ARTICLE 9 AS AMENDED

RELATING TO TAXATION

 

     SECTION 1. Section 44-61-1.1 of the General Laws in Chapter 44-61 entitled "Relating

To Depreciation of Assets and Net Operating Loss Deduction" is hereby amended to read as

follows:

 

     44-61-1.1. Expensing in lieu of depreciation of assets. (a) For purposes of expensing

of assets under chapters 11, 14 and 30 of this title, the expense deduction shall not exceed the sum

provided for twenty-five thousand dollars ($25,000) in any taxable year. The additional expensing

of assets for federal tax purposes under section 179 of the Internal Revenue Code, 26 U.S.C.

section 179 provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003 or any

subsequent federal enactment shall not be allowed for Rhode Island tax purposes. In the year that

those assets are placed in service expensing of assets and in all subsequent years, expenses and

depreciation for Rhode Island tax purposes shall be allowed in the same manner as is provided for

under section 179 of the internal revenue code 26 U.S.C. section 179 on those assets as it would

have been computed prior to the enactment of the Jobs and Growth Tax Relief Reconciliation Act

of 2003. Any remaining tax basis of the asset purchased shall be depreciated as provided for

under the internal revenue service code sections 167 and 168, excluding section 168(k).

      (b) The gain resulting from any subsequent disposition of these assets shall be computed

using a basis consistent with the Rhode Island expenses and depreciation allowed under

subsection (a) of this section.

     (c) There is hereby established a depreciation of assets transfer fund for the purpose of

reserving sufficient funding for the expensing of assets in accordance with subsection (a). The

general assembly may appropriate such amounts to the fund deemed necessary for said purpose.

 

     SECTION 2. Chapter 44-55 of the General Laws entitled "Tax Incentives for Employers"

is hereby amended by adding thereto the following section:

 

     44-55-8. Adding back the domestic production activities deduction. -- All

corporations doing business in the state of Rhode Island shall add back into their taxable income

any amount deducted under the federal "domestic production deduction" also known as section

199 of the federal Internal Revenue Code. State tax forms shall be changed if needed in order to

comply with this section.

 

     SECTION 3. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes -

Liability and Computation" is hereby amended by adding thereto the following sections:

 

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

tax by remote seller. -- As used in this article:

     (1) "Remote seller" means a person that makes remote sales in this state.

     (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.

     (c) 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 section 44-18-18, and

in accordance with the provisions of this article, chapters 44-18.1 and 44-19, and applicable

federal law.

 

     44-18-18. Sales tax imposed. -- A tax is imposed upon sales at retail in this state

including charges for rentals of living quarters in hotels as defined in section 42-63.1-2, rooming

houses, or tourist camps, at the rate of six percent (6%) of the gross receipts of the retailer from

the sales or rental charges; provided, that the tax imposed on charges for the rentals applies only

to the first period of not exceeding thirty (30) consecutive calendar days of each rental; provided,

further, that for the period commencing July 1, 1990, the tax rate is seven percent (7%). The tax is

paid to the tax administrator by the retailer at the time and in the manner provided. Excluded from

this tax are those living quarters in hotels, rooming houses, or tourist camps for which the

occupant has a written lease for the living quarters which lease covers a rental period of twelve

(12) months or more. In recognition of the work being performed by the Streamlined Sales and

Use Tax Governing Board, upon passage any federal law which authorizes states to require

requires remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the

first (1st) state fiscal quarter following the change, the rate imposed under section 44-18-18 shall

be reduced from seven percent (7%) to six and one-half percent (6.5%). The six and one-half

percent (6.5%) rate shall take effect on the date that the state requires remote sellers to collect and

remit sale and use taxes.

 

     44-18-18.1. Local meals and beverage tax. -- (a) There is hereby levied and imposed,

upon every purchaser of a meal and/or beverage, in addition to all other taxes and fees now

imposed by law, a local meals and beverage tax upon each and every meal and/or beverage sold

within the state of Rhode Island in or from an eating and/or drinking establishment, whether

prepared in the eating and/or drinking establishment or not and whether consumed at the premises

or not, at a rate of one percent of the gross receipts. The tax shall be paid to the tax administrator

by the retailer at the time and in the manner provided.

      (b) All sums received by the division of taxation under this section as taxes, penalties or

forfeitures, interest, costs of suit and fines shall be distributed at least quarterly, credited and paid

by the state treasurer to the city or town where the meals and beverages are delivered.

      (c) When used in this section, the following words have the following meanings:

      (1) "Beverage" means all nonalcoholic beverages, as well as alcoholic beverages, beer,

lager beer, ale, porter, wine, similar fermented malt or vinous liquor.

      (2) "Eating and/or drinking establishments" mean and include restaurants, bars, taverns,

lounges, cafeterias, lunch counters, drive-ins, roadside ice cream and refreshment stands, fish and

chip places, fried chicken places, pizzerias, food and drink concessions, or similar facilities in

amusement parks, bowling alleys, clubs, caterers, drive-in theatres, industrial plants, race tracks,

shore resorts or other locations, lunch carts, mobile canteens and other similar vehicles, and other

like places of business which furnish or provide facilities for immediate consumption of food at

tables, chairs or counters or from trays, plates, cups or other tableware or in parking facilities

provided primarily for the use of patrons in consuming products purchased at the location.

Ordinarily, eating establishments do not mean and include food stores and supermarkets. Eating

establishments do not mean "vending machines," a self-contained automatic device that dispenses

for sale foods, beverages, or confection products. Retailers selling prepared foods in bulk either in

customer-furnished containers or in the seller's containers, for example "Soup and Sauce"

establishments, are deemed to be selling prepared foods ordinarily for immediate consumption

and, as such, are considered eating establishments.

      (3) "Meal" means any prepared food or beverage offered or held out for sale by an eating

and/or drinking establishment for the purpose of being consumed by any person to satisfy the

appetite and which is ready for immediate consumption. All such food and beverage, unless

otherwise specifically exempted or excluded herein shall be included, whether intended to be

consumed on the seller's premises or elsewhere, whether designated as breakfast, lunch, snack,

dinner, supper or by some other name, and without regard to the manner, time or place of service.

      (d) This local meals and beverage tax shall be administered and collected by the division

of taxation and unless provided to the contrary in this chapter, all of the administration,

collection, and other provisions of chapters 18 and 19 of this article apply.

      In recognition of the work being performed by the Streamlined Sales and Use Tax

Governing Board, upon passage of any federal law which authorizes states to require requires

remote sellers to collect and remit sales and use taxes, effective the first (1st) day of the first (1st)

state fiscal quarter following the change, the rate imposed under section 44-18-18.1 shall be

increased from one percent (1%) to one and one-half percent (1.5%). The one and one-half

percent (1.5%) rate shall take effect on the date that the state requires remote sellers to collect and

remit sales and use taxes.

 

     44-18-20. Use tax imposed. -- (a) An excise tax is imposed on the storage, use, or other

consumption in this state of tangible personal property, prewritten computer software delivered

electronically or by load and leave or services as defined in section 44-18-7.3; including a motor

vehicle, a boat, an airplane, or a trailer, purchased from any retailer at the rate of six percent (6%)

of the sale price of the property.

      (b) An excise tax is imposed on the storage, use, or other consumption in this state of a

motor vehicle, a boat, an airplane, or a trailer purchased from other than a licensed motor vehicle

dealer or other than a retailer of boats, airplanes, or trailers respectively, at the rate of six percent

(6%) of the sale price of the motor vehicle, boat, airplane, or trailer.

      (c) The word "trailer" as used in this section and in section 44-18-21 means and includes

those defined in section 31-1-5(a) -- (e) and also includes boat trailers, camping trailers, house

trailers, and mobile homes.

      (d) Notwithstanding the provisions contained in this section and in section 44-18-21

relating to the imposition of a use tax and liability for this tax on certain casual sales, no tax is

payable in any casual sale:

      (1) When the transferee or purchaser is the spouse, mother, father, brother, sister, or

child of the transferor or seller;

      (2) When the transfer or sale is made in connection with the organization, reorganization,

dissolution, or partial liquidation of a business entity; provided:

      (i) The last taxable sale, transfer, or use of the article being transferred or sold was

subjected to a tax imposed by this chapter;

      (ii) The transferee is the business entity referred to or is a stockholder, owner, member,

or partner; and

      (iii) Any gain or loss to the transferor is not recognized for income tax purposes under

the provisions of the federal income tax law and treasury regulations and rulings issued

thereunder;

      (3) When the sale or transfer is of a trailer, other than a camping trailer, of the type

ordinarily used for residential purposes and commonly known as a house trailer or as a mobile

home; or

      (4) When the transferee or purchaser is exempt under the provisions of section 44-18-30

or other general law of this state or special act of the general assembly of this state.

      (e) The term "casual" means a sale made by a person other than a retailer; provided, that

in the case of a sale of a motor vehicle, the term means a sale made by a person other than a

licensed motor vehicle dealer or an auctioneer at an auction sale. In no case is the tax imposed

under the provisions of subsections (a) and (b) of this section on the storage, use, or other

consumption in this state of a used motor vehicle less than the product obtained by multiplying

the amount of the retail dollar value at the time of purchase of the motor vehicle by the applicable

tax rate; provided, that where the amount of the sale price exceeds the amount of the retail dollar

value, the tax is based on the sale price. The tax administrator shall use as his or her guide the

retail dollar value as shown in the current issue of any nationally recognized used vehicle guide

for appraisal purposes in this state. On request within thirty (30) days by the taxpayer after

payment of the tax, if the tax administrator determines that the retail dollar value as stated in this

subsection is inequitable or unreasonable, he or she shall, after affording the taxpayer reasonable

opportunity to be heard, re-determine the tax.

      (f) Every person making more than five (5) retail sales of tangible personal property or

prewritten computer software delivered electronically or by load and leave, or services as defined

in section 44-18-7.3 during any twelve (12) month period, including sales made in the capacity of

assignee for the benefit of creditors or receiver or trustee in bankruptcy, is considered a retailer

within the provisions of this chapter.

      (g) (1) "Casual sale" includes a sale of tangible personal property not held or used by a

seller in the course of activities for which the seller is required to hold a seller's permit or permits

or would be required to hold a seller's permit or permits if the activities were conducted in this

state; provided, that the sale is not one of a series of sales sufficient in number, scope, and

character (more than five (5) in any twelve (12) month period) to constitute an activity for which

the seller is required to hold a seller's permit or would be required to hold a seller's permit if the

activity were conducted in this state.

      (2) Casual sales also include sales made at bazaars, fairs, picnics, or similar events by

nonprofit organizations, which are organized for charitable, educational, civic, religious, social,

recreational, fraternal, or literary purposes during two (2) events not to exceed a total of six (6)

days duration each calendar year. Each event requires the issuance of a permit by the division of

taxation. Where sales are made at events by a vendor, which holds a sales tax permit and is not a

nonprofit organization, the sales are in the regular course of business and are not exempt as casual

sales.

