The bill amends Chapter 44-18 of the General Laws to introduce a new local digital advertising services tax, designated as section 44-18-36.2. This tax will be levied on purchasers of digital advertising services in Rhode Island, with rates varying based on the global revenues of the service provider. Specifically, the tax rates are set at 2.5% for companies with global revenues between $100 million and $1 billion, 5% for those with revenues between $1 billion and $5 billion, and 7.5% for companies with revenues between $5 billion and $15 billion. The tax is to be collected by the retailer and paid to the tax administrator in accordance with established regulations.

The bill also outlines the distribution of the tax revenue, specifying allocations as follows: 10% to the Rhode Island Public Transit Authority (RIPTA) general operating budget, 15% to a statewide climate resiliency fund, 5% to the University of Rhode Island resiliency toolkit, 20% to the housing development fund through the Department of Housing, 10% to the universal lunch program statewide, 20% to the municipal resiliency plans fund, and 20% to the general fund. Additionally, the bill prohibits businesses from charging customers additional fees specifically labeled as the digital advertising tax; however, it allows for the disclosure of the tax amount in invoices or communications to customers. The act is set to take effect on July 1.