The bill amends Section 44-18-30 of the General Laws, introducing a new title "44-18-30. Gross receipts exempt from sales and use taxes," and provides detailed definitions for terms such as "newspaper," "returnable containers," and "consumed." It specifies various exemptions from sales and use taxes, including sales beyond the state's constitutional power to tax, newspapers, school meals, containers, charitable, educational, and religious organizations, gasoline, and purchases for manufacturing purposes. The bill also details the tax exemption process for contractors working with exempt organizations and conditions under which tangible personal property, software, and utilities used in manufacturing are exempt from taxation. Additionally, it exempts sales to the state, cities, towns, districts, or other political subdivisions, food and food ingredients with specific exclusions, medicines, drugs, and durable medical equipment sold on prescription, prosthetic devices, mobility enhancing equipment, motor vehicles to nonresidents, sales in public buildings by blind people, air and water pollution control facilities, rentals at camps or retreat houses operated by certain organizations, living quarters in licensed institutions, educational institutions, and motor vehicles and adaptive equipment for persons with disabilities.

The bill further proposes exemptions for "wheelchair accessible taxicabs" and "wheelchair accessible public motor vehicles," heating fuels, electricity and gas, manufacturing machinery and equipment, the trade-in value of motor vehicles, sales to commercial vessels over fifty tons, commercial fishing vessels and equipment, and clothing and footwear sales up to $500 per item starting July 1, 2024. It also exempts water for residential use, Bibles, boats sold to nonresidents, youth activities equipment, farm equipment, compressed air, flags, motor vehicles and adaptive equipment for certain veterans, textbooks, tangible personal property used in on-site hazardous waste recycling, promotional and product literature of boat manufacturers shipped outside Rhode Island, food items paid for by food stamps, transportation charges by motor carriers, the trade-in value of boats, and equipment used for research and development by qualifying firms. New exemptions include research and development equipment, numismatic coins, materials for new farm construction, telecommunications carrier access services, winter storage of boats, jewelry display products, banks and regulated investment companies for interstate toll-free calls, mobile and manufactured homes, materials for reconstructing manufacturing facilities after a disaster, floral product processing supplies, horse food products, non-motorized recreational vehicles sold to nonresidents, sprinkler and fire alarm systems for existing buildings, renewable energy equipment, dietary supplements sold on prescriptions, human blood, agricultural products for human consumption, diesel emission control technology, feed for certain animals used in commercial farming, storage of alcoholic beverages by a Class A licensee, seeds and plants for food growth, feminine hygiene products, breast pump collection and storage supplies, and the trade-in value of motorcycles. The exemption amount for clothing and footwear will increase from $250 to $500, effective July 1, 2023, and the act will take effect upon passage.

Statutes affected:
2358: 44-18-30