      (h) The use tax imposed under this section for the period commencing July 1, 1990 is at

the rate of seven percent (7%). In recognition of the work being performed by the Streamlined

Sales and Use Tax Governing Board, upon passage of any federal law which authorizes states to

require requires remote sellers to collect and remit sales and use taxes, effective the first (1st) day

of the first (1st) state fiscal quarter following the change, the rate imposed under section 44-18-18

shall be reduced from seven percent (7.0%) to six and one-half percent (6.5%). The six and one-

half percent (6.5%) rate shall take effect on the date that the state requires remote sellers to collect

and remit sales and use taxes.

 

     44-18-30. Gross receipts exempt from sales and use taxes. -- There are exempted from

the taxes imposed by this chapter the following gross receipts:

      (1) Sales and uses beyond constitutional power of state. - From the sale and from the

storage, use, or other consumption in this state of tangible personal property the gross receipts

from the sale of which, or the storage, use, or other consumption of which, this state is prohibited

from taxing under the Constitution of the United States or under the constitution of this state.

      (2) Newspapers.

      (i) From the sale and from the storage, use, or other consumption in this state of any

newspaper.

      (ii) "Newspaper" means an unbound publication printed on newsprint, which contains

news, editorial comment, opinions, features, advertising matter, and other matters of public

interest.

      (iii) "Newspaper" does not include a magazine, handbill, circular, flyer, sales catalog, or

similar item unless the item is printed for and distributed as a part of a newspaper.

      (3) School meals. - From the sale and from the storage, use, or other consumption in this

state of meals served by public, private, or parochial schools, school districts, colleges,

universities, student organizations, and parent teacher associations to the students or teachers of a

school, college, or university whether the meals are served by the educational institutions or by a

food service or management entity under contract to the educational institutions.

      (4) Containers.

      (i) From the sale and from the storage, use, or other consumption in this state of:

      (A) Non-returnable containers, including boxes, paper bags, and wrapping materials

which are biodegradable and all bags and wrapping materials utilized in the medical and healing

arts, when sold without the contents to persons who place the contents in the container and sell

the contents with the container.

      (B) Containers when sold with the contents if the sale price of the contents is not

required to be included in the measure of the taxes imposed by this chapter.

      (C) Returnable containers when sold with the contents in connection with a retail sale of

the contents or when resold for refilling.

      (ii) As used in this subdivision, the term "returnable containers" means containers of a

kind customarily returned by the buyer of the contents for reuse. All other containers are "non-

returnable containers."

      (5) (i) Charitable, educational, and religious organizations. - From the sale to as in

defined in this section, and from the storage, use, and other consumption in this state or any other

state of the United States of America of tangible personal property by hospitals not operated for a

profit, "educational institutions" as defined in subdivision (18) not operated for a profit, churches,

orphanages, and other institutions or organizations operated exclusively for religious or charitable

purposes, interest free loan associations not operated for profit, nonprofit organized sporting

leagues and associations and bands for boys and girls under the age of nineteen (19) years, the

following vocational student organizations that are state chapters of national vocational students

organizations: Distributive Education Clubs of America, (DECA); Future Business Leaders of

America, phi beta lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers

of America/Home Economics Related Occupations (FHA/HERD); and Vocational Industrial

Clubs of America (VICA), organized nonprofit golden age and senior citizens clubs for men and

women, and parent teacher associations.

      (ii) In the case of contracts entered into with the federal government, its agencies or

instrumentalities, this state or any other state of the United States of America, its agencies, any

city, town, district, or other political subdivision of the states, hospitals not operated for profit,

educational institutions not operated for profit, churches, orphanages, and other institutions or

organizations operated exclusively for religious or charitable purposes, the contractor may

purchase such materials and supplies (materials and/or supplies are defined as those which are

essential to the project) that are to be utilized in the construction of the projects being performed

under the contracts without payment of the tax.

      (iii) The contractor shall not charge any sales or use tax to any exempt agency,

institution, or organization but shall in that instance provide his or her suppliers with certificates

in the form as determined by the division of taxation showing the reason for exemption; and the

contractor's records must substantiate the claim for exemption by showing the disposition of all

property so purchased. If any property is then used for a nonexempt purpose, the contractor must

pay the tax on the property used.

      (6) Gasoline. - From the sale and from the storage, use, or other consumption in this state

of: (i) gasoline and other products taxed under chapter 36 of title 31, and (ii) fuels used for the

propulsion of airplanes.

      (7) Purchase for manufacturing purposes.

      (i) From the sale and from the storage, use, or other consumption in this state of

computer software, tangible personal property, electricity, natural gas, artificial gas, steam,

refrigeration, and water, when the property or service is purchased for the purpose of being

manufactured into a finished product for resale, and becomes an ingredient, component, or

integral part of the manufactured, compounded, processed, assembled, or prepared product, or if

the property or service is consumed in the process of manufacturing for resale computer software,

tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration, or water.

      (ii) "Consumed" means destroyed, used up, or worn out to the degree or extent that the

property cannot be repaired, reconditioned, or rendered fit for further manufacturing use.

      (iii) "Consumed" includes mere obsolescence.

      (iv) "Manufacturing" means and includes manufacturing, compounding, processing,

assembling, preparing, or producing.

      (v) "Process of manufacturing" means and includes all production operations performed

in the producing or processing room, shop, or plant, insofar as the operations are a part of and

connected with the manufacturing for resale of tangible personal property, electricity, natural gas,

artificial gas, steam, refrigeration, or water and all production operations performed insofar as the

operations are a part of and connected with the manufacturing for resale of computer software.

      (vi) "Process of manufacturing" does not mean or include administration operations such

as general office operations, accounting, collection, sales promotion, nor does it mean or include

distribution operations which occur subsequent to production operations, such as handling,

storing, selling, and transporting the manufactured products, even though the administration and

distribution operations are performed by or in connection with a manufacturing business.

      (8) State and political subdivisions. - From the sale to, and from the storage, use, or other

consumption by, this state, any city, town, district, or other political subdivision of this state.

Every redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a

subdivision of the municipality where it is located.

      (9) Food and food ingredients. - From the sale and storage, use, or other consumption in

this state of food and food ingredients as defined in section 44-18-7.1(l).

      For the purposes of this exemption "food and food ingredients" shall not include candy,

soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending

machines or prepared food (as those terms are defined in section 44-18-7.1, unless the prepared

food is:

      (i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311,

except sub-sector 3118 (bakeries);

      (ii) Sold in an unheated state by weight or volume as a single item;

      (iii) Bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries,

donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and

      is not sold with utensils provided by the seller, including plates, knives, forks, spoons,

glasses, cups, napkins, or straws.

      (10) Medicines, drugs and durable medical equipment. - From the sale and from the

storage, use, or other consumption in this state, of;

      (i) "Drugs" as defined in section 44-18-7.1(h)(i), sold on prescriptions, medical oxygen,

and insulin whether or not sold on prescription. For purposes of this exemption drugs shall not

include over-the-counter drugs and grooming and hygiene products as defined in section 44-18-

7.1(h)(iii).

      (ii) Durable medical equipment as defined in section 44-18-7.1(k) for home use only,

including, but not limited to, syringe infusers, ambulatory drug delivery pumps, hospital beds,

convalescent chairs, and chair lifts. Supplies used in connection with syringe infusers and

ambulatory drug delivery pumps which are sold on prescription to individuals to be used by them

to dispense or administer prescription drugs, and related ancillary dressings and supplies used to

dispense or administer prescription drugs shall also be exempt from tax.

      (11) Prosthetic devices and mobility enhancing equipment. - From the sale and from the

storage, use, or other consumption in this state, of prosthetic devices as defined in section 44-18-

7.1(t), sold on prescription, including but not limited to, artificial limbs, dentures, spectacles and

eyeglasses, and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on

prescription and mobility enhancing equipment as defined in section 44-18-7.1(p) including

wheelchairs, crutches and canes.

      (12) Coffins, caskets, and burial garments. - From the sale and from the storage, use, or

other consumption in this state of coffins or caskets, and shrouds or other burial garments which

are ordinarily sold by a funeral director as part of the business of funeral directing.

      (13) Motor vehicles sold to nonresidents.

      (i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide

nonresident of this state who does not register the motor vehicle in this state, whether the sale or

delivery of the motor vehicle is made in this state or at the place of residence of the nonresident.

A motor vehicle sold to a bona fide nonresident whose state of residence does not allow a like

exemption to its nonresidents is not exempt from the tax imposed under section 44-18-20. In that

event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate

that would be imposed in his or her state of residence not to exceed the rate that would have been

imposed under section 44-18-20. Notwithstanding any other provisions of law, a licensed motor

vehicle dealer shall add and collect the tax required under this subdivision and remit the tax to the

tax administrator under the provisions of chapters 18 and 19 of this title. When a Rhode Island

licensed motor vehicle dealer is required to add and collect the sales and use tax on the sale of a

motor vehicle to a bona fide nonresident as provided in this section, the dealer in computing the

tax takes into consideration the law of the state of the nonresident as it relates to the trade-in of

motor vehicles.

      (ii) The tax administrator, in addition to the provisions of sections 44-19-27 and 44-19-

28, may require any licensed motor vehicle dealer to keep records of sales to bona fide

nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption

provided in this subdivision, including the affidavit of a licensed motor vehicle dealer that the

purchaser of the motor vehicle was the holder of, and had in his or her possession a valid out of

state motor vehicle registration or a valid out of state driver's license.

      (iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days

of the date of its sale to him or her is deemed to have purchased the motor vehicle for use,

storage, or other consumption in this state, and is subject to, and liable for the use tax imposed

under the provisions of section 44-18-20.

      (14) Sales in public buildings by blind people. - From the sale and from the storage, use,

or other consumption in all public buildings in this state of all products or wares by any person

licensed under section 40-9-11.1.

      (15) Air and water pollution control facilities. - From the sale, storage, use, or other

consumption in this state of tangible personal property or supplies acquired for incorporation into

or used and consumed in the operation of a facility, the primary purpose of which is to aid in the

control of the pollution or contamination of the waters or air of the state, as defined in chapter 12

of title 46 and chapter 25 of title 23, respectively, and which has been certified as approved for

that purpose by the director of environmental management. The director of environmental

management may certify to a portion of the tangible personal property or supplies acquired for

incorporation into those facilities or used and consumed in the operation of those facilities to the

extent that that portion has as its primary purpose the control of the pollution or contamination of

the waters or air of this state. As used in this subdivision, "facility" means any land, facility,

device, building, machinery, or equipment.

      (16) Camps. - From the rental charged for living quarters, or sleeping or housekeeping

accommodations at camps or retreat houses operated by religious, charitable, educational, or

other organizations and associations mentioned in subdivision (5), or by privately owned and

operated summer camps for children.

      (17) Certain institutions. - From the rental charged for living or sleeping quarters in an

institution licensed by the state for the hospitalization, custodial, or nursing care of human beings.

