2020 -- S 2802

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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 COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS --

UNFAIR SALES PRACTICES

     

     Introduced By: Senator Leonidas P. Raptakis

     Date Introduced: March 12, 2020

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 6-13-1 of the General Laws in Chapter 6-13 entitled "Unfair Sales

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Practices" is hereby amended to read as follows:

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     6-13-1. Definitions.

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     (a) "Cost to the retailer" means the invoice cost of the merchandise to the retailer within

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thirty (30) days prior to the date of the sale, or the replacement cost of the merchandise to the

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retailer within thirty (30) days prior to the date of the sale, in the quantity last purchased, whichever

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is lower; less all trade discounts except customary discounts for cash; to which shall be added:

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     (1) Freight charges not otherwise included in the cost of the merchandise;

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     (2) Cartage to the retail outlet if performed or paid for by the retailer, which cartage cost

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shall be deemed to be three-fourths of one percent (0.75%) two percent (2%) of the cost of the

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merchandise to the retailer, unless the retailer claims and proves a lower cartage cost; and

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     (3) A markup to cover in part the cost of doing business, which markup, in the absence of

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proof of a lesser cost, shall be six percent (6%) eight percent (8%) of the total cost at the retail

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outlet.

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     (b) "Cost to the wholesaler" means the invoice cost of the merchandise to the wholesaler

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within thirty (30) days prior to the date of the sale, or the replacement cost of the merchandise to

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the wholesaler within thirty (30) days prior to the date of the sale, in the quantity last purchased,

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whichever is lower; less all trade discounts except customary discounts for cash; to which shall be

 

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added:

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     (1) Freight charges not otherwise included in the cost of the merchandise;

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     (2) Cartage to the retail outlet if performed or paid for by the wholesaler, which cartage

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cost shall be deemed to be three-fourths of one percent (0.75%) two percent (2%) of the cost of the

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merchandise to the wholesaler, unless the wholesaler claims and proves a lower cartage cost; and

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     (3) A markup to cover in part the cost of doing business, which markup, in the absence of

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proof of a lesser cost, shall be two percent (2%) four percent (4%) of the total cost at the wholesale

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establishment; provided, for the sale of cigarettes there shall be a minimum markup of seven percent

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(7%).

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     (c) Where two (2) or more items are advertised; offered for sale; or sold at a combined

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price; the price of each item shall be determined in the manner stated in subsections (a) and (b).

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     (d) "Sell at retail", "sales at retail", and "retail sale" mean and include any transfer of title

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to tangible personal property for a valuable consideration made in the ordinary course of trade or

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in the usual prosecution of the seller's business to the purchaser for consumption or use other than

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resale or further processing or manufacturing. In this and in the preceding subsection the previous

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terms shall include any transfer of property where title is retained by the seller as security for the

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payment of the purchase price.

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     (e) "Retailer" means and includes every person, co-partnership, corporation, or association

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engaged in the business of making sales at retail within this state; provided, that, in the case of a

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retailer engaged in the business of making sales both at retail and at wholesale, the term shall be

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applied only to the retail portion of the business.

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     (f) "Wholesaler" means and includes every person, partnership, corporation, or association

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engaged in the business of making sales at wholesale within this state; provided, that, in the case

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of a wholesaler engaged in the business of making sales both at wholesale and at retail, the term

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shall be applied only to the wholesale portion of the business.

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     (g) Whenever any person, partnership, corporation, or association in the course of doing

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business performs the functions of both wholesaler and retailer without actually being engaged in

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the business of making sales at wholesale, the term "wholesaler" means and includes that function

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of the business of preparation for sale at the retail outlet, and the term "retailer" shall be applied

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only to the retail portion of the business.

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     (h) "Household" means and includes those who dwell under the same roof, house, or

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apartment.

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     (i) "Rebate" means a refund of a portion of the purchase price made to consumer to induce

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purchase of product.

 

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     SECTION 2. Chapter 44-20 of the General Laws entitled "Cigarette and Other Tobacco

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Products Tax" is hereby amended by adding thereto the following section:

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     44-20-12.7. Minimum pricing of cigarettes.

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     Notwithstanding any rule, regulation or state law to the contrary, a minimum markup of

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seven percent (7%) shall be added to the total cost of cigarettes sold by a retailer. The total cost

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shall include the invoice cost of the merchandise to the retailer plus the cigarette excise tax imposed

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by ยง 44-20-12 plus freight charges and cartage cost to the retail outlet if performed or paid for by

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the retailer. The minimum markup of seven percent (7%) shall not be deemed to be an unfair sales

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practice pursuant to chapter 13 of title 6. The tax administrator shall promulgate rules and

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regulations consistent with this section.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS --

UNFAIR SALES PRACTICES

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     This act would create a minimum markup of seven percent (7%) to the total cost of

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cigarettes sold by a retailer. This act would change the cost to the retailer for cartage from three-

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fourth of one percent (.75%) to two percent (2%) of the cost of merchandise and the markup to

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cover in part the cost of doing business from six percent (6%) to eight percent (8%). Additionally

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this act would change the cost to the wholesaler for cartage from three-fourth of one percent (.75%)

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to two percent (2%) of the cost of merchandise and the markup to cover in part the cost of doing

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business from two percent (2%) to four percent (4%).

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     This act would take effect upon passage.

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