TITLE 44
Taxation
CHAPTER 44-18
Sales and Use Taxes Liability and Computation
SECTION 44-18-30
§ 44-18-30 Gross receipts exempt from
sales and use taxes.
There are exempted from the taxes imposed by this chapter the following gross
receipts:
(1) Sales and uses beyond constitutional power of
state. From the sale and from the storage, use, or other consumption in
this state of tangible personal property the gross receipts from the sale of
which, or the storage, use, or other consumption of which, this state is
prohibited from taxing under the Constitution of the United States or under the
constitution of this state.
(2) Newspapers.
(i) From the sale and from the storage, use, or other
consumption in this state of any newspaper.
(ii) "Newspaper" means an unbound publication printed on
newsprint that contains news, editorial comment, opinions, features,
advertising matter, and other matters of public interest.
(iii) "Newspaper" does not include a magazine, handbill,
circular, flyer, sales catalog, or similar item unless the item is printed for,
and distributed as, a part of a newspaper.
(3) School meals. From the sale and from the storage,
use, or other consumption in this state of meals served by public, private, or
parochial schools, school districts, colleges, universities, student
organizations, and parent-teacher associations to the students or teachers of a
school, college, or university whether the meals are served by the educational
institutions or by a food service or management entity under contract to the
educational institutions.
(4) Containers.
(i) From the sale and from the storage, use, or other
consumption in this state of:
(A) Non-returnable containers, including boxes, paper bags,
and wrapping materials that are biodegradable and all bags and wrapping
materials utilized in the medical and healing arts, when sold without the
contents to persons who place the contents in the container and sell the
contents with the container.
(B) Containers when sold with the contents if the sale price
of the contents is not required to be included in the measure of the taxes
imposed by this chapter.
(C) Returnable containers when sold with the contents in
connection with a retail sale of the contents or when resold for refilling.
(ii) As used in this subdivision, the term "returnable
containers" means containers of a kind customarily returned by the buyer of the
contents for reuse. All other containers are "non-returnable containers."
(5)(i) Charitable, educational, and religious
organizations. From the sale to, as in defined in this section, and from
the storage, use, and other consumption in this state, or any other state of
the United States of America, of tangible personal property by hospitals not
operated for a profit; "educational institutions" as defined in subdivision
(18) not operated for a profit; churches, orphanages, and other institutions or
organizations operated exclusively for religious or charitable purposes;
interest-free loan associations not operated for profit; nonprofit, organized
sporting leagues and associations and bands for boys and girls under the age of
nineteen (19) years; the following vocational student organizations that are
state chapters of national vocational students organizations: Distributive
Education Clubs of America (DECA); Future Business Leaders of America, Phi Beta
Lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers of
America/Home Economics Related Occupations (FHA/HERD); Vocational Industrial
Clubs of America (VICA); organized nonprofit golden age and senior citizens
clubs for men and women; and parent-teacher associations; and from the sale,
storage, use, and other consumption in this state, of and by the Industrial
Foundation of Burrillville, a Rhode Island domestic nonprofit corporation.
(ii) In the case of contracts entered into with the federal
government, its agencies, or instrumentalities, this state, or any other state
of the United States of America, its agencies, any city, town, district, or
other political subdivision of the states; hospitals not operated for profit;
educational institutions not operated for profit; churches, orphanages, and
other institutions or organizations operated exclusively for religious or
charitable purposes, the contractor may purchase such materials and supplies
(materials and/or supplies are defined as those that are essential to the
project) that are to be utilized in the construction of the projects being
performed under the contracts without payment of the tax.
(iii) The contractor shall not charge any sales or use tax to
any exempt agency, institution, or organization but shall in that instance
provide his or her suppliers with certificates in the form as determined by the
division of taxation showing the reason for exemption and the contractor's
records must substantiate the claim for exemption by showing the disposition of
all property so purchased. If any property is then used for a nonexempt
purpose, the contractor must pay the tax on the property used.
(6) Gasoline. From the sale and from the storage, use,
or other consumption in this state of: (i) gasoline and other products taxed
under chapter 36 of title 31 and (ii) fuels used for the propulsion of
airplanes.
(7) Purchase for manufacturing purposes.
(i) From the sale and from the storage, use, or other
consumption in this state of computer software, tangible personal property,
electricity, natural gas, artificial gas, steam, refrigeration, and water, when
the property or service is purchased for the purpose of being manufactured into
a finished product for resale and becomes an ingredient, component, or integral
part of the manufactured, compounded, processed, assembled, or prepared
product, or if the property or service is consumed in the process of
manufacturing for resale computer software, tangible personal property,
electricity, natural gas, artificial gas, steam, refrigeration, or water.
(ii) "Consumed" means destroyed, used up, or worn out to the
degree or extent that the property cannot be repaired, reconditioned, or
rendered fit for further manufacturing use.
(iii) "Consumed" includes mere obsolescence.
(iv) "Manufacturing" means and includes manufacturing,
compounding, processing, assembling, preparing, or producing.
(v) "Process of manufacturing" means and includes all
production operations performed in the producing or processing room, shop, or
plant, insofar as the operations are a part of and connected with the
manufacturing for resale of tangible personal property, electricity, natural
gas, artificial gas, steam, refrigeration, or water and all production
operations performed insofar as the operations are a part of and connected with
the manufacturing for resale of computer software.
(vi) "Process of manufacturing" does not mean or include
administration operations such as general office operations, accounting,
collection or sales promotion, nor does it mean or include distribution
operations that occur subsequent to production operations, such as handling,
storing, selling, and transporting the manufactured products, even though the
administration and distribution operations are performed by, or in connection
with, a manufacturing business.