      (18) Educational institutions. - From the rental charged by any educational institution for

living quarters, or sleeping or housekeeping accommodations or other rooms or accommodations

to any student or teacher necessitated by attendance at an educational institution. "Educational

institution" as used in this section means an institution of learning not operated for profit which is

empowered to confer diplomas, educational, literary, or academic degrees, which has a regular

faculty, curriculum, and organized body of pupils or students in attendance throughout the usual

school year, which keeps and furnishes to students and others records required and accepted for

entrance to schools of secondary, collegiate, or graduate rank, no part of the net earnings of which

inures to the benefit of any individual.

      (19) Motor vehicle and adaptive equipment for persons with disabilities.

      (i) From the sale of: (A) special adaptations, (B) the component parts of the special

adaptations, or (C) a specially adapted motor vehicle; provided, that the owner furnishes to the

tax administrator an affidavit of a licensed physician to the effect that the specially adapted motor

vehicle is necessary to transport a family member with a disability or where the vehicle has been

specially adapted to meet the specific needs of the person with a disability. This exemption

applies to not more than one motor vehicle owned and registered for personal, noncommercial

use.

      (ii) For the purpose of this subsection the term "special adaptations" includes, but is not

limited to: wheelchair lifts; wheelchair carriers; wheelchair ramps; wheelchair securements; hand

controls; steering devices; extensions, relocations, and crossovers of operator controls; power-

assisted controls; raised tops or dropped floors; raised entry doors; or alternative signaling

devices to auditory signals.

      (iii) From the sale of: (a) special adaptations, (b) the component parts of the special

adaptations, for a "wheelchair accessible taxicab" as defined in section 39-14-1 and/or a

"wheelchair accessible public motor vehicle" as defined in section 39-14.1-1.

      (iv) For the purpose of this subdivision the exemption for a "specially adapted motor

vehicle" means a use tax credit not to exceed the amount of use tax that would otherwise be due

on the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the

special adaptations, including installation.

      (20) Heating fuels. - From the sale and from the storage, use, or other consumption in

this state of every type of fuel used in the heating of homes and residential premises.

      (21) Electricity and gas. - From the sale and from the storage, use, or other consumption

in this state of electricity and gas furnished for domestic use by occupants of residential premises.

      (22) Manufacturing machinery and equipment.

      (i) From the sale and from the storage, use, or other consumption in this state of tools,

dies, and molds, and machinery and equipment (including replacement parts), and related items to

the extent used in an industrial plant in connection with the actual manufacture, conversion, or

processing of tangible personal property, or to the extent used in connection with the actual

manufacture, conversion or processing of computer software as that term is utilized in industry

numbers 7371, 7372, and 7373 in the standard industrial classification manual prepared by the

technical committee on industrial classification, office of statistical standards, executive office of

the president, United States bureau of the budget, as revised from time to time, to be sold, or that

machinery and equipment used in the furnishing of power to an industrial manufacturing plant.

For the purposes of this subdivision, "industrial plant" means a factory at a fixed location

primarily engaged in the manufacture, conversion, or processing of tangible personal property to

be sold in the regular course of business;

      (ii) Machinery and equipment and related items are not deemed to be used in connection

with the actual manufacture, conversion, or processing of tangible personal property, or in

connection with the actual manufacture, conversion or processing of computer software as that

term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification

manual prepared by the technical committee on industrial classification, office of statistical

standards, executive office of the president, United States bureau of the budget, as revised from

time to time, to be sold to the extent the property is used in administration or distribution

operations;

      (iii) Machinery and equipment and related items used in connection with the actual

manufacture, conversion, or processing of any computer software or any tangible personal

property which is not to be sold and which would be exempt under subdivision (7) or this

subdivision if purchased from a vendor or machinery and equipment and related items used

during any manufacturing, converting or processing function is exempt under this subdivision

even if that operation, function, or purpose is not an integral or essential part of a continuous

production flow or manufacturing process;

      (iv) Where a portion of a group of portable or mobile machinery is used in connection

with the actual manufacture, conversion, or processing of computer software or tangible personal

property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under

this subdivision even though the machinery in that group is used interchangeably and not

otherwise identifiable as to use.

      (23) Trade-in value of motor vehicles. - From the sale and from the storage, use, or other

consumption in this state of so much of the purchase price paid for a new or used automobile as is

allocated for a trade-in allowance on the automobile of the buyer given in trade to the seller, or of

the proceeds applicable only to the automobile as are received from the manufacturer of

automobiles for the repurchase of the automobile whether the repurchase was voluntary or not

towards the purchase of a new or used automobile by the buyer. For the purpose of this

subdivision, the word "automobile" means a private passenger automobile not used for hire and

does not refer to any other type of motor vehicle.

      (24) Precious metal bullion.

      (i) From the sale and from the storage, use, or other consumption in this state of precious

metal bullion, substantially equivalent to a transaction in securities or commodities.

      (ii) For purposes of this subdivision, "precious metal bullion" means any elementary

precious metal which has been put through a process of smelting or refining, including, but not

limited to, gold, silver, platinum, rhodium, and chromium, and which is in a state or condition

that its value depends upon its content and not upon its form.

      (iii) The term does not include fabricated precious metal which has been processed or

manufactured for some one or more specific and customary industrial, professional, or artistic

uses.

      (25) Commercial vessels. - From sales made to a commercial ship, barge, or other vessel

of fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from

the repair, alteration, or conversion of the vessels, and from the sale of property purchased for the

use of the vessels including provisions, supplies, and material for the maintenance and/or repair

of the vessels.

      (26) Commercial fishing vessels. - From the sale and from the storage, use, or other

consumption in this state of vessels and other water craft which are in excess of five (5) net tons

and which are used exclusively for "commercial fishing", as defined in this subdivision, and from

the repair, alteration, or conversion of those vessels and other watercraft, and from the sale of

property purchased for the use of those vessels and other watercraft including provisions,

supplies, and material for the maintenance and/or repair of the vessels and other watercraft and

the boats nets, cables, tackle, and other fishing equipment appurtenant to or used in connection

with the commercial fishing of the vessels and other watercraft. "Commercial fishing" means the

taking or the attempting to take any fish, shellfish, crustacea, or bait species with the intent of

disposing of them for profit or by sale, barter, trade, or in commercial channels. The term does

not include subsistence fishing, i.e., the taking for personal use and not for sale or barter; or sport

fishing; but shall include vessels and other watercraft with a Rhode Island party and charter boat

license issued by the department of environmental management pursuant to section 20-2-27.1

which meet the following criteria: (i) the operator must have a current U.S.C.G. license to carry

passengers for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii)

U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a Rhode Island

boat registration to prove Rhode Island home port status; (iv) the vessel must be used as a

commercial passenger carrying fishing vessel to carry passengers for fishing. The vessel must be

able to demonstrate that at least fifty percent (50%) of its annual gross income derives from

charters or provides documentation of a minimum of one hundred (100) charter trips annually; (v)

the vessel must have a valid Rhode Island party and charter boat license. The tax administrator

shall implement the provisions of this subdivision by promulgating rules and regulations relating

thereto.

      (27) Clothing and footwear. - From the sales of articles of clothing, including footwear,

intended to be worn or carried on or about the human body for sales prior to October 1, 2012.

Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including

footwear, intended to be worn or carried on or about the human body up to two hundred and fifty

dollars ($250) of the sales price per item. For the purposes of this section, "clothing or footwear"

does not include clothing accessories or equipment or special clothing or footwear primarily

designed for athletic activity or protective use as these terms are defined in section 44-18-7.1(f).

In recognition of the work being performed by the Streamlined Sales and Use Tax Governing

Board, upon passage of any federal law which authorizes states to require requires remote sellers

to collect and remit sales and use taxes, effective the first (1st) day of the first (1st) state fiscal

quarter following the change, this unlimited exemption will apply as it did prior to October 1,

2012. The unlimited exemption on sales of clothing and footwear shall take effect on the date that

the state requires remote sellers to collect and remit sales and use taxes.

      (28) Water for residential use. - From the sale and from the storage, use, or other

consumption in this state of water furnished for domestic use by occupants of residential

premises.

      (29) Bibles. - [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see

Notes to Decisions.]From the sale and from the storage, use, or other consumption in the state of

any canonized scriptures of any tax-exempt nonprofit religious organization including, but not

limited to, the Old Testament and the New Testament versions.

      (30) Boats.

      (i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not

register the boat or vessel in this state, or document the boat or vessel with the United States

government at a home port within the state, whether the sale or delivery of the boat or vessel is

made in this state or elsewhere; provided, that the nonresident transports the boat within thirty

(30) days after delivery by the seller outside the state for use thereafter solely outside the state.

      (ii) The tax administrator, in addition to the provisions of sections 44-19-17 and 44-19-

28, may require the seller of the boat or vessel to keep records of the sales to bona fide

nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption

provided in this subdivision, including the affidavit of the seller that the buyer represented

himself or herself to be a bona fide nonresident of this state and of the buyer that he or she is a

nonresident of this state.

      (31) Youth activities equipment. - From the sale, storage, use, or other consumption in

this state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island

eleemosynary organizations, for the purposes of youth activities which the organization is formed

to sponsor and support; and by accredited elementary and secondary schools for the purposes of

the schools or of organized activities of the enrolled students.

      (32) Farm equipment. - From the sale and from the storage or use of machinery and

equipment used directly for commercial farming and agricultural production; including, but not

limited to, tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors,

balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment,

greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and

other farming equipment, including replacement parts, appurtenant to or used in connection with

commercial farming and tools and supplies used in the repair and maintenance of farming

equipment. "Commercial farming" means the keeping or boarding of five (5) or more horses or

the production within this state of agricultural products, including, but not limited to, field or

orchard crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or

production provides at least two thousand five hundred dollars ($2,500) in annual gross sales to

the operator, whether an individual, a group, a partnership, or a corporation for exemptions issued

prior to July 1, 2002; for exemptions issued or renewed after July 1, 2002, there shall be two (2)

levels. Level I shall be based on proof of annual gross sales from commercial farming of at least

twenty-five hundred dollars ($2,500) and shall be valid for purchases subject to the exemption

provided in this subdivision except for motor vehicles with an excise tax value of five thousand

dollars ($5,000) or greater; Level II shall be based on proof of annual gross sales from

commercial farming of at least ten thousand dollars ($10,000) or greater and shall be valid for

purchases subject to the exemption provided in this subdivision including motor vehicles with an

excise tax value of five thousand dollars ($5,000) or greater. For the initial issuance of the

exemptions, proof of the requisite amount of annual gross sales from commercial farming shall be

required for the prior year; for any renewal of an exemption granted in accordance with this

subdivision at either Level I or Level II, proof of gross annual sales from commercial farming at

the requisite amount shall be required for each of the prior two (2) years. Certificates of

exemption issued or renewed after July 1, 2002, shall clearly indicate the level of the exemption

and be valid for four (4) years after the date of issue. This exemption applies even if the same

equipment is used for ancillary uses, or is temporarily used for a non-farming or a non-

agricultural purpose, but shall not apply to motor vehicles acquired after July 1, 2002, unless the

vehicle is a farm vehicle as defined pursuant to section 31-1-8 and is eligible for registration

displaying farm plates as provided for in section 31-3-31.

