The bill amends Section 44-18-18.1 of the General Laws in Chapter 44-18, introducing a local meals and beverage tax of one percent on the gross receipts from meals and beverages sold in Rhode Island. This tax applies to all eating and drinking establishments, regardless of whether the food is consumed on-site or taken away. The revenue generated from this tax will be distributed quarterly to the respective cities or towns where the meals and beverages are sold. The bill also defines key terms such as "meal," "beverage," and "eating and/or drinking establishment" to clarify the scope of the tax.

Additionally, the bill includes provisions for the gradual reduction of the local meals and beverage tax, decreasing by 0.25% each year starting January 1, 2026, and ultimately sunsets the tax on January 1, 2029. This phased approach aims to ease the tax burden over time while ensuring that local governments receive the necessary revenue until the tax is fully eliminated. The act will take effect upon passage.