(8) State and political subdivisions. From the sale
to, and from the storage, use, or other consumption by, this state, any city,
town, district, or other political subdivision of this state. Every
redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be
a subdivision of the municipality where it is located.
(9) Food and food ingredients. From the sale and
storage, use, or other consumption in this state of food and food ingredients
as defined in § 44-18-7.1(l).
For the purposes of this exemption "food and food
ingredients" shall not include candy, soft drinks, dietary supplements,
alcoholic beverages, tobacco, food sold through vending machines, or prepared
food, as those terms are defined in § 44-18-7.1, unless the prepared food
is:
(i) Sold by a seller whose primary NAICS classification is
manufacturing in sector 311, except sub-sector 3118 (bakeries);
(ii) Sold in an unheated state by weight or volume as a
single item;
(iii) Bakery items, including bread, rolls, buns, biscuits,
bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts,
muffins, bars, cookies, tortillas; and
is not sold with utensils provided by the seller, including
plates, knives, forks, spoons, glasses, cups, napkins, or straws.
(10) Medicines, drugs, and durable medical equipment.
From the sale and from the storage, use, or other consumption in this state, of;
(i) "Drugs" as defined in § 44-18-7.1(h)(i), sold on
prescriptions, medical oxygen, and insulin whether or not sold on prescription.
For purposes of this exemption drugs shall not include over-the-counter drugs
and grooming and hygiene products as defined in § 44-18-7.1(h)(iii).
(ii) Durable medical equipment as defined in §
44-18-7.1(k) for home use only, including, but not limited to, syringe
infusers, ambulatory drug delivery pumps, hospital beds, convalescent chairs,
and chair lifts. Supplies used in connection with syringe infusers and
ambulatory drug delivery pumps that are sold on prescription to individuals to
be used by them to dispense or administer prescription drugs, and related
ancillary dressings and supplies used to dispense or administer prescription
drugs, shall also be exempt from tax.
(11) Prosthetic devices and mobility enhancing equipment.
From the sale and from the storage, use, or other consumption in this
state, of prosthetic devices as defined in § 44-18-7.1(t), sold on
prescription, including, but not limited to: artificial limbs, dentures,
spectacles, eyeglasses, and artificial eyes; artificial hearing devices and
hearing aids, whether or not sold on prescription; and mobility enhancing
equipment as defined in § 44-18-7.1(p), including wheelchairs, crutches
and canes.
(12) Coffins, caskets, and burial garments. From the
sale and from the storage, use, or other consumption in this state of coffins
or caskets, and shrouds or other burial garments that are ordinarily sold by a
funeral director as part of the business of funeral directing.
(13) Motor vehicles sold to nonresidents.
(i) From the sale, subsequent to June 30, 1958, of a motor
vehicle to a bona fide nonresident of this state who does not register the
motor vehicle in this state, whether the sale or delivery of the motor vehicle
is made in this state or at the place of residence of the nonresident. A motor
vehicle sold to a bona fide nonresident whose state of residence does not allow
a like exemption to its nonresidents is not exempt from the tax imposed under
§ 44-18-20. In that event, the bona fide nonresident pays a tax to Rhode
Island on the sale at a rate equal to the rate that would be imposed in his or
her state of residence not to exceed the rate that would have been imposed
under § 44-18-20. Notwithstanding any other provisions of law, a licensed
motor vehicle dealer shall add and collect the tax required under this
subdivision and remit the tax to the tax administrator under the provisions of
chapters 18 and 19 of this title. When a Rhode Island licensed, motor vehicle
dealer is required to add and collect the sales and use tax on the sale of a
motor vehicle to a bona fide nonresident as provided in this section, the
dealer in computing the tax takes into consideration the law of the state of
the nonresident as it relates to the trade-in of motor vehicles.
(ii) The tax administrator, in addition to the provisions of
§§ 44-19-27 and 44-19-28, may require any licensed motor vehicle
dealer to keep records of sales to bona fide nonresidents as the tax
administrator deems reasonably necessary to substantiate the exemption provided
in this subdivision, including the affidavit of a licensed motor vehicle dealer
that the purchaser of the motor vehicle was the holder of, and had in his or
her possession a valid out of state motor vehicle registration or a valid out
of state driver's license.
(iii) Any nonresident who registers a motor vehicle in this
state within ninety (90) days of the date of its sale to him or her is deemed
to have purchased the motor vehicle for use, storage, or other consumption in
this state, and is subject to, and liable for, the use tax imposed under the
provisions of § 44-18-20.
(14) Sales in public buildings by blind people. From
the sale and from the storage, use, or other consumption in all public
buildings in this state of all products or wares by any person licensed under
§ 40-9-11.1.
(15) Air and water pollution control facilities. From
the sale, storage, use, or other consumption in this state of tangible personal
property or supplies acquired for incorporation into or used and consumed in
the operation of a facility, the primary purpose of which is to aid in the
control of the pollution or contamination of the waters or air of the state, as
defined in chapter 12 of title 46 and chapter 25 of title 23, respectively, and
that has been certified as approved for that purpose by the director of
environmental management. The director of environmental management may certify
to a portion of the tangible personal property or supplies acquired for
incorporation into those facilities or used and consumed in the operation of
those facilities to the extent that that portion has as its primary purpose the
control of the pollution or contamination of the waters or air of this state.