      (33) Compressed air. - From the sale and from the storage, use, or other consumption in

the state of compressed air.

      (34) Flags. - From the sale and from the storage, consumption, or other use in this state

of United States, Rhode Island or POW-MIA flags.

      (35) Motor vehicle and adaptive equipment to certain veterans. - From the sale of a

motor vehicle and adaptive equipment to and for the use of a veteran with a service-connected

loss of or the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee,

whether service connected or not. The motor vehicle must be purchased by and especially

equipped for use by the qualifying veteran. Certificate of exemption or refunds of taxes paid is

granted under rules or regulations that the tax administrator may prescribe.

      (36) Textbooks. - From the sale and from the storage, use, or other consumption in this

state of textbooks by an "educational institution" as defined in subdivision (18) of this section and

as well as any educational institution within the purview of section 16-63-9(4) and used textbooks

by any purveyor.

      (37) Tangible personal property and supplies used in on-site hazardous waste recycling,

reuse, or treatment. - From the sale, storage, use, or other consumption in this state of tangible

personal property or supplies used or consumed in the operation of equipment, the exclusive

function of which is the recycling, reuse, or recovery of materials (other than precious metals, as

defined in subdivision (24)(ii) of this section) from the treatment of "hazardous wastes", as

defined in section 23-19.1-4, where the "hazardous wastes" are generated in Rhode Island solely

by the same taxpayer and where the personal property is located at, in, or adjacent to a generating

facility of the taxpayer in Rhode Island. The taxpayer shall procure an order from the director of

the department of environmental management certifying that the equipment and/or supplies as

used, or consumed, qualify for the exemption under this subdivision. If any information relating

to secret processes or methods of manufacture, production, or treatment is disclosed to the

department of environmental management only to procure an order, and is a "trade secret" as

defined in section 28-21-10(b), it is not open to public inspection or publicly disclosed unless

disclosure is required under chapter 21 of title 28 or chapter 24.4 of title 23.

      (38) Promotional and product literature of boat manufacturers. - From the sale and from

the storage, use, or other consumption of promotional and product literature of boat

manufacturers shipped to points outside of Rhode Island which either: (i) accompany the product

which is sold, (ii) are shipped in bulk to out of state dealers for use in the sale of the product, or

(iii) are mailed to customers at no charge.

      (39) Food items paid for by food stamps. - From the sale and from the storage, use, or

other consumption in this state of eligible food items payment for which is properly made to the

retailer in the form of U.S. government food stamps issued in accordance with the Food Stamp

Act of 1977, 7 U.S.C. section 2011 et seq.

      (40) Transportation charges. - From the sale or hiring of motor carriers as defined in

section 39-12-2(l) to haul goods, when the contract or hiring cost is charged by a motor freight

tariff filed with the Rhode Island public utilities commission on the number of miles driven or by

the number of hours spent on the job.

      (41) Trade-in value of boats. - From the sale and from the storage, use, or other

consumption in this state of so much of the purchase price paid for a new or used boat as is

allocated for a trade-in allowance on the boat of the buyer given in trade to the seller or of the

proceeds applicable only to the boat as are received from an insurance claim as a result of a stolen

or damaged boat, towards the purchase of a new or used boat by the buyer.

      (42) Equipment used for research and development. - From the sale and from the

storage, use, or other consumption of equipment to the extent used for research and development

purposes by a qualifying firm. For the purposes of this subdivision, "qualifying firm" means a

business for which the use of research and development equipment is an integral part of its

operation, and "equipment" means scientific equipment, computers, software, and related items.

      (43) Coins. - From the sale and from the other consumption in this state of coins having

numismatic or investment value.

      (44) Farm structure construction materials. - Lumber, hardware and other materials used

in the new construction of farm structures, including production facilities such as, but not limited

to, farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying

houses, fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing

rooms, machinery storage, seasonal farm worker housing, certified farm markets, bunker and

trench silos, feed storage sheds, and any other structures used in connection with commercial

farming.

      (45) Telecommunications carrier access service. - Carrier access service or

telecommunications service when purchased by a telecommunications company from another

telecommunications company to facilitate the provision of telecommunications service.

      (46) Boats or vessels brought into the state exclusively for winter storage, maintenance,

repair or sale. - Notwithstanding the provisions of sections 44-18-10, 44-18-11, 44-18-20, the tax

imposed by section 44-18-20 is not applicable for the period commencing on the first day of

October in any year to and including the 30th day of April next succeeding with respect to the use

of any boat or vessel within this state exclusively for purposes of: (i) delivery of the vessel to a

facility in this state for storage, including dry storage and storage in water by means of apparatus

preventing ice damage to the hull, maintenance, or repair; (ii) the actual process of storage,

maintenance, or repair of the boat or vessel; or (iii) storage for the purpose of selling the boat or

vessel.

      (47) Jewelry display product. - From the sale and from the storage, use, or other

consumption in this state of tangible personal property used to display any jewelry product;

provided, that title to the jewelry display product is transferred by the jewelry manufacturer or

seller and that the jewelry display product is shipped out of state for use solely outside the state

and is not returned to the jewelry manufacturer or seller.

      (48) Boats or vessels generally. - Notwithstanding the provisions of this chapter, the tax

imposed by sections 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the

storage, use, or other consumption in this state of any new or used boat. The exemption provided

for in this subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the

federal ten percent (10%) surcharge on luxury boats is repealed.

      (49) Banks and Regulated investment companies interstate toll-free calls. -

Notwithstanding the provisions of this chapter, the tax imposed by this chapter does not apply to

the furnishing of interstate and international, toll-free terminating telecommunication service that

is used directly and exclusively by or for the benefit of an eligible company as defined in this

subdivision; provided, that an eligible company employs on average during the calendar year no

less than five hundred (500) "full-time equivalent employees", as that term is defined in section

42-64.5-2. For purposes of this section, an "eligible company" means a "regulated investment

company" as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C. section 1 et

seq., or a corporation to the extent the service is provided, directly or indirectly, to or on behalf of

a regulated investment company, an employee benefit plan, a retirement plan or a pension plan or

a state chartered bank.

      (50) Mobile and manufactured homes generally. - From the sale and from the storage,

use, or other consumption in this state of mobile and/or manufactured homes as defined and

subject to taxation pursuant to the provisions of chapter 44 of title 31.

      (51) Manufacturing business reconstruction materials.

      (i) From the sale and from the storage, use or other consumption in this state of lumber,

hardware, and other building materials used in the reconstruction of a manufacturing business

facility which suffers a disaster, as defined in this subdivision, in this state. "Disaster" means any

occurrence, natural or otherwise, which results in the destruction of sixty percent (60%) or more

of an operating manufacturing business facility within this state. "Disaster" does not include any

damage resulting from the willful act of the owner of the manufacturing business facility.

      (ii) Manufacturing business facility includes, but is not limited to, the structures housing

the production and administrative facilities.

      (iii) In the event a manufacturer has more than one manufacturing site in this state, the

sixty percent (60%) provision applies to the damages suffered at that one site.

      (iv) To the extent that the costs of the reconstruction materials are reimbursed by

insurance, this exemption does not apply.

      (52) Tangible personal property and supplies used in the processing or preparation of

floral products and floral arrangements. - From the sale, storage, use, or other consumption in this

state of tangible personal property or supplies purchased by florists, garden centers, or other like

producers or vendors of flowers, plants, floral products, and natural and artificial floral

arrangements which are ultimately sold with flowers, plants, floral products, and natural and

artificial floral arrangements or are otherwise used in the decoration, fabrication, creation,

processing, or preparation of flowers, plants, floral products, or natural and artificial floral

arrangements, including descriptive labels, stickers, and cards affixed to the flower, plant, floral

product or arrangement, artificial flowers, spray materials, floral paint and tint, plant shine, flower

food, insecticide and fertilizers.

      (53) Horse food products. - From the sale and from the storage, use, or other

consumption in this state of horse food products purchased by a person engaged in the business of

the boarding of horses.

      (54) Non-motorized recreational vehicles sold to nonresidents.

      (i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to

a bona fide nonresident of this state who does not register the non-motorized recreational vehicle

in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this

state or at the place of residence of the nonresident; provided, that a non-motorized recreational

vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption

to its nonresidents is not exempt from the tax imposed under section 44-18-20; provided, further,

that in that event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal

to the rate that would be imposed in his or her state of residence not to exceed the rate that would

have been imposed under section 44-18-20. Notwithstanding any other provisions of law, a

licensed non-motorized recreational vehicle dealer shall add and collect the tax required under

this subdivision and remit the tax to the tax administrator under the provisions of chapters 18 and

19 of this title. Provided, that when a Rhode Island licensed non-motorized recreational vehicle

dealer is required to add and collect the sales and use tax on the sale of a non-motorized

recreational vehicle to a bona fide nonresident as provided in this section, the dealer in computing

the tax takes into consideration the law of the state of the nonresident as it relates to the trade-in

of motor vehicles.

      (ii) The tax administrator, in addition to the provisions of sections 44-19-27 and 44-19-

28, may require any licensed non-motorized recreational vehicle dealer to keep records of sales to

bona fide nonresidents as the tax administrator deems reasonably necessary to substantiate the

exemption provided in this subdivision, including the affidavit of a licensed non-motorized

recreational vehicle dealer that the purchaser of the non-motorized recreational vehicle was the

holder of, and had in his or her possession a valid out-of-state non-motorized recreational vehicle

registration or a valid out-of-state driver's license.

      (iii) Any nonresident who registers a non-motorized recreational vehicle in this state

within ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-

motorized recreational vehicle for use, storage, or other consumption in this state, and is subject

to, and liable for the use tax imposed under the provisions of section 44-18-20.

      (iv) "Non-motorized recreational vehicle" means any portable dwelling designed and

constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use

which is eligible to be registered for highway use, including, but not limited to, "pick-up coaches"

or "pick-up campers," "travel trailers," and "tent trailers" as those terms are defined in chapter 1

of title 31.

      (55) Sprinkler and fire alarm systems in existing buildings. - From the sale in this state of

sprinkler and fire alarm systems, emergency lighting and alarm systems, and from the sale of the

materials necessary and attendant to the installation of those systems, that are required in

buildings and occupancies existing therein in July 2003, in order to comply with any additional

requirements for such buildings arising directly from the enactment of the Comprehensive Fire

Safety Act of 2003, and that are not required by any other provision of law or ordinance or

regulation adopted pursuant to that Act. The exemption provided in this subdivision shall expire

on December 31, 2008.

      (56) Aircraft. - Notwithstanding the provisions of this chapter, the tax imposed by

sections 44-18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or

other consumption in this state of any new or used aircraft or aircraft parts.

