2023 -- S 0598
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LC002337
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S TATE OF RHODE IS L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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A N A CT
RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION
Introduced By: Senator Victoria Gu
Date Introduced: March 07, 2023
Referred To: Senate Housing & Municipal Government
It is enacted by the General Assembly as follows:
1 SECTION 1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property
2 Subject to Taxation" is hereby amended to read as follows:
3 44-3-3. Property exempt.
4 (a) The following property is exempt from taxation:
5 (1) Property belonging to the state, except as provided in § 44-4-4.1;
6 (2) Lands ceded or belonging to the United States;
7 (3) Bonds and other securities issued and exempted from taxation by the government of
8 the United States or of this state;
9 (4) Real estate, used exclusively for military purposes, owned by chartered or incorporated
10 organizations approved by the adjutant general and composed of members of the national guard,
11 the naval militia, or the independent, chartered-military organizations;
12 (5) Buildings for free public schools, buildings for religious worship, and the land upon
13 which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so
14 far as the buildings and land are occupied and used exclusively for religious or educational
15 purposes;
16 (6) Dwellings houses and the land on which they stand, not exceeding one acre in size, or
17 the minimum lot size for zone in which the dwelling house is located, whichever is the greater,
18 owned by, or held in trust for, any religious organization and actually used by its officiating clergy;
19 provided, further, that in the town of Charlestown, where the property previously described in this
1 paragraph is exempt in total, along with dwelling houses and the land on which they stand in
2 Charlestown, not exceeding one acre in size, or the minimum lot size for zone in which the dwelling
3 house is located, whichever is the greater, owned by, or held in trust for, any religious organization
4 and actually used by its officiating clergy, or used as a convent, nunnery, or retreat center by its
5 religious order;
6 (7) Intangible personal property owned by, or held in trust for, any religious or charitable
7 organization, if the principal or income is used or appropriated for religious or charitable purposes;
8 (8) Buildings and personal estate owned by any corporation used for a school, academy, or
9 seminary of learning, and of any incorporated public charitable institution, and the land upon which
10 the buildings stand and immediately surrounding them to an extent not exceeding one acre, so far
11 as they are used exclusively for educational purposes, but no property or estate whatever is hereafter
12 exempt from taxation in any case where any part of its income or profits, or of the business carried
13 on there, is divided among its owners or stockholders; provided, however, that unless any private
14 nonprofit corporation organized as a college or university located in the town of Smithfield reaches
15 a memorandum of agreement with the town of Smithfield, the town of Smithfield shall bill the
16 actual costs for police, fire, and rescue services supplied, unless otherwise reimbursed, to said
17 corporation commencing March 1, 2014;
18 (9) Estates, persons, and families of the president and professors for the time being of
19 Brown University for not more than ten thousand dollars ($10,000) for each officer, the officer’s
20 estate, person, and family included, but only to the extent that any person had claimed and utilized
21 the exemption prior to, and for a period ending, either on or after December 31, 1996;
22 (10) Property especially exempt by charter unless the exemption has been waived in whole
23 or in part;
24 (11) Lots of land exclusively for burial grounds;
25 (12) Property, real and personal, held for, or by, an incorporated library, society, or any
26 free public library, or any free public library society, so far as the property is held exclusively for
27 library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor
28 generally, or for a nonprofit hospital for the sick or disabled;
29 (13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated
30 organizations of veterans of any war in which the United States has been engaged, the parent body
31 of which has been incorporated by act of Congress, to the extent of four hundred thousand dollars
32 ($400,000) if actually used and occupied by the association; provided, that the city council of the
33 city of Cranston may by ordinance exempt the real or personal estate as previously described in
34 this subdivision located within the city of Cranston to the extent of five hundred thousand dollars
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1 ($500,000);
2 (14) Property, real and personal, held for, or by, the fraternal corporation, association, or
3 body created to build and maintain a building or buildings for its meetings or the meetings of the
4 general assembly of its members, or subordinate bodies of the fraternity, and for the
5 accommodation of other fraternal bodies or associations, the entire net income of which real and
6 personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or
7 asylums, a home or homes, a school or schools, for the free education or relief of the members of
8 the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity, their
9 wives, widows, or orphans, and any fund given or held for the purpose of public education,
10 almshouses, and the land and buildings used in connection therewith;
11 (15) Real estate and personal property of any incorporated volunteer fire engine company
12 or incorporated volunteer ambulance or rescue corps in active service;
13 (16) The estate of any person who, in the judgment of the assessors, is unable from infirmity
14 or poverty to pay the tax; provided, that in the towns of Burrillville and West Greenwich, the tax
15 shall constitute a lien for five (5) years on the property where the owner is entitled to the exemption.