As used in this subdivision, "facility" means any land, facility, device,
building, machinery, or equipment.
(16) Camps. From the rental charged for living
quarters, or sleeping, or housekeeping accommodations at camps or retreat
houses operated by religious, charitable, educational, or other organizations
and associations mentioned in subdivision (5), or by privately owned and
operated summer camps for children.
(17) Certain institutions. From the rental charged for
living or sleeping quarters in an institution licensed by the state for the
hospitalization, custodial, or nursing care of human beings.
(18) Educational institutions. From the rental charged
by any educational institution for living quarters, or sleeping, or
housekeeping accommodations or other rooms or accommodations to any student or
teacher necessitated by attendance at an educational institution. "Educational
institution" as used in this section means an institution of learning not
operated for profit that is empowered to confer diplomas, educational,
literary, or academic degrees; that has a regular faculty, curriculum, and
organized body of pupils or students in attendance throughout the usual school
year; that keeps and furnishes to students and others records required and
accepted for entrance to schools of secondary, collegiate, or graduate rank;
and no part of the net earnings of which inures to the benefit of any
individual.
(19) Motor vehicle and adaptive equipment for persons with
disabilities.
(i) From the sale of: (A) Special adaptations; (B) The
component parts of the special adaptations; or (C) A specially adapted motor
vehicle; provided that the owner furnishes to the tax administrator an
affidavit of a licensed physician to the effect that the specially adapted
motor vehicle is necessary to transport a family member with a disability or
where the vehicle has been specially adapted to meet the specific needs of the
person with a disability. This exemption applies to not more than one motor
vehicle owned and registered for personal, noncommercial use.
(ii) For the purpose of this subsection the term "special
adaptations" includes, but is not limited to: wheelchair lifts, wheelchair
carriers, wheelchair ramps, wheelchair securements, hand controls, steering
devices, extensions, relocations, and crossovers of operator controls,
power-assisted controls, raised tops or dropped floors, raised entry doors, or
alternative signaling devices to auditory signals.
(iii) From the sale of: (a) special adaptations, (b) the
component parts of the special adaptations, for a "wheelchair accessible
taxicab" as defined in § 39-14-1, and/or a "wheelchair accessible public
motor vehicle" as defined in § 39-14.1-1.
(iv) For the purpose of this subdivision the exemption for a
"specially adapted motor vehicle" means a use tax credit not to exceed the
amount of use tax that would otherwise be due on the motor vehicle, exclusive
of any adaptations. The use tax credit is equal to the cost of the special
adaptations, including installation.
(20) Heating fuels. From the sale and from the
storage, use, or other consumption in this state of every type of heating fuel.
(21) Electricity and gas. From the sale and from the
storage, use, or other consumption in this state of electricity and gas.
(22) Manufacturing machinery and equipment.
(i) From the sale and from the storage, use, or other
consumption in this state of tools, dies, molds, machinery, equipment
(including replacement parts), and related items to the extent used in an
industrial plant in connection with the actual manufacture, conversion, or
processing of tangible personal property, or to the extent used in connection
with the actual manufacture, conversion, or processing of computer software as
that term is utilized in industry numbers 7371, 7372, and 7373 in the standard
industrial classification manual prepared by the Technical Committee on
Industrial Classification, Office of Statistical Standards, Executive Office of
the President, United States Bureau of the Budget, as revised from time to
time, to be sold, or that machinery and equipment used in the furnishing of
power to an industrial manufacturing plant. For the purposes of this
subdivision, "industrial plant" means a factory at a fixed location primarily
engaged in the manufacture, conversion, or processing of tangible personal
property to be sold in the regular course of business;
(ii) Machinery and equipment and related items are not deemed
to be used in connection with the actual manufacture, conversion, or processing
of tangible personal property, or in connection with the actual manufacture,
conversion, or processing of computer software as that term is utilized in
industry numbers 7371, 7372, and 7373 in the standard industrial classification
manual prepared by the Technical Committee on Industrial Classification, Office
of Statistical Standards, Executive Office of the President, United States
Bureau of the Budget, as revised from time to time, to be sold to the extent
the property is used in administration or distribution operations;
(iii) Machinery and equipment and related items used in
connection with the actual manufacture, conversion, or processing of any
computer software or any tangible personal property that is not to be sold and
that would be exempt under subdivision (7) or this subdivision if purchased
from a vendor or machinery and equipment and related items used during any
manufacturing, converting, or processing function is exempt under this
subdivision even if that operation, function, or purpose is not an integral or
essential part of a continuous production flow or manufacturing process;
(iv) Where a portion of a group of portable or mobile
machinery is used in connection with the actual manufacture, conversion, or
processing of computer software or tangible personal property to be sold, as
previously defined, that portion, if otherwise qualifying, is exempt under this
subdivision even though the machinery in that group is used interchangeably and
not otherwise identifiable as to use.
(23) Trade-in value of motor vehicles. From the sale
and from the storage, use, or other consumption in this state of so much of the
purchase price paid for a new or used automobile as is allocated for a trade-in
allowance on the automobile of the buyer given in trade to the seller, or of
the proceeds applicable only to the automobile as are received from the
manufacturer of automobiles for the repurchase of the automobile whether the
repurchase was voluntary or not towards the purchase of a new or used
automobile by the buyer. For the purpose of this subdivision, the word
"automobile" means a private passenger automobile not used for hire and does
not refer to any other type of motor vehicle.
(24) Precious metal bullion.
(i) From the sale and from the storage, use, or other
consumption in this state of precious metal bullion, substantially equivalent
to a transaction in securities or commodities.