      (57) Renewable energy products. - Notwithstanding any other provisions of Rhode

Island general laws the following products shall also be exempt from sales tax: solar photovoltaic

modules or panels, or any module or panel that generates electricity from light; solar thermal

collectors, including, but not limited to, those manufactured with flat glass plates, extruded

plastic, sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-

water and water-to-air type pumps; wind turbines; towers used to mount wind turbines if

specified by or sold by a wind turbine manufacturer; DC to AC inverters that interconnect with

utility power lines; manufactured mounting racks and ballast pans for solar collector, module or

panel installation. Not to include materials that could be fabricated into such racks; monitoring

and control equipment, if specified or supplied by a manufacturer of solar thermal, solar

photovoltaic, geothermal, or wind energy systems or if required by law or regulation for such

systems but not to include pumps, fans or plumbing or electrical fixtures unless shipped from the

manufacturer affixed to, or an integral part of, another item specified on this list; and solar storage

tanks that are part of a solar domestic hot water system or a solar space heating system. If the tank

comes with an external heat exchanger it shall also be tax exempt, but a standard hot water tank is

not exempt from state sales tax.

      (58) Returned property. - The amount charged for property returned by customers upon

rescission of the contract of sale when the entire amount exclusive of handling charges paid for

the property is refunded in either cash or credit, and where the property is returned within one

hundred twenty (120) days from the date of delivery.

      (59) Dietary Supplements. - From the sale and from the storage, use or other

consumption of dietary supplements as defined in section 44-18-7.1(l)(v), sold on prescriptions.

      (60) Blood. - From the sale and from the storage, use or other consumption of human

blood.

      (61) Agricultural products for human consumption. - From the sale and from the storage,

use or other consumption of livestock and poultry of the kinds of products of which ordinarily

constitute food for human consumption and of livestock of the kind the products of which

ordinarily constitute fibers for human use.

      (62) Diesel emission control technology. - From the sale and use of diesel retrofit

technology that is required by section 31-47.3-4 of the general laws.

      (63) Feed for certain animals used in commercial farming. - From the sale of feed for

animals as described in subsection 44-18-30(61).

     (64) Alcoholic beverages. - From the sale and storage, use, or other consumption in this

state by a Class A licensee of alcoholic beverages, as defined in section 44-18-7.1, excluding beer

and malt beverages from December 1, 2013 through March 31, 2015; provided, further,

notwithstanding section 6-13-1 or any other general or public law to the contrary, alcoholic

beverages, as defined in section 44-18-7.1, shall not be subject to minimum markup from

December 1, 2013 through March 31, 2015.

 

     SECTION 4. Section 23-17-38.1 of the General Laws in Chapter 23-17 entitled

"Licensing of Health Care Facilities" is hereby amended to read as follows:

 

     23-17-38.1. Hospitals Licensing fee. -- (a) There is imposed a hospital licensing fee at

the rate of five and forty-three hundredths percent (5.43%) upon the net patient services revenue

of every hospital for the hospital's first fiscal year ending on or after January 1, 2010. This

licensing fee shall be administered and collected by the tax administrator, division of taxation

within the department of administration, and all the administration, collection and other

provisions of chapters 50 and 51 of title 44 shall apply. Every hospital shall pay the licensing fee

to the tax administrator on or before July 16, 2012 and payments shall be made by electronic

transfer of monies to the general treasurer and deposited to the general fund in accordance with

44-50-11 [repealed]. Every hospital shall, on or before June 18, 2012, make a return to the tax

administrator containing the correct computation of net patient services revenue for the hospital

fiscal year ending September 30, 2010, and the licensing fee due upon that amount. All returns

shall be signed by the hospital's authorized representative, subject to the pains and penalties of

perjury.

     (b)(a) There is also imposed a hospital licensing fee at the rate of five and thirty-five

hundredths percent (5.35%) upon the net patient services revenue of every hospital for the

hospital's first fiscal year ending on or after January 1, 2011, except that the license fee for all

hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent

(37%). The discount for Washington County hospitals is subject to approval by the Secretary of

the US Department of Health and Human Services of a state plan amendment submitted by the

Executive Office of Health and Human Services for the purpose of pursuing a waiver of the

uniformity requirement for the hospital license fee. This licensing fee shall be administered and

collected by the tax administrator, division of taxation within the department of revenue, and all

the administration, collection and other provisions of 51 of title 44 shall apply. Every hospital

shall pay the licensing fee to the tax administrator on or before July 15, 2013 and payments shall

be made by electronic transfer of monies to the general treasurer and deposited to the general

fund. Every hospital shall, on or before June 17, 2013, make a return to the tax administrator

containing the correct computation of net patient services revenue for the hospital fiscal year

ending September 30, 2011, and the licensing fee due upon that amount. All returns shall be

signed by the hospital's authorized representative, subject to the pains and penalties of perjury.

     (b) There is also imposed a hospital licensing fee at the rate of five and two hundred

forty-six thousandths percent (5.246%) upon the net patient services revenue of every hospital for

the hospital's first fiscal year ending on or after January 1, 2012, except that the license fee for all

hospitals located in Washington County, Rhode Island shall be discounted by thirty-seven percent

(37%). The discount for Washington County hospitals is subject to approval by the Secretary of

the US Department of Health and Human Services of a state plan amendment submitted by the

Executive Office of Health and Human Services for the purpose of pursuing a waiver of the

uniformity requirement for the hospital license fee. This licensing fee shall be administered and

collected by the tax administrator, division of taxation within the department of revenue, and all

the administration, collection and other provisions of 51 of title 44 shall apply. Every hospital

shall pay the licensing fee to the tax administrator on or before July 14, 2014 and payments shall

be made by electronic transfer of monies to the general treasurer and deposited to the general

fund. Every hospital shall, on or before June 16, 2014, make a return to the tax administrator

containing the correct computation of net patient services revenue for the hospital fiscal year

ending September 30, 2012, and the licensing fee due upon that amount. All returns shall be

signed by the hospital's authorized representative, subject to the pains and penalties of perjury.

     (c) For purposes of this section the following words and phrases have the following

meanings:

     (1) "Hospital" means a person or governmental unit duly licensed in accordance with this

chapter to establish, maintain, and operate a hospital, except a hospital whose primary service and

primary bed inventory are psychiatric.

     (2) "Gross patient services revenue" means the gross revenue related to patient care

services.

     (3) "Net patient services revenue" means the charges related to patient care services less

(i) charges attributable to charity care, (ii) bad debt expenses, and (iii) contractual allowances.

     (d) The tax administrator shall make and promulgate any rules, regulations, and

procedures not inconsistent with state law and fiscal procedures that he or she deems necessary

for the proper administration of this section and to carry out the provisions, policy and purposes

of this section.

     (e) The licensing fee imposed by this section shall apply to hospitals as defined herein

which are duly licensed on July 1, 2012 2013, and shall be in addition to the inspection fee

imposed by 23-17-38 and to any licensing fees previously imposed in accordance with 23-17-

38.1.

 

     SECTION 5. Chapter 44-1 of the General Laws entitled "State Tax Officials" is hereby

amended by adding thereto the following section:

 

     44-1-35. Outside Collection Agencies. -- The tax administrator may retain by written

contract collection agencies licensed under Rhode Island law, or licensed under the laws of

another state or the District of Columbia, for the purpose of collecting from sources outside the

state of Rhode Island taxes, interest and/or penalties assessed by the tax administrator.

 

     SECTION 6. Title 44 of the General Laws entitled "Taxation" is hereby amended by

adding thereto the following chapter:

     CHAPTER 68

     TAX PREPARERS ACT OF 2013

 

     44-68-1. Short title. -- This chapter shall be known as the "Tax Preparers Act".

     44-68-2. Definitions. -- (a) "Tax return preparer" means an individual who prepares a

substantial portion of any return for compensation. Tax return preparers include individuals

required to register with the Internal Revenue Service as a tax return preparer and who have a

Preparer Tax Identification Number (PTIN). For the purpose of this chapter the following

individuals shall not be considered tax return preparers:

     (1) Volunteer tax return preparers; or

     (2) Employees of a tax return preparer and employees of a commercial tax return

preparation business who provide only clerical, administration or other similar services.

     (b) "Preparer Tax Identification Number" means the number issued by the Internal

Revenue Service (IRS) to paid preparers to use on all the returns they prepare.

     (c) "Return" shall mean any tax report, return, claim for refund or attachment to any

report, return and/or claim for return filed with the tax administrator pursuant to the tax laws of

this state.

 

     44-68-3. Duties and Responsibilities. -- (a) A tax return preparer who prepares any

return that is submitted to the tax administrator must comply with all state laws and all applicable

regulations promulgated by the tax administrator.

     (b) A tax return preparer must sign and include his/her Preparer Tax Identification

Number on all returns prepared and filed with the Division of Taxation.

 

     44-68-4. Civil Penalties. -- (a) Failure To Be Diligent in Determining Eligibility for or

Amount of Earned Income Credit. Upon a determination by the tax administrator that a tax return

preparer prepared a return(s) and failed to comply with due diligence requirements imposed by

regulations issued by the tax administrator with respect to determining eligibility for, or the

amount of, the credit allowable by section 44-30-2.6(c)(2)(N), the tax return preparer shall pay a

penalty of five hundred dollars ($500) for each such return and/or claim.

     (b) Failure To Be Diligent in Determining Eligibility for Property Tax Relief Credit.

Upon a determination by the tax administrator that a tax return preparer prepared a return(s) and

failed to comply with due diligence requirements imposed by regulations issued by the tax

administrator with respect to determining eligibility for, or the amount of, the property tax relief

credit allowable by section 44-33-1 et seq., the tax return preparer shall pay a penalty of five

hundred dollars ($500) for each such return.

     (c) Tax Return Preparer Civil Penalties. Upon a determination by the tax administrator

that a tax return preparer willfully prepared, assisted in preparing, or caused the preparation of a

return(s) filed with the division of taxation with intent to wrongfully obtain a property tax relief

credit or with the intent to evade or reduce a tax obligation, the tax return preparer shall be liable

for a penalty of one thousand dollars ($1,000), or five hundred ($500) for each return so filed

during any calendar year, whichever is greater.

     (d) The tax administrator may suspend or revoke the privilege of a tax return preparer to

prepare and/or file returns with the division of taxation upon a determination that the tax return

preparer has failed to comply with or violated any provision of this section, any regulations issued

by the tax administrator, or with any provision of any other laws relative to the preparation of tax

returns. Any tax return preparer receiving a notice of intent to suspend or revoke the privilege to

file tax returns with the division of taxation may request a hearing on the notice of intent to

suspend or revoke; provided that said request for a hearing must be made within thirty (30) days

of such notice to suspend or revoke. If, after hearing, the tax return preparer is aggrieved by a

decision of the tax administrator (or his or her designated hearing officer), the tax return preparer

may, within thirty (30) days after notice of the decision is sent to the tax return preparer by

certified or registered mail, directed to their last known address, petition the sixth division of the

district court pursuant to chapter 8 of title 8, setting forth the reasons why the decision is alleged

to be erroneous and praying for relief therefrom.

