This bill amends Section 44-18-7.1 of the General Laws to add additional definitions related to sales and use taxes. It defines terms such as "agreement," "alcoholic beverages," "bundled transaction," "certified automated system (CAS)," "certified service provider (CSP)," "clothing," "clothing accessories or equipment," "protective equipment," "sport or recreational equipment," "computer," "computer software," "delivered electronically," "electronic," "load and leave," "prewritten computer software," "vendor-hosted prewritten computer software," "drug," and "over-the-counter drug."

The bill also amends the current law to define terms related to food and beverages, telecommunications services, and digital products. It includes definitions for terms such as "grooming and hygiene products," "prescription," "delivery charges," "food and food ingredients," "prepared food," "candy," "soft drinks," "specified digital products," "transferred electronically," "ancillary services," "conference bridging service," "detailed telecommunications billing service," and "voice mail service."

Additionally, the bill amends Section 44-18-30 of the General Laws to exempt certain gross receipts from sales and use taxes. The exemptions include sales and uses beyond the constitutional power of the state, newspapers, school meals, containers, and tangible personal property sold to charitable, educational, and religious organizations. The bill also adds several organizations and institutions to the list of entities exempt from sales and use tax, including educational institutions, churches, orphanages, and nonprofit sporting leagues. It clarifies that contractors working on projects for exempt agencies or organizations are not required to pay sales or use tax on materials and supplies used in the construction. The bill also specifies that certain items are exempt from sales and use tax, such as food and food ingredients, medicines and drugs sold on prescription, durable medical equipment, prosthetic devices, and burial garments. It provides an exemption for motor vehicles sold to nonresidents, with the requirement that the nonresident pays a tax to Rhode Island if their state of residence does not allow a similar exemption. The bill also allows the tax administrator to require licensed motor vehicle dealers to keep records of sales to nonresidents in order to substantiate tax exemptions. The bill includes several other provisions related to tax exemptions, including exemptions for sales in public buildings by blind people, air and water pollution control facilities, camps, certain institutions, educational institutions, motor vehicles and adaptive equipment for persons with disabilities, heating fuels, electricity and gas, and manufacturing machinery and equipment. It provides an exemption for the trade-in value of motor vehicles. The bill adds a new exemption for the sale and storage, use, or consumption of precious metal bullion. It adds exemptions for sales made to commercial vessels and commercial fishing vessels, as well as for the sale of clothing and footwear up to $250 per item. The bill also adds exemptions for the sale and storage, use, or consumption of water for residential use, bibles, boats sold to nonresidents, youth activities equipment, farm equipment, compressed air, and flags. The bill includes exemptions for the sale of motor vehicles and adaptive equipment to veterans with service-connected disabilities, the sale of textbooks by educational institutions, the sale of tangible personal property and supplies used in hazardous waste recycling, the sale of promotional and product literature of boat manufacturers, the sale of food items paid for by food stamps, and the sale of coins with numismatic or investment value. The bill includes exemptions for the sale of equipment used for research and development, the sale of farm structure construction materials, the purchase of telecommunications carrier access service, and the sale and storage of boats or vessels brought into the state exclusively for winter storage, maintenance, repair, or sale. Additionally, the bill includes exemptions for the sale of jewelry display products, the sale and storage of boats or vessels generally, the provision of interstate toll-free calls by banks and regulated investment companies, the sale and storage of mobile and manufactured homes, and the sale and storage of manufacturing business reconstruction materials. The bill adds exemptions for tangible personal property and supplies used in the processing or preparation of floral products and floral arrangements, horse food products, non-motorized recreational vehicles sold to nonresidents, sprinkler and fire alarm systems in existing buildings, aircraft and aircraft parts, renewable energy products, returned property, dietary supplements sold on prescriptions, human blood, agricultural products for human consumption, diesel emission control technology, feed for certain animals used in commercial farming, alcoholic beverages sold by Class A licensees, seeds and plants used to grow food and food ingredients, feminine hygiene products, and breast pump collection and storage supplies. The bill deletes the exemption for beer and malt beverages sold by Class A licensees and removes the minimum markup requirement for alcoholic beverages. The bill aims to exempt the sale of beer and malt beverages at retail from sales and use tax.

Statutes affected:
5397: 44-18-7.1, 44-18-30