(ii) For purposes of this subdivision, "precious metal
bullion" means any elementary precious metal that has been put through a
process of smelting or refining, including, but not limited to, gold, silver,
platinum, rhodium, and chromium, and that is in a state or condition that its
value depends upon its content and not upon its form.
(iii) The term does not include fabricated precious metal
that has been processed or manufactured for some one or more specific and
customary industrial, professional, or artistic uses.
(25) Commercial vessels. From sales made to a
commercial ship, barge, or other vessel of fifty (50) tons burden or over,
primarily engaged in interstate or foreign commerce, and from the repair,
alteration, or conversion of the vessels, and from the sale of property
purchased for the use of the vessels including provisions, supplies, and
material for the maintenance and/or repair of the vessels.
(26) Commercial fishing vessels. From the sale and
from the storage, use, or other consumption in this state of vessels and other
water craft that are in excess of five (5) net tons and that are used
exclusively for "commercial fishing", as defined in this subdivision, and from
the repair, alteration, or conversion of those vessels and other watercraft,
and from the sale of property purchased for the use of those vessels and other
watercraft including provisions, supplies, and material for the maintenance
and/or repair of the vessels and other watercraft and the boats nets, cables,
tackle, and other fishing equipment appurtenant to or used in connection with
the commercial fishing of the vessels and other watercraft. "Commercial
fishing" means taking or attempting to take any fish, shellfish, crustacea, or
bait species with the intent of disposing of it for profit or by sale, barter,
trade, or in commercial channels. The term does not include subsistence
fishing, i.e., the taking for personal use and not for sale or barter; or sport
fishing; but shall include vessels and other watercraft with a Rhode Island
party and charter boat license issued by the department of environmental
management pursuant to § 20-2-27.1 that meet the following criteria: (i)
The operator must have a current U.S.C.G. license to carry passengers for hire;
(ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii)
U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a
Rhode Island boat registration to prove Rhode Island home port status; and (iv)
The vessel must be used as a commercial passenger carrying fishing vessel to
carry passengers for fishing. The vessel must be able to demonstrate that at
least fifty percent (50%) of its annual gross income derives from charters or
provides documentation of a minimum of one hundred (100) charter trips
annually; and (v) The vessel must have a valid Rhode Island party and charter
boat license. The tax administrator shall implement the provisions of this
subdivision by promulgating rules and regulations relating thereto.
(27) Clothing and footwear. From the sales of articles
of clothing, including footwear, intended to be worn or carried on or about the
human body for sales prior to October 1, 2012. Effective October 1, 2012, the
exemption will apply to the sales of articles of clothing, including footwear,
intended to be worn or carried on or about the human body up to two hundred and
fifty dollars ($250) of the sales price per item. For the purposes of this
section, "clothing or footwear" does not include clothing accessories or
equipment or special clothing or footwear primarily designed for athletic
activity or protective use as these terms are defined in section 44-18-7.1(f).
In recognition of the work being performed by the streamlined sales and use tax
governing board, upon passage of any federal law that authorizes states to
require remote sellers to collect and remit sales and use taxes, this unlimited
exemption will apply as it did prior to October 1, 2012. The unlimited
exemption on sales of clothing and footwear shall take effect on the date that
the state requires remote sellers to collect and remit sales and use taxes.
(28) Water for residential use. From the sale and from
the storage, use, or other consumption in this state of water furnished for
domestic use by occupants of residential premises.
(29) Bibles. [Unconstitutional; see Ahlburn v.
Clark, 728 A.2d 449 (R.I. 1999); see Notes to Decisions.] From the sale
and from the storage, use, or other consumption in the state of any canonized
scriptures of any tax-exempt nonprofit religious organization including, but
not limited to, the Old Testament and the New Testament versions.
(30) Boats.
(i) From the sale of a boat or vessel to a bona fide
nonresident of this state who does not register the boat or vessel in this
state or document the boat or vessel with the United States government at a
home port within the state, whether the sale or delivery of the boat or vessel
is made in this state or elsewhere; provided, that the nonresident transports
the boat within thirty (30) days after delivery by the seller outside the state
for use thereafter solely outside the state.
(ii) The tax administrator, in addition to the provisions of
§§ 44-19-17 and 44-19-28, may require the seller of the boat or
vessel to keep records of the sales to bona fide nonresidents as the tax
administrator deems reasonably necessary to substantiate the exemption provided
in this subdivision, including the affidavit of the seller that the buyer
represented himself or herself to be a bona fide nonresident of this state and
of the buyer that he or she is a nonresident of this state.
(31) Youth activities equipment. From the sale,
storage, use, or other consumption in this state of items for not more than
twenty dollars ($20.00) each by nonprofit Rhode Island eleemosynary
organizations, for the purposes of youth activities that the organization is
formed to sponsor and support; and by accredited elementary and secondary
schools for the purposes of the schools or of organized activities of the
enrolled students.
(32) Farm equipment. From the sale and from the
storage or use of machinery and equipment used directly for commercial farming
and agricultural production; including, but not limited to: tractors, ploughs,
harrows, spreaders, seeders, milking machines, silage conveyors, balers, bulk
milk storage tanks, trucks with farm plates, mowers, combines, irrigation
equipment, greenhouses and greenhouse coverings, graders and packaging
machines, tools and supplies and other farming equipment, including replacement
parts appurtenant to or used in connection with commercial farming and tools
and supplies used in the repair and maintenance of farming equipment.