 

     44-68-5. Criminal Penalties. -- Any tax return preparer who has previously been

assessed a penalty by the tax administrator under section 44-68-4(c) who is found by a court of

competent jurisdiction to have thereafter willfully prepared, assisted in preparing, or caused a

preparation of another false tax return or claim for refund which was filed with the division of

taxation with the intent to wrongfully obtain a property relief credit or the intent to wrongfully

evade or reduce a tax obligation shall be guilty of a felony and, on conviction, shall be subject to

a fine not exceeding fifty-thousand dollars ($50,000) or imprisonment not exceeding five (5)

years or both.

 

     44-68-6. Regulations. -- The tax administrator shall promulgate rules and regulations in

order to implement the provisions of this chapter.

 

     44-68-7. Severability. -- If any provision of this chapter or the application of this chapter

to any tax return preparer is held invalid, the remainder of this chapter and the application of the

provisions to other tax return preparers or circumstances shall not be affected.

 

     SECTION 7. Section 28-21-16 of the General Laws entitled "Hazardous Substances

Right to Know Act - Funding" is hereby amended to read as follows:

 

     28-21-16. Funding -- Contracts for services -- Exemption for copiers -- Appeals. --

(a) The director of labor and training shall determine which employers are subject to the

provisions of this chapter. and shall assess and collect an annual assessment of forty-two dollars

($42.00) which shall be levied against all those employers, which result in the funding for the

implementation of this chapter. The employer shall be obligated to pay the assessment. No

employer shall be exempt from the provisions of this chapter unless and until a request for

exemption is filed and approval is granted; provided that public and private libraries shall be

exempted exempt from this requirement. The funds shall be deposited as general revenue.

     (b) The director of labor and training may contract with qualified agencies and/or parties

for technical services performed in conjunction with this chapter.

     (c) The director of labor and training shall exempt from this chapter all employers whose

contact with the designated substances is entirely limited to copier machine powders or liquids

where the exposure is incidental to the business operation.

     (d) Any employer who contests the determination of the director may appeal the

determination under the provisions set forth in sections 28-20-19 and 28-20-20.

 

     SECTION 8. Section 3-10-1 of the General Laws in Chapter 3-10 entitled "Taxation of

Beverages" is hereby amended to read as follows:

 

     3-10-1. Manufacturing tax rates -- Exemption of religious uses. -- (a) There shall be

assessed and levied by the tax administrator on all beverages manufactured, rectified, blended, or

reduced for sale in this state a tax of three dollars ($3.00) three dollars and thirty cents ($3.30) on

every thirty-one (31) gallons, and a tax at a like rate for any other quantity or fractional part. On

any beverage manufactured, rectified, blended, or reduced for sale in this state consisting in

whole or in part of wine, whiskey, rum, gin, brandy spirits, ethyl alcohol, or other strong liquors

(as distinguished from beer or other brewery products) the tax to be assessed and levied is as

follows:

      (1) Still wines (whether fortified or not), sixty cents ($.60) one dollar and forty cents

($1.40) per gallon;

      (2) Still wines (whether fortified or not) made entirely from fruit grown in this state,

thirty cents ($.30) per gallon;

      (3) Sparkling wines (whether fortified or not), seventy five cents ($.75) per gallon;

      (4) Whiskey, rum, gin, brandy spirits, cordials, and other beverages consisting in whole

or in part of alcohol which is the product of distillation, three dollars and seventy-five cents

($3.75) five dollars and forty cents ($5.40) per gallon, except that whiskey, rum, gin, brandy

spirits, cordials, and other beverages consisting in whole or in part of alcohol which is the product

of distillation but which contains alcohol measuring thirty (30) proof or less, one dollar and ten

cents ($1.10) per gallon;

      (5) Ethyl alcohol to be used for beverage purposes, seven dollars and fifty cents ($7.50)

per gallon; and

      (6) Ethyl alcohol to be used for nonbeverage purposes, eight cents ($.08) per gallon.

      (b) Sacramental wines are not subject to any tax if sold directly to a member of the

clergy for use by the purchaser, or his or her congregation for sacramental or other religious

purposes.

      (c) A brewer who brews beer in this state which is actively and directly owned,

managed, and operated by an authorized legal entity which has owned, managed, and operated a

brewery in this state for at least twelve (12) consecutive months, shall receive a tax exemption on

the first one hundred thousand (100,000) barrels of beer that it produces and distributes in this

state in any calendar year. A barrel of beer is thirty one (31) gallons.

 

     SECTION 9. Section 3-10-5 of the General Laws in Chapter 3-10 entitled "Taxation of

Beverages" is hereby amended to read as follows:

 

     3-10-5. Information supplemental to returns -- Audit of books. -- (a) The tax

administrator may at any time request further information from any person or from the officers

and employees of any corporation which he or she may deem necessary to verify, explain or

correct any return made in pursuance of the provisions of this chapter, and for the like purpose the

administrator or his or her authorized agent may examine the books of account of that person or

corporation during business hours.

      (b) Each Class A licensee authorized to sell intoxicating beverages at wholesale or retail

in this state shall file an annual report on or before February 1 with the division of taxation in the

form required by the tax administrator. Such report shall included, but not limited to, total sales of

alcoholic beverages, sales tax and excise tax collections on such sales for immediately preceding

calendar year. Annually, on or before May 1, the tax administrator shall prepare and submit to the

chairs of house and senate finance committees a report reflecting data from the annuals reports

submitted by said licensee to the division of taxation. The tax administrator's report shall compile

total sales of alcoholic beverages, sales tax and excise tax collections by county.

 

     SECTION 10. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video

Lottery Terminal" is hereby amended to read as follows:

 

     42-61.2-7. Division of revenue. [Effective June 30, 2011.] -- (a) Notwithstanding the

provisions of section 42-61-15, the allocation of net terminal income derived from video lottery

games is as follows:

      (1) For deposit in the general fund and to the state lottery division fund for

administrative purposes: Net terminal income not otherwise disbursed in accordance with

subdivisions (a)(2) -- (a)(6) herein;

      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009 and shall be made from general appropriations, provided however that $784,458 of the total

appropriation shall be distributed equally to each qualifying distressed community. For each of

the fiscal years ending June 30, 2011, June 30, 2012, and June 30, 2013 seven hundred eighty-

four thousand four hundred fifty-eight dollars ($784,458) of the total appropriation shall be

distributed equally to each qualifying distressed community.

      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

funding shall be determined by appropriation.

      (2) To the licensed video lottery retailer:

      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996);

      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996).

      (iii) Effective July 1, 2013, provided that the referendum measure authorized by Section

1 of Chapters 24 and 25 of the Public Laws of 2012 is approved statewide and in the City of

Newport and provided further that Newport Grand commences and continues to offer table

games, the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand

Master Contract shall increase by one and one half percentage (1.5%) points. Effective July 1,

2013 the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand

Master Contract shall increase by two and one quarter percent (2.25%) points. The increase

herein shall sunset and expire on June 30, 2015 and the rate in effect as of June 30, 2013 shall be

reinstated.

      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

terminal income of the provider's terminals; in addition thereto, technology providers who

provide premium or licensed proprietary content or those games that have unique characteristics

such as 3D graphics, unique math/game play features or merchandising elements to video lottery

terminals may receive incremental compensation, either in the form of a daily fee or as an

increased percentage, if all of the following criteria are met:

      (A) A licensed video lottery retailer has requested the placement of premium or licensed

proprietary content at its licensed video lottery facility;

      (B) The division of lottery has determined in its sole discretion that the request is likely

to increase net terminal income or is otherwise important to preserve or enhance the

competiveness of the licensed video lottery retailer;

      (C) After approval of the request by the division of lottery, the total number of premium

or licensed propriety content video lottery terminals does not exceed ten percent (10%) of the

total number of video lottery terminals authorized at the respective licensed video lottery retailer;

and

      (D) All incremental costs are shared between the division and the respective licensed

video lottery retailer based upon their proportionate allocation of net terminal income. The

division of lottery is hereby authorized to amend agreements with the licensed video lottery

retailers, or the technology providers, as applicable, to effect the intent herein.

      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

proportionately from the payments to technology providers the sum of six hundred twenty-eight

thousand seven hundred thirty-seven dollars ($628,737);

      (4) (A) To the city of Newport one and one hundredth percent (1.01%) of net terminal

income of authorized machines at Newport Grand, except that:

      (i) Effective November 9, 2009 until June 30, 2013, the allocation shall be one and two

tenths percent (1.2%) of net terminal income of authorized machines at Newport Grand for each

week the facility operates video lottery games on a twenty-four (24) hour basis for all eligible

hours authorized, and

      (ii) Effective July 1, 2013, provided that the referendum measure authorized by Section 1

of Chapters 24 and 25 of the Public Laws of 2012 is approved statewide and in the City of

Newport, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal

income of authorized video lottery terminals at Newport Grand; and

      (B) To the town of Lincoln one and twenty-six hundredths percent (1.26%) of net

terminal income of authorized machines at Twin River except that,

      (i) Effective November 9, 2009 until June 30, 2013, the allocation shall be one and forty-

five hundredths percent (1.45%) of net terminal income of authorized machines at Twin River for

each week video lottery games are offered on a twenty-four (24) hour basis for all eligible hours

authorized, and

      (ii) Effective July 1, 2013, provided that the referendum measure authorized by Article

25, Chapter 151, Section 4 of the Public Laws of 2011 is approved statewide and in the Town of

Lincoln, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal

income of authorized video lottery terminals at Twin River; and

      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement, elderly housing, adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

debts; and

      (6) Unclaimed prizes and credits shall remit to the general fund of the state; and

      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(6) shall

be made on an estimated monthly basis. Payment shall be made on the tenth day following the

close of the month except for the last month when payment shall be on the last business day.

      (b) Notwithstanding the above, the amounts payable by the Division to UTGR related to

the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

      (c) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the UTGR Master Contract.

      (d) Notwithstanding the above, the amounts payable by the Division to Newport Grand

related to the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

      (e) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the Newport Grand Master Contract.

      (f) Notwithstanding the provisions of section 42-61-15, the allocation of Net Table Game

Revenue derived from Table Games at Twin River is as follows:

      (1) For deposit into the state lottery fund for administrative purposes and then the

balance remaining into the general fund:

      (i) Sixteen percent (16%) of Net Table Game Revenue, except as provided in subsection

(f)(1)(ii);

      (ii) An additional two percent (2%) of Net Table Game Revenue generated at Twin

River shall be allocated starting from the commencement of Table Game activities by such Table

Game Retailer, and ending, with respect to such Table Game Retailer, on the first date that such

Table Game Retailer's net terminal income for a full State fiscal year is less than such Table

Game Retailer's net terminal income for the prior State fiscal year, at which point this additional

allocation to the State shall no longer apply to such Table Game Retailer.