16 At the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold
17 or conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the
18 lien immediately becomes due and payable; any person claiming the exemption aggrieved by an
19 adverse decision of an assessor shall appeal the decision to the local board of tax review and
20 thereafter according to the provisions of § 44-5-26;
21 (17) Household furniture and family stores of a housekeeper in the whole, including
22 clothing, bedding, and other white goods, books, and all other tangible personal property items that
23 are common to the normal household;
24 (18) Improvements made to any real property to provide a shelter and fallout protection
25 from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided, that
26 the improvements meet applicable standards for shelter construction established, from time to time,
27 by the Rhode Island emergency management agency. The improvements are deemed to comply
28 with the provisions of any building code or ordinance with respect to the materials or the methods
29 of construction used and any shelter or its establishment is deemed to comply with the provisions
30 of any zoning code or ordinance;
31 (19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator;
32 (20) Manufacturer’s inventory.
33 (i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be
34 a manufacturer within a city or town within this state if that person uses any premises, room, or
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1 place in it primarily for the purpose of transforming raw materials into a finished product for trade
2 through any or all of the following operations: adapting, altering, finishing, making, and
3 ornamenting; provided, that public utilities; non-regulated power producers commencing
4 commercial operation by selling electricity at retail or taking title to generating facilities on or after
5 July 1, 1997; building and construction contractors; warehousing operations, including distribution
6 bases or outlets of out-of-state manufacturers; and fabricating processes incidental to warehousing
7 or distribution of raw materials, such as alteration of stock for the convenience of a customer; are
8 excluded from this definition;
9 (ii) For the purposes of this section and §§ 44-4-10 and 44-5-38, the term “manufacturer’s
10 inventory,” or any similar term, means and includes the manufacturer’s raw materials, the
11 manufacturer’s work in process, and finished products manufactured by the manufacturer in this
12 state, and not sold, leased, or traded by the manufacturer or its title or right to possession divested;
13 provided, that the term does not include any finished products held by the manufacturer in any retail
14 store or other similar selling place operated by the manufacturer whether or not the retail
15 establishment is located in the same building in which the manufacturer operates the manufacturing
16 plant;
17 (iii) For the purpose of § 44-11-2, a “manufacturer” is a person whose principal business
18 in this state consists of transforming raw materials into a finished product for trade through any or
19 all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be
20 principally engaged if the gross receipts that person derived from the manufacturing operations in
21 this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than
22 fifty percent (50%) of the total gross receipts that person derived from all the business activities in
23 which that person engaged in this state during the taxable year. For the purpose of computing the
24 percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished
25 products manufactured by the manufacturer in this state, even though the manufacturer’s store or
26 other selling place may be at a different location from the location of the manufacturer’s
27 manufacturing plant in this state, are deemed to have been derived from manufacturing;
28 (iv) Within the meaning of the preceding paragraphs of this subdivision, the term
29 “manufacturer” also includes persons who are principally engaged in any of the general activities
30 coded and listed as establishments engaged in manufacturing in the Standard Industrial
31 Classification Manual prepared by the Technical Committee on Industrial Classification, Office of
32 Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as
33 revised from time to time, but eliminating as manufacturers those persons, who, because of their
34 limited type of manufacturing activities, are classified in the manual as falling within the trade
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1 rather than an industrial classification of manufacturers. Among those thus eliminated, and
2 accordingly also excluded as manufacturers within the meaning of this paragraph, are persons
3 primarily engaged in selling, to the general public, products produced on the premises from which
4 they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and
5 custom tailors, except, that a person who manufactures bakery products for sale primarily for home
6 delivery, or through one or more non-baking retail outlets, and whether or not retail outlets are
7 operated by the person, is a manufacturer within the meaning of this paragraph;
8 (v) The term “Person” means and includes, as appropriate, a person, partnership, or