"Commercial farming" means the keeping or boarding of five (5) or more horses
or the production within this state of agricultural products, including, but
not limited to, field or orchard crops, livestock, dairy, and poultry, or their
products, where the keeping, boarding, or production provides at least two
thousand five hundred dollars ($2,500) in annual gross sales to the operator,
whether an individual, a group, a partnership, or a corporation for exemptions
issued prior to July 1, 2002. For exemptions issued or renewed after July 1,
2002, there shall be two (2) levels. Level I shall be based on proof of annual,
gross sales from commercial farming of at least twenty-five hundred dollars
($2,500) and shall be valid for purchases subject to the exemption provided in
this subdivision except for motor vehicles with an excise tax value of five
thousand dollars ($5,000) or greater. Level II shall be based on proof of
annual gross sales from commercial farming of at least ten thousand dollars
($10,000) or greater and shall be valid for purchases subject to the exemption
provided in this subdivision including motor vehicles with an excise tax value
of five thousand dollars ($5,000) or greater. For the initial issuance of the
exemptions, proof of the requisite amount of annual gross sales from commercial
farming shall be required for the prior year; for any renewal of an exemption
granted in accordance with this subdivision at either level I or level II,
proof of gross annual sales from commercial farming at the requisite amount
shall be required for each of the prior two (2) years. Certificates of
exemption issued or renewed after July 1, 2002, shall clearly indicate the
level of the exemption and be valid for four (4) years after the date of issue.
This exemption applies even if the same equipment is used for ancillary uses,
or is temporarily used for a non-farming or a non-agricultural purpose, but
shall not apply to motor vehicles acquired after July 1, 2002, unless the
vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible
for registration displaying farm plates as provided for in § 31-3-31.
(33) Compressed air. From the sale and from the
storage, use, or other consumption in the state of compressed air.
(34) Flags. From the sale and from the storage,
consumption, or other use in this state of United States, Rhode Island or
POW-MIA flags.
(35) Motor vehicle and adaptive equipment to certain
veterans. From the sale of a motor vehicle and adaptive equipment to and
for the use of a veteran with a service-connected loss of or the loss of use of
a leg, foot, hand, or arm, or any veteran who is a double amputee, whether
service connected or not. The motor vehicle must be purchased by and especially
equipped for use by the qualifying veteran. Certificate of exemption or refunds
of taxes paid is granted under rules or regulations that the tax administrator
may prescribe.
(36) Textbooks. From the sale and from the storage,
use, or other consumption in this state of textbooks by an "educational
institution", as defined in subdivision (18) of this section, and any
educational institution within the purview of § 16-63-9(4), and used
textbooks by any purveyor.
(37) Tangible personal property and supplies used in
on-site hazardous waste recycling, reuse, or treatment. From the sale,
storage, use, or other consumption in this state of tangible personal property
or supplies used or consumed in the operation of equipment, the exclusive
function of which is the recycling, reuse, or recovery of materials (other than
precious metals, as defined in subdivision (24)(ii) of this section) from the
treatment of "hazardous wastes", as defined in § 23-19.1-4, where the
"hazardous wastes" are generated in Rhode Island solely by the same taxpayer
and where the personal property is located at, in, or adjacent to a generating
facility of the taxpayer in Rhode Island. The taxpayer shall procure an order
from the director of the department of environmental management certifying that
the equipment and/or supplies as used or consumed, qualify for the exemption
under this subdivision. If any information relating to secret processes or
methods of manufacture, production, or treatment is disclosed to the department
of environmental management only to procure an order, and is a "trade secret"
as defined in § 28-21-10(b), it is not open to public inspection or
publicly disclosed unless disclosure is required under chapter 21 of title 28
or chapter 24.4 of title 23.
(38) Promotional and product literature of boat
manufacturers. From the sale and from the storage, use, or other
consumption of promotional and product literature of boat manufacturers shipped
to points outside of Rhode Island that either: (i) Accompany the product that
is sold; (ii) Are shipped in bulk to out-of-state dealers for use in the sale
of the product; or (iii) Are mailed to customers at no charge.
(39) Food items paid for by food stamps. From the sale
and from the storage, use, or other consumption in this state of eligible food
items payment for which is properly made to the retailer in the form of U.S.
government food stamps issued in accordance with the Food Stamp Act of 1977, 7
U.S.C. § 2011 et seq.
(40) Transportation charges. From the sale or hiring
of motor carriers as defined in § 39-12-2(l) to haul goods, when the
contract or hiring cost is charged by a motor freight tariff filed with the
Rhode Island public utilities commission on the number of miles driven or by
the number of hours spent on the job.
(41) Trade-in value of boats. From the sale and from
the storage, use, or other consumption in this state of so much of the purchase
price paid for a new or used boat as is allocated for a trade-in allowance on
the boat of the buyer given in trade to the seller or of the proceeds
applicable only to the boat as are received from an insurance claim as a result
of a stolen or damaged boat, towards the purchase of a new or used boat by the
buyer.
(42) Equipment used for research and development. From
the sale and from the storage, use, or other consumption of equipment to the
extent used for research and development purposes by a qualifying firm. For the
purposes of this subdivision, "qualifying firm" means a business for which the
use of research and development equipment is an integral part of its operation
and "equipment" means scientific equipment, computers, software, and related
items.
(43) Coins. From the sale and from the other
consumption in this state of coins having numismatic or investment value.
