The bill proposes the creation of a new chapter, Chapter 19.1, titled "SALES AND USE TAX HOLIDAY," to Title 44 of the General Laws entitled "TAXATION." This chapter introduces a sales tax holiday in Rhode Island, recognizing the success of similar holidays in stimulating the economies of other states. The sales tax holiday is defined to occur annually on the second Saturday and Sunday of July. During this period, a sales and use tax will not be imposed on any non-business retail sales by retailers located in Rhode Island, with specific exceptions. These exceptions include the sale of telecommunication services, tobacco products, meals and beverages, motor vehicles, rental of living quarters, certain telecommunication services, and any single item priced over $2,500.

The bill also outlines the collection and reporting requirements for retailers during the sales tax holiday. Retailers are not to add or collect sales or use tax from non-business purchasers on sales described in the new chapter, except if the tax is erroneously or improperly collected, in which case it must be remitted to the division of taxation. Retailers must adhere to existing reporting requirements unless otherwise directed by the tax administrator. The tax administrator is granted the authority to adopt rules and regulations, as well as prescribe and furnish necessary forms and instructions for the administration of the chapter. The act would take effect upon passage, establishing the sales and use tax holiday as a recurring event aimed at boosting the state's economy.