The bill amends Section 44-18-18.1 of the General Laws in Chapter 44-18, titled "Sales and Use Taxes — Liability and Computation," to modify the provisions related to the local meals and beverage tax in Rhode Island. The bill introduces a local meals and beverage tax of one percent of the gross receipts on every meal and/or beverage sold within the state, whether prepared in an eating and/or drinking establishment or not, and regardless of where it is consumed. The tax collected is to be distributed quarterly to the city or town where the meals and beverages are delivered. Definitions for "beverage," "eating and/or drinking establishment," and "meal" are provided to clarify the scope of the tax.

The bill also includes new legal language that outlines a gradual reduction of the local meals and beverage tax. Starting on January 1, 2025, the tax will be reduced by 0.25% each year. Additionally, the bill stipulates that the local meals and beverage tax will sunset, or cease to exist, on January 1, 2028. The act will take effect immediately upon passage. The explanation by the Legislative Council indicates that the purpose of the act is to phase out the local meals and beverage tax by the specified date.

Statutes affected:
2554: 44-18-18.1