(44) Farm structure construction materials. Lumber,
hardware, and other materials used in the new construction of farm structures,
including production facilities such as, but not limited to, farrowing sheds,
free stall and stanchion barns, milking parlors, silos, poultry barns, laying
houses, fruit and vegetable storages, rooting cellars, propagation rooms,
greenhouses, packing rooms, machinery storage, seasonal farm worker housing,
certified farm markets, bunker and trench silos, feed storage sheds, and any
other structures used in connection with commercial farming.
(45) Telecommunications carrier access service.
Carrier access service or telecommunications service when purchased by a
telecommunications company from another telecommunications company to
facilitate the provision of telecommunications service.
(46) Boats or vessels brought into the state exclusively
for winter storage, maintenance, repair or sale. Notwithstanding the
provisions of §§ 44-18-10, 44-18-11 and 44-18-20, the tax imposed by
§ 44-18-20 is not applicable for the period commencing on the first day of
October in any year up to and including the 30th day of April next succeeding
with respect to the use of any boat or vessel within this state exclusively for
purposes of: (i) Delivery of the vessel to a facility in this state for
storage, including dry storage and storage in water by means of apparatus
preventing ice damage to the hull, maintenance, or repair; (ii) The actual
process of storage, maintenance, or repair of the boat or vessel; or (iii)
Storage for the purpose of selling the boat or vessel.
(47) Jewelry display product. From the sale and from
the storage, use, or other consumption in this state of tangible personal
property used to display any jewelry product; provided that title to the
jewelry display product is transferred by the jewelry manufacturer or seller
and that the jewelry display product is shipped out of state for use solely
outside the state and is not returned to the jewelry manufacturer or seller.
(48) Boats or vessels generally. Notwithstanding the
provisions of this chapter, the tax imposed by §§ 44-18-20 and
44-18-18 shall not apply with respect to the sale and to the storage, use, or
other consumption in this state of any new or used boat. The exemption provided
for in this subdivision does not apply after October 1, 1993, unless prior to
October 1, 1993, the federal ten percent (10%) surcharge on luxury boats is
repealed.
(49) Banks and regulated investment companies interstate
toll-free calls. Notwithstanding the provisions of this chapter, the tax
imposed by this chapter does not apply to the furnishing of interstate and
international, toll-free terminating telecommunication service that is used
directly and exclusively by or for the benefit of an eligible company as
defined in this subdivision; provided that an eligible company employs on
average during the calendar year no less than five hundred (500) "full-time
equivalent employees" as that term is defined in § 42-64.5-2. For purposes
of this section, an "eligible company" means a "regulated investment company"
as that term is defined in the Internal Revenue Code of 1986, 26 U.S.C. §
1 et seq., or a corporation to the extent the service is provided, directly or
indirectly, to or on behalf of a regulated investment company, an employee
benefit plan, a retirement plan or a pension plan or a state-chartered bank.
(50) Mobile and manufactured homes generally. From the
sale and from the storage, use, or other consumption in this state of mobile
and/or manufactured homes as defined and subject to taxation pursuant to the
provisions of chapter 44 of title 31.
(51) Manufacturing business reconstruction materials.
(i) From the sale and from the storage, use, or other
consumption in this state of lumber, hardware, and other building materials
used in the reconstruction of a manufacturing business facility that suffers a
disaster, as defined in this subdivision, in this state. "Disaster" means any
occurrence, natural or otherwise, that results in the destruction of sixty
percent (60%) or more of an operating manufacturing business facility within
this state. "Disaster" does not include any damage resulting from the willful
act of the owner of the manufacturing business facility.
(ii) Manufacturing business facility includes, but is not
limited to, the structures housing the production and administrative facilities.
(iii) In the event a manufacturer has more than one
manufacturing site in this state, the sixty percent (60%) provision applies to
the damages suffered at that one site.
(iv) To the extent that the costs of the reconstruction
materials are reimbursed by insurance, this exemption does not apply.
(52) Tangible personal property and supplies used in the
processing or preparation of floral products and floral arrangements. From
the sale, storage, use, or other consumption in this state of tangible personal
property or supplies purchased by florists, garden centers, or other like
producers or vendors of flowers, plants, floral products, and natural and
artificial floral arrangements that are ultimately sold with flowers, plants,
floral products, and natural and artificial floral arrangements or are
otherwise used in the decoration, fabrication, creation, processing, or
preparation of flowers, plants, floral products, or natural and artificial
floral arrangements, including descriptive labels, stickers, and cards affixed
to the flower, plant, floral product, or arrangement, artificial flowers, spray
materials, floral paint and tint, plant shine, flower food, insecticide and
fertilizers.
(53) Horse food products. From the sale and from the
storage, use, or other consumption in this state of horse food products
purchased by a person engaged in the business of the boarding of horses.
(54) Non-motorized recreational vehicles sold to
nonresidents.
(i) From the sale, subsequent to June 30, 2003, of a
non-motorized recreational vehicle to a bona fide nonresident of this state who
does not register the non-motorized recreational vehicle in this state, whether
the sale or delivery of the non-motorized recreational vehicle is made in this
state or at the place of residence of the nonresident; provided that a
non-motorized recreational vehicle sold to a bona fide nonresident whose state
of residence does not allow a like exemption to its nonresidents is not exempt
from the tax imposed under § 44-18-20; provided, further, that in that
event the bona fide nonresident pays a tax to Rhode Island on the sale at a
rate equal to the rate that would be imposed in his or her state of residence
not to exceed the rate that would have been imposed under § 44-18-20.