9 corporation; and
10 (vi) The department of revenue shall provide to the local assessors any assistance that is
11 necessary in determining the proper application of the definitions in this subdivision;
12 (21) Real and tangible personal property acquired to provide a treatment facility used
13 primarily to control the pollution or contamination of the waters or the air of the state, as defined
14 in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed,
15 reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or
16 standards for the control of water or air pollution or contamination, and certified as approved in an
17 order entered by the director of environmental management. The property is exempt as long as it is
18 operated properly in compliance with the order of approval of the director of environmental
19 management; provided, that any grant of the exemption by the director of environmental
20 management in excess of ten (10) years is approved by the city or town in which the property is
21 situated. This provision applies only to water and air pollution control properties and facilities
22 installed for the treatment of waste waters and air contaminants resulting from industrial
23 processing; furthermore, it applies only to water or air pollution control properties and facilities
24 placed in operation for the first time after April 13, 1970;
25 (22) Manufacturing machinery and equipment acquired or used by a manufacturer after
26 December 31, 1974. Manufacturing machinery and equipment is defined as:
27 (i) Machinery and equipment used exclusively in the actual manufacture or conversion of
28 raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision
29 (20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and
30 development or for quality assurance of its manufactured products;
31 (ii) Machinery and equipment that is partially used in the actual manufacture or conversion
32 of raw materials or goods in process of manufacture by a manufacturer, as defined in subdivision
33 (20), and machinery, fixtures, and equipment used by a manufacturer for research and development
34 or for quality assurance of its manufactured products, to the extent to which the machinery and
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1 equipment is used for the manufacturing processes, research and development, or quality assurance.
2 In the instances where machinery and equipment is used in both manufacturing and/or research and
3 development and/or quality assurance activities and non-manufacturing activities, the assessment
4 on machinery and equipment is prorated by applying the percentage of usage of the equipment for
5 the manufacturing, research and development, and quality-assurance activity to the value of the
6 machinery and equipment for purposes of taxation, and the portion of the value used for
7 manufacturing, research and development, and quality assurance is exempt from taxation. The
8 burden of demonstrating this percentage usage of machinery and equipment for manufacturing and
9 for research and development and/or quality assurance of its manufactured products rests with the
10 manufacturer; and
11 (iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was
12 purchased after July 1, 1997; provided that the city or town council of the city or town in which the
13 machinery and equipment is located adopts an ordinance exempting the machinery and equipment
14 from taxation. For purposes of this subsection, city councils and town councils of any municipality
15 may, by ordinance, wholly or partially exempt from taxation the machinery and equipment
16 discussed in this subsection for the period of time established in the ordinance and may, by
17 ordinance, establish the procedures for taxpayers to avail themselves of the benefit of any
18 exemption permitted under this section; provided, that the ordinance does not apply to any
19 machinery or equipment of a business, subsidiary, or any affiliated business that locates or relocates
20 from a city or town in this state to another city or town in the state;
21 (23) Precious metal bullion, meaning any elementary metal that has been put through a
22 process of melting or refining, and that is in a state or condition that its value depends upon its
23 content and not its form. The term does not include fabricated precious metal that has been
24 processed or manufactured for some one or more specific and customary industrial, professional,
25 or artistic uses;
26 (24) Hydroelectric power-generation equipment, which includes, but is not limited to,
27 turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers,
28 protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The
29 hydroelectric power-generation equipment must have been purchased after July 1, 1979, and
30 acquired or used by a person or corporation who or that owns or leases a dam and utilizes the
31 equipment to generate hydroelectric power;
32 (25) Subject to authorization by formal action of the council of any city or town, any real
33 or personal property owned by, held in trust for, or leased to an organization incorporated under
34 chapter 6 of title 7, as amended, or an organization meeting the definition of “charitable trust” set
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