales to include any license, lease, or rental of |
2 | prewritten or vendor-hosted computer software and specified digital products. This act would also |
3 | define "end-user" for specified digital products. |
4 | This act would take effect upon passage. |
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LC004445/SUB A | |
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| LC004445/SUB A - Page 15 of 15 |