Notwithstanding any other provisions of law, a licensed, non-motorized
recreational vehicle dealer shall add and collect the tax required under this
subdivision and remit the tax to the tax administrator under the provisions of
chapters 18 and 19 of this title. Provided, that when a Rhode Island licensed,
non-motorized recreational vehicle dealer is required to add and collect the
sales and use tax on the sale of a non-motorized recreational vehicle to a bona
fide nonresident as provided in this section, the dealer in computing the tax
takes into consideration the law of the state of the nonresident as it relates
to the trade-in of motor vehicles.
(ii) The tax administrator, in addition to the provisions of
§§ 44-19-27 and 44-19-28, may require any licensed, non-motorized
recreational vehicle dealer to keep records of sales to bona fide nonresidents
as the tax administrator deems reasonably necessary to substantiate the
exemption provided in this subdivision, including the affidavit of a licensed,
non-motorized recreational vehicle dealer that the purchaser of the
non-motorized recreational vehicle was the holder of, and had in his or her
possession a valid out-of-state non-motorized recreational vehicle registration
or a valid out-of-state driver's license.
(iii) Any nonresident who registers a non-motorized
recreational vehicle in this state within ninety (90) days of the date of its
sale to him or her is deemed to have purchased the non-motorized recreational
vehicle for use, storage, or other consumption in this state, and is subject
to, and liable for, the use tax imposed under the provisions of § 44-18-20.
(iv) "Non-motorized recreational vehicle" means any portable
dwelling designed and constructed to be used as a temporary dwelling for
travel, camping, recreational, and vacation use that is eligible to be
registered for highway use, including, but not limited to, "pick-up coaches" or
"pick-up campers," "travel trailers," and "tent trailers" as those terms are
defined in chapter 1 of title 31.
(55) Sprinkler and fire alarm systems in existing
buildings. From the sale in this state of sprinkler and fire alarm systems;
emergency lighting and alarm systems; and the materials necessary and attendant
to the installation of those systems that are required in buildings and
occupancies existing therein in July 2003 in order to comply with any
additional requirements for such buildings arising directly from the enactment
of the Comprehensive Fire Safety Act of 2003 and that are not required by any
other provision of law or ordinance or regulation adopted pursuant to that Act.
The exemption provided in this subdivision shall expire on December 31, 2008.
(56) Aircraft. Notwithstanding the provisions of this
chapter, the tax imposed by §§ 44-18-18 and 44-18-20 shall not apply
with respect to the sale and to the storage, use, or other consumption in this
state of any new or used aircraft or aircraft parts.
(57) Renewable energy products. Notwithstanding any
other provisions of Rhode Island general laws, the following products shall
also be exempt from sales tax: solar photovoltaic modules or panels, or any
module or panel that generates electricity from light; solar thermal
collectors, including, but not limited to, those manufactured with flat glass
plates, extruded plastic, sheet metal, and/or evacuated tubes; geothermal heat
pumps, including both water-to-water and water-to-air type pumps; wind
turbines; towers used to mount wind turbines if specified by or sold by a wind
turbine manufacturer; DC to AC inverters that interconnect with utility power
lines; and manufactured mounting racks and ballast pans for solar collector,
module, or panel installation. Not to include materials that could be
fabricated into such racks; monitoring and control equipment, if specified or
supplied by a manufacturer of solar thermal, solar photovoltaic, geothermal, or
wind energy systems or if required by law or regulation for such systems but
not to include pumps, fans or plumbing or electrical fixtures unless shipped
from the manufacturer affixed to, or an integral part of, another item
specified on this list; and solar storage tanks that are part of a solar
domestic hot water system or a solar space heating system. If the tank comes
with an external heat exchanger it shall also be tax exempt, but a standard hot
water tank is not exempt from state sales tax.
(58) Returned property. The amount charged for
property returned by customers upon rescission of the contract of sale when the
entire amount exclusive of handling charges paid for the property is refunded
in either cash or credit, and where the property is returned within one hundred
twenty (120) days from the date of delivery.
(59) Dietary Supplements. From the sale and from the
storage, use, or other consumption of dietary supplements as defined in §
44-18-7.1(l)(v), sold on prescriptions.
(60) Blood. From the sale and from the storage, use,
or other consumption of human blood.
(61) Agricultural products for human consumption. From
the sale and from the storage, use, or other consumption of livestock and
poultry of the kinds of products that ordinarily constitute food for human
consumption and of livestock of the kind the products of which ordinarily
constitutes fibers for human use.
(62) Diesel emission control technology. From the sale
and use of diesel retrofit technology that is required by § 31-47.3-4.
(63) Feed for certain animals used in commercial
farming. From the sale of feed for animals as described in §
44-18-30(61).
(64) Alcoholic beverages. From the sale and storage,
use, or other consumption in this state by a Class A licensee of alcoholic
beverages, as defined in § 44-18-7.1, excluding beer and malt beverages;
provided, further, notwithstanding § 6-13-1 or any other general or public
law to the contrary, alcoholic beverages, as defined in § 44-18-7.1, shall
not be subject to minimum markup.
History of Section.
(P.L. 1947, ch. 1887, art. 2, § 31; P.L. 1948, ch. 2004, § 1; P.L.