      (2) To UTGR, Net Table Game Revenue not otherwise disbursed pursuant to above

subsection (f)(1); provided, however, on the first date that such Table Game Retailer's net

terminal income for a full State fiscal year is less than such Table Game Retailer's net terminal

income for the prior State fiscal year, as set forth in subsection (f)(1)(ii) above, one percent (1%)

of this Net Table Game Revenue shall be allocated to the town of Lincoln for four (4) consecutive

State fiscal years.

      (g) Notwithstanding the provisions of section 42-61-15, the allocation of Net Table

Game Revenue derived from Table Games at Newport Grand is as follows:

      (1) For deposit into the state lottery fund for administrative purposes and then the

balance remaining into the general fund: eighteen percent (18%) of Net Table Game Revenue.

      (2) To Newport Grand LLC, Net Table Game Revenue not otherwise disbursed pursuant

to above subsection (g)(1) provided, however, on the first date that such Table Game Retailer's

net terminal income for a full State fiscal year is less than such Table Game Retailer's net

terminal income for the prior State fiscal year, one percent (1%) of this Net Table Game Revenue

shall be allocated to the city of Newport for four (4) consecutive State fiscal years.

 

     SECTION 11. Section 44-23-5 of the General Laws in Chapter 44-23 entitled "Estate and

Transfer Taxes - Enforcement and Collection" is hereby amended to read as follows:

 

     44-23-5. Appraisal of estate. (a) If any statement filed in accordance with the

provisions of this chapter is considered to be an erroneous or incomplete statement of the

property, real, tangible personal, intangible personal, or of any part of the property, of the

decedent, the tax administrator shall give notice to the executor, administrator, heir-at-law,

beneficiary, or trustee filing the statement, to appear before the tax administrator for the purpose

of examination of and concerning the statement, and concerning all matters appertaining to the

estate and the value of the estate of the decedent; and if the executor, administrator, heir-at-law,

beneficiary, or trustee fails to appear after due notice, or if after appearance and examination of

the executor, administrator, heir-at-law, beneficiary, or trustee the tax administrator still considers

the statement to be an erroneous or incomplete statement, or if the executor, administrator, heir-

at-law, beneficiary, or trustee refuses or neglects to answer the questions propounded in reference

to the statement, the tax administrator may appraise the estate. The tax administrator shall give

notice by mail to the executor, administrator, heir-at-law, beneficiary, or trustee and to all persons

known to have a claim or interest in the estate or property to be appraised, of the time and place

of the appraisal, and the tax administrator or his or her authorized agent shall at that time and

place appraise the estate or property at its full and fair cash value as prescribed in this section; and

for that purpose the tax administrator is authorized to issue subpoenas and to compel the

attendance of witnesses and to take the evidence of the witnesses under oath if necessary,

concerning the estate or property and the value of the estate, and the witnesses shall receive the

same fees as those now paid to witnesses subpoenaed to attend the superior court. From the

appraisal and other proof relating to the estate or property, the tax administrator determines the

full and fair cash value of the estate or property upon which all taxes imposed by chapter 22 of

this title are computed and the amount of taxes to which it is liable. If no appraisal is made as

provided in this section, the tax administrator may determine the value of the property upon

which all the taxes are computed and the amount of taxes to which it is liable.

     (b) Notwithstanding the provisions of subsection 44-23-5(a), all farmland, as such term is

defined in section 44-27-2, included as part of an estate for purposes of this section and utilized

by the executor, administrator, heir-at-law, beneficiary or trustee as farmland, shall be appraised

at its use value according to applicable federal and state law and not at its full and fair cash value.

 

     SECTION 12. Section 8-18-2 of the General Laws in Chapter 8-18 entitled "State and

Municipal Court Compact" is hereby amended to read as follows:

 

     8-18-2. Universal summons. -- All state agencies and municipalities which have law

enforcement powers shall be issued and authorized a form for summons and complaint to be used

for all violations specified in chapters 27, and 41.1 and 41.2 of title 31 and no other summons

shall be substituted except as provided by section 31-12-12. All fines, assessments, fees, and

other financial charge or any other responsibility not changed by the following shall be deemed

enforceable even when the summons is issued by a municipality and adjudicated by a municipal

court, or issued by state agencies or a municipality without a court and adjudicated by the traffic

tribunal. All summonses once issued must be recorded by the traffic tribunal prior to a hearing,

arraignment, or trial. If the summons is answered by payment without personal appearance

pursuant to section 31-41.1-2, it shall be recorded by the traffic tribunal upon return from the

financial institution.

 

     SECTION 13. Sections 31-41.2-4 and 31-41.2-5 of the General Laws in Chapter 31-41.2

entitled "Automated Traffic Violation Monitoring Systems" are hereby amended to read as

follows:

 

     31-41.2-4. Procedure -- Notice. -- (a) Except as expressly provided in this chapter, all

prosecutions based on evidence produced by an automated traffic violation detection system shall

follow the procedures established in chapter 41.1 of this title, chapter 8-18 of these general laws,

except the provision providing for payments to the state in sections 8-18-4 and 8-18-6, and the

rules promulgated by the chief magistrate of the traffic tribunal for the hearing of civil traffic

violations. Citations A summons may be issued by an officer solely based on evidence obtained

by use of an automated traffic violation detection system. All citations summons issued based on

evidence obtained from an automated traffic violation detection system shall be issued within

fourteen (14) days of the violation.

     (b) Notwithstanding any rule, regulation, or other provision of the general or public laws

to the contrary, no city or town shall be required to make payments to the state in implementing

any provision of this chapter until July 1, 2013.

     (b)(c) It shall be sufficient to commence a prosecution based on evidence obtained from

an automated traffic violation detection system that a copy of the citation summons and

supporting documentation be mailed to the address of the registered owner kept on file by the

registry of motor vehicles pursuant to section 31-3-34 of these general laws. For purposes of this

section, the date of issuance shall be the date of mailing.

      (c)(d) The officer issuing the citation summons shall certify under penalties of perjury

that the evidence obtained from the automated traffic violation detection system was sufficient to

demonstrate a violation of the motor vehicle code. Such certification shall be sufficient in all

prosecutions pursuant to this chapter to justify the entry of a default judgment upon sufficient

proof of actual notice in all cases where the citation summons is not answered within the time

period permitted.

      (d)(e) The citation summons shall contain all the information provided for on the

uniform summons as referred to in section 31-41.1-1 of the general laws and the rules of

procedure promulgated by the chief magistrate of the traffic tribunal subject to the approval of the

supreme court pursuant to section 8-6-2.

      (e)(f) In addition to the information in the uniform summons, the following information

shall be attached to the citation summons:

      (1) Copies of two (2) or more photographs, or microphotographs, or other recorded

images taken as proof of the violation; and

      (2) A signed statement by a trained law enforcement officer that, based on inspection of

recorded images, the motor vehicle was being operated in violation of section 31-13-4 of this

subtitle; and

      (3) A statement that recorded images are evidence of a violation of this chapter; and

      (4) A statement that the person who receives a summons under this chapter may either

pay the civil penalty in accordance with the provisions of section 31-41.1-3, or elect to stand trial

for the alleged violation.

 

     31-41.2-5. Hearings. -- Evidence from an automated traffic violation detection system

shall be considered substantive evidence in the prosecution of all civil traffic violations. Evidence

from an automated traffic violation detection system approved by the director of transportation

shall be admitted without further authentication and such evidence may be deemed sufficient to

sustain a civil traffic violation. In addition to any other defenses as set forth herein, any and all

defenses cognizable at law shall be available to the individual who receives the citation summons

commencing a prosecution under this chapter.

 

     SECTION 14. Section 44-62-3 of the General Laws in Chapter 44-62 entitled "Tax

Credits for Contributions to Scholarship Organizations" is hereby amended to read as follows:

 

     44-62-3. Application for the tax credit program. -- (a) Prior to the contribution, a

business entity shall apply in writing to the division of taxation. The application shall contain

such information and certification as the tax administrator deems necessary for the proper

administration of this chapter. A business entity shall be approved if it meets the criteria of this

chapter; the dollar amount of the applied for tax credit is no greater than one hundred thousand

dollars ($100,000) in any tax year, and the scholarship organization which is to receive the

contribution has qualified under section 44-62-2.

      (b) Approvals for contributions under this section shall be made available by the division

of taxation on a first-come-first-serve basis. The total aggregate amount of all tax credits

approved shall not exceed one million dollars ($1,000,000) one million five hundred thousand

dollars ($1,500,000) in a fiscal year.

      (c) The division of taxation shall notify the business entity in writing within thirty (30)

days of the receipt of application of the division's approval or rejection of the application.

      (d) Unless the contribution is part of a two-year plan, the actual cash contribution by the

business entity to a qualified scholarship organization must be made no later than one hundred

twenty (120) days following the approval of its application. If the contribution is part of a two-

year plan, the first year's contribution follows the general rule and the second year's contribution

must be made in the subsequent calendar year by the same date.

      (e) The contributions must be those charitable contributions made in cash as set forth in

the Internal Revenue Code.

 

     SECTION 15. Section 44-18-30B. of the General Laws in Chapter 44-18 entitled "Sales

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

 

     44-18-30B. Exemption from sales tax for sales by writers, composers, artists --

Findings. -- (a) The general assembly makes the following findings of facts:

      (1) The downtown area of the city of Providence has been characterized by blighted

areas, and dilapidated and abandoned structures;

      (2) As a result, the downtown area has been designated an economic development zone

in order to stop the deterioration and stimulate economic activity;

      (3) The capitol center area of the city of Providence has become an attractive location,

especially with the construction of the Providence Place Mall;

      (4) In order to promote, revitalize and redevelop the "Old Downtown" area of the city of

Providence it is necessary to provide tax exemptions to this area as it has been designated as an

economic development zone;

      (5) In order to promote, revitalize, and redevelop the "Downtown or other industrial or

manufacturing buildings" located in the City of Pawtucket, it is necessary to provide tax

exemptions to this area as it has been designated as an economic development zone;

      (6) The development of an active artistic community, including "artists in residence", in

this area would promote economic development, revitalization, tourism, employment

opportunities, and encourage business development by providing alternative commercial

enterprises while in Providence creating a link between the Old Downtown and the Capital Center

Area;

      (7) There is a separate artistic community in the town of Westerly which is important to

preserve, promote, and revitalize, and which is distinct from that in the city of Providence;

      (8) There is a separate artistic community in the city of Woonsocket which is important

to promote and revitalize and which is distinct from that in the cities of Providence and Pawtucket

and the town of Westerly;

      (9) There is a separate artistic community in the city of Warwick which is important to

preserve, promote, and revitalize and which is distinct from that in the cities of Providence,

Pawtucket, Woonsocket and the town of Westerly;

      (10) There are separate artistic communities in the city of Newport and in the town of

Tiverton which are important to promote and revitalize and which are distinct from those in the

cities of Providence, Pawtucket, Warwick and Woonsocket and the towns of Westerly and Little

Compton;

      (11) There is a separate artistic community in the town of Warren which is important to

promote and revitalize and which is distinct from that in the cities of Providence, Pawtucket,

Newport, Warwick and Woonsocket and the towns of Westerly and Tiverton.