1952, ch. 2902, § 1; G.L. 1956, § 44-18-30; P.L. 1956, ch. 3792,
§ 1; P.L. 1958, ch. 175, § 3; P.L. 1959, ch. 49, § 1; P.L. 1959,
ch. 77, § 1; P.L. 1961, ch. 130, § 1; P.L. 1964, ch. 117, § 1;
P.L. 1965, ch. 91, § 1; P.L. 1966, ch. 262, § 4; P.L. 1967, ch. 79,
§ 1; P.L. 1967, ch. 179, art. 2, § 8; P.L. 1968, ch. 263, art. 8,
§ 15; P.L. 1969, ch. 124, § 1; P.L. 1970, ch. 60, §§ 4, 5;
P.L. 1972, ch. 132, art. 4, § 1; P.L. 1974, ch. 200, art. 3, § 1;
P.L. 1974, ch. 286, § 2; P.L. 1975, ch. 8, § 1; P.L. 1975, ch. 75,
§ 2; P.L. 1975, ch. 218, § 1; P.L. 1976, ch. 133, § 1; P.L.
1976, ch. 268, § 1; P.L. 1977, ch. 182, § 16; P.L. 1977, ch. 200,
art. 4, § 1; P.L. 1978, ch. 225, § 1; P.L. 1979, ch. 385, § 1;
P.L. 1980, ch. 171, § 1; P.L. 1982, ch. 200, § 1; P.L. 1982, ch. 265,
§ 1; P.L. 1982, ch. 320, § 1; P.L. 1982, ch. 348, § 1; P.L.
1983, ch. 106, § 1; P.L. 1984, ch. 166, § 1; P.L. 1984, ch. 190,
§ 1; P.L. 1984, ch. 195, § 1; P.L. 1984, ch. 198, § 1; P.L.
1984, ch. 206, art. III, § 2; P.L. 1984, ch. 433, § 1; P.L. 1984
(s.s.), ch. 450, § 2; P.L. 1985, ch. 150, § 47; P.L. 1985, ch. 251,
§ 1; P.L. 1985, ch. 272, § 1; P.L. 1985, ch. 363, § 1; P.L.
1985, ch. 404, § 1; P.L. 1985, ch. 477, § 1; P.L. 1986, ch. 116,
§ 1; P.L. 1986, ch. 353, § 1; P.L. 1986, ch. 400, § 1; P.L.
1986, ch. 441, § 1; P.L. 1986, ch. 450, § 1; P.L. 1986, ch. 476,
§ 1; P.L. 1986, ch. 480, § 1; P.L. 1987, ch. 118, art. 26, § 1;
P.L. 1987, ch. 183, § 1; P.L. 1987, ch. 210, § 1; P.L. 1987, ch. 253,
§ 1; P.L. 1987, ch. 324, § 1; P.L. 1987, ch. 337, § 1; P.L.
1987, ch. 384, § 1; P.L. 1988, ch. 84, § 96; P.L. 1988, ch. 424,
§ 2; P.L. 1988, ch. 495, § 1; P.L. 1988, ch. 557, § 1; P.L.
1988, ch. 626, § 1; P.L. 1989, ch. 41, § 1; P.L. 1989, ch. 126, art.
44, § 1; P.L. 1989, ch. 434, § 1; P.L. 1990, ch. 65, art. 14, §
1; P.L. 1990, ch. 65, art. 15, § 1; P.L. 1990, ch. 213, § 1; P.L.
1991, c. 367, § 1; P.L. 1992, ch. 133, art. 51, § 1; P.L. 1993, ch.
69, § 1; P.L. 1993, ch. 138, art. 90, § 1; P.L. 1993, ch. 186, §
1; P.L. 1993, ch. 444, § 1; P.L. 1995, ch. 397, § 1; P.L. 1996, ch.
147 § 1; P.L. 1996, ch. 205 § 1; P.L. 1996, ch. 253, §§ 1,
2; P.L. 1996, ch. 254, § 1; P.L. 1996, ch. 259, § 1; P.L. 1996, ch.
319, § 2; P.L. 1997, ch. 168, § 4; P.L. 1998, ch. 54, § 2; P.L.
1998, ch. 109, § 1; P.L. 1998, ch. 111, § 2; P.L. 1998, ch. 407,
§ 1; P.L. 1999, ch. 163, § 1; P.L. 1999, ch. 489, § 1; P.L.
2000, ch. 109, § 48; P.L. 2000, ch. 316, § 1; P.L. 2000, ch. 488,
§ 1; P.L. 2002, ch. 337, § 1; P.L. 2002, ch. 404, § 4; P.L.
2002, ch. 406, § 1; P.L. 2003, ch. 389, § 1; P.L. 2003, ch. 397,
§ 1; P.L. 2003, ch. 421, § 1; P.L. 2004, ch. 165, § 1; P.L.
2004, ch. 239, § 1; P.L. 2004, ch. 339, § 1; P.L. 2004, ch. 394,
§ 1; P.L. 2005, ch. 281, § 2; P.L. 2005, ch. 305, § 2; P.L.
2006, ch. 246, art. 30, § 9; P.L. 2007, ch. 6, § 4; P.L. 2007, ch.
163, § 3; P.L. 2007, ch. 266, § 3; P.L. 2007, ch. 321, § 2; P.L.
2007, ch. 408, § 2; P.L. 2010, ch. 171, § 3; P.L. 2010, ch. 184,
§ 3; P.L. 2011, ch. 151, art. 19, § 24; P.L. 2012, ch. 241, art. 21,
§ 3; P.L. 2012, ch. 407, § 1; P.L. 2012, ch. 418, § 1; P.L.
2013, ch. 144, art. 9, § 3; P.L. 2014, ch. 145, art. 12, § 9; P.L.
2014, ch. 528, § 63; P.L. 2015, ch. 141, art. 11, § 7; P.L. 2015, ch.
255, § 1; P.L. 2015, ch. 276, § 1.)