     (1) The arts and culture are a significant asset for Rhode Island, one which generates

revenue through increased tourism and economic activity, creates jobs and economic

opportunities, revitalizes communities adding to quality of life and property values, and fosters

creativity, innovation, and entrepreneurship.

     (2) Since 1998 the establishment of arts districts where "one-of-a-kind limited

production" works of art may be sold exempt from state sales tax has resulted in an increased

presence for the arts in designated cities and towns, with benefits to those communities and to the

state.

     (3) Since the establishment of arts districts, many communities have sought legislation to

expand the program to their city or town.

     (4) There is value in expanding the arts district program statewide, providing incentives

for the sale and purchase of art. This is a unique opportunity for Rhode Island to shape history,

and gain an advantage over other states, by becoming the first and only state in the country to

declare a statewide sales tax exemption on art. This will strengthen Rhode Island's identity as an

arts-friendly destination and "State of the Arts".

      (b) (1) This section only applies to sales by writers, composers and artists residing in and

conducting a business within the state of Rhode Island. a section of the defined economic

development zone in the cities of Providence or Pawtucket, or the defined economic development

zone in the town of Westerly or the defined economic zone in the city of Woonsocket, or the

defined economic zone in the city of Warwick, or in those areas within the city of Newport, and

the town of Little Compton, which are zoned "general business," "waterfront business," or

"limited business" or have been designated by the city of Newport as part of the arts district, or in

those areas of the town of Warren which are zoned "waterfront district," "special district,"

"village business district," "manufacturing district," "business district" or "Warren historic

district," or in those areas of the town of Tiverton which are zoned "business commercial,"

"business waterfront" or "village commercial." For the purposes of this section, a "work" means

an original and creative work, whether written, composed or executed for "one-of-a-kind limited"

production and which falls into one of the following categories:

      (i) A book or other writing;

      (ii) A play or the performance of said play;

      (iii) A musical composition or the performance of said composition;

      (iv) A painting, print, photograph or other like picture;

      (v) A sculpture;

      (vi) Traditional and fine crafts;

      (vii) The creation of a film or the acting within the film;.

      (viii) The creation of a dance or the performance of the dance.

      (2) For the purposes of this section, a "work" includes any product generated as a result

of any of the above categories.

      (3) For the purposes of this section, a "work" does not apply to any piece or performance

created or executed for industry oriented, commercial or related production.

      (c) (1) This section applies to sales by any individual:

      (i) Who is a resident of and has a principal place of business situated in the state of

Rhode Island. section of the economic development zone designated as the arts and entertainment

district in the downtown area of the city of Providence or in the city of Pawtucket, or the defined

economic development zone in the town of Westerly or the defined economic zone in the city of

Woonsocket, or the defined economic zone in the city of Warwick, or who is a resident of and has

a principal place of business situated in those areas within the city of Newport or the town of

Little Compton, which are zoned "general business," "waterfront business," or "limited business,"

or have been designated by the city of Newport as part of the arts district, or who is a resident of

and has a principal place of business situated in those areas within the town of Warren which are

zoned "waterfront district," "special district," "village business district," "manufacturing district,"

"business district" or "Warren historic district," or who is a resident or has a principal place of

business situated in those areas within the town of Tiverton which are zoned "business

commercial," "business waterfront" or "village commercial." For the purposes of this section, the

Providence arts and entertainment district in Providence is defined as the area bounded by Pine

Street to the southeast, Dorrance Street to the northeast, Sabin Street to the northwest and Empire

Street to the southwest. Said Providence arts and entertainment district also includes the area

beginning at the point of intersection of Acorn Street and Harris Avenue, then turning east onto

Atwells Avenue to Service Road 7, then turning southerly onto Service Road 7 to Westminster

Street, then turning westerly onto Westminster Street, continuing until Bridgham, then turning

south onto Bridgham to Cranston Street, then turning southwesterly onto Cranston Street, then

continuing to Messer Street, then turning north onto Messer Street to Westminster Street, turning

west onto Westminster Street to US Hwy 6 off ramp, then heading west on US Hwy 6 to Sheridan

Street, then heading northeast on Sheridan Street to Aleppo Street, then turning southeast along

Aleppo Street to Pelham Street, then heading northeast on Pelham Street to Manton Avenue, then

continuing southeast on Manton Avenue until Delaine Street, then heading northeast on Delaine

Street until Appleton Street, then continuing northwesterly on Appleton Street until Bowdoin

Street, then heading north on Bowdoin Street until Barstow Street, then heading east on Barstow

until Valley Street, then heading northeast on Valley Street to Hemlock Street, then turning

southeast on Hemlock Street until Promenade Street, then heading east on Promenade Street to

Acorn Street, then heading south on Acorn Street to the intersection of Acorn Street and Harris

Avenue. The named streets are included in the Providence district; and in Pawtucket is defined as

the area beginning at the point of intersection of Dexter Street and the Central Falls line, then east

along the Central Falls line to the Blackstone River, then north along the city boundary on the

Blackstone River to the Cumberland line, then west along the Pawtucket city boundary line to I-

95, then south along I-95 to Pine Street, then north on Pine Street to AMTRAK Right of Way,

then northwest along the AMTRAK Right of Way to Dexter Street, then north on Dexter Street to

the Central Falls line. The named streets are included in the district. The Westerly arts and

entertainment district is defined as assessor's plat 56, lots 1 through 24, lot 48, lots 50 through 62,

and lots 71 through 82, and assessors plat 66, lots 22 through 26, and lots 29 through 36 the

Woonsocket arts and entertainment district is defined as the area beginning at a point of land on

the southwest bank of the Blackstone River abutting the bridge for the Providence & Worcester

Railroad and proceeding northerly to a point at the intersection of Worrall Street, Clinton Street

and Harry S. Truman Drive, then proceeding northwesterly along Worrall Street to its intersection

with Social Street, then turning westerly on Social Street proceeding to its intersection with Main

Street, Blackstone Street and North Main Street, then turning northwesterly and proceeding along

Blackstone Street to its intersection with River Street, then turning northerly and proceeding

along River Street to its intersection with the north/east bank of Blackstone River, then following

the riverbank southerly to the bridge at Bernon Street and turning easterly crossing the Blackstone

River via Bernon Street and proceeding to its intersection with Front Street, then turning

northeasterly on Front Street and proceeding to its intersection with Hamlet Avenue, and to

include the former courthouse on the southerly side of Front Street at its intersection with Hamlet

Avenue, then turning easterly on Hamlet Avenue and proceeding to its intersection with Manville

Road, then turning southeasterly on Manville Road and proceeding to its intersection with

Davison Avenue, then turning northeasterly on Davison Avenue and proceeding to a point on the

south/west bank of the Blackstone River, then turning northerly, following the southerly

riverbank to the point of beginning. The abovementioned streets are included in the district. The

Warwick arts district is defined as that area known as Pontiac Village, beginning on Route 5 at

the Warwick/Cranston municipal boundary, then south to the intersection of Route 5 and the

Pawtuxet River, then following the Pawtuxet River in an easterly and northerly direction to the

municipal boundary in the vicinity of Knight Street, then from the intersection of Knight Street

and the municipal boundary westerly along the Warwick/Cranston municipal boundary to the

intersection of Route 5 and Greenwich Avenue. The above named streets are included in the

district.

      (ii) Who is determined by the tax administrator in consultation with the Rhode Island

council on the arts, after consideration of any evidence he or she deems necessary or which is

submitted to him or her by the individual, to have written, composed, or executed, either solely or

jointly, a work or works which would fall into one of the categories listed in subsection (b)(1).

      (2) This section also applies to sales by any other gallery located in the state of Rhode

Island. arts and entertainment district described in subsection (c)(1)(i) as well as any other arts

and entertainment district designated by the general assembly, as well as to sales by any other

gallery located in those areas within the city of Newport, or the town of Little Compton, which

are zoned "general business," "waterfront business," or "limited business" or have been

designated by the city of Newport as part of the arts district, as well as to sales by any other

gallery located in those areas within the town of Warren which are zoned "waterfront district,"

"special district," "village business district," "manufacturing district," "business district" or

"Warren historic district," as well as to sales by any other gallery located in those areas within the

town of Tiverton which are zoned "business commercial," "business waterfront" or "village

commercial."

      (3) The tax administrator shall not make a determination unless:

      (i) The individual(s) concerned duly make(s) an application to the tax administrator for

the sales tax exemption which applies to the works defined in this section; and

      (ii) The individual has complied and continues to comply with any and all requests made

by the tax administrator.

      (d) Any individual to whom this section applies and who makes an application to the tax

administrator is entitled to a sales tax exemption for the sale of a work or works sold from the

individual's business located in the economic development zone State of Rhode Island which

would, apart from this section, be subject to the tax rate imposed by the state of Rhode Island.

      (e) When an individual makes a request for the exemption, the tax administrator is

entitled to all books, documents, or other evidence relating to the publication, production or

creation of the works that may be deemed necessary by the tax administrator for the purposes of

the exemption. The time period in which to provide this information is in the sole discretion of

the tax administrator and specified in the notice.

      (f) In addition to the information required in subsection (e), the tax administrator may

require the individual(s) to submit an annual certified accounting of the numbers of works sold,

the type of work sold, and the date of the sale. Failure to file this report may, in the sole discretion

of the tax administrator, terminate the individual's eligibility for the exemption.

      (g) Any person storing, using, or otherwise consuming in this state any work or works

which is deemed to be exempt from the sales tax pursuant to this section is not liable for the use

tax on the work or works.

      (h) Notwithstanding the provisions of this section, any individual to whom this section

may apply shall comply with all the administration, collection, and other provisions of chapters

18 and 19 of this title.

     (4) The Rhode Island council on the arts will oversee the transition to a statewide arts

district program and work with the state tourism agencies, local chambers of commerce, and

advertising/marketing agencies to promote this program, and will coordinate its efforts with the

city and town governments. The Rhode Island council on the arts may request and shall receive

from any department, division, board, bureau, commission, or agency of the state any data,

assistance, and resources, including additional personnel, that will enable it to properly carry out

this program.

     (5) The tax administrator, in cooperation with the Rhode Island council on the arts, will

gather data to assess the overall impact of the statewide arts district program, and issue an annual

report, including, but not be limited to, the impact of the tax exemption on employment, tourism,

sales and spending within the arts sector and adjacent businesses, and any other factors that

describe the impact of the program.

 

     SECTION 16. Section 1 of this article shall take effect on January 1, 2014, and shall

apply to all assets placed in service on or after January 1, 2014. Section 2 of this article shall take

effect upon passage and shall apply to tax years beginning on or after January 1, 2014. Section 4

of this article shall take effect July 1, 2013. Section 8 of this article shall take effect on July 1,

2013 and shall expire on March 31, 2015. Section 15 of this article shall take effect on December

1, 2013 and shall expire on March 31, 2015. The remainder of this article shall take effect upon

passage.