2023 -- S 0862
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LC001655
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
____________
A N A C T
RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION
Introduced By: Senator Tiara T. Mack
Date Introduced: March 30, 2023
Referred To: Senate Finance
It is enacted by the General Assembly as follows:
SECTION 1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property 1
Subject to Taxation" is hereby amended to read as follows: 2
44-3-3. Property exempt. 3
(a) The following property is exempt from taxation: 4
(1) Property belonging to the state, except as provided in § 44-4-4.1; 5
(2) Lands ceded or belonging to the United States; 6
(3) Bonds and other securities issued and exempted from taxation by the government of 7
the United States or of this state; 8
(4) Real estate, used exclusively for military purposes, owned by chartered or incorporated 9
organizations approved by the adjutant general and composed of members of the national guard, 10
the naval militia, or the independent, chartered-military organizations; 11
(5) Buildings for free public schools, buildings for religious worship, and the land upon 12
which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so 13
far as the buildings and land are occupied and used exclusively for religious or educational 14
purposes; 15
(6) Dwellings houses and the land on which they stand, not exceeding one acre in size, or 16
the minimum lot size for zone in which the dwelling house is located, whichever is the greater, 17
owned by, or held in trust for, any religious organization and actually used by its officiating clergy; 18
provided, further, that in the town of Charlestown, where the property previously described in this 19
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paragraph is exempt in total, along with dwelling houses and the land on which they stand in 1
Charlestown, not exceeding one acre in size, or the minimum lot size for zone in which the dwelling 2
house is located, whichever is the greater, owned by, or held in trust for, any religious organization 3
and actually used by its officiating clergy, or used as a convent, nunnery, or retreat center by its 4
religious order; 5
(7) Intangible personal property owned by, or held in trust for, any religious or charitable 6
organization, if the principal or income is used or appropriated for religious or charitable purposes; 7
(8) Buildings and personal estate owned by any corporation used for a school, academy, or 8
seminary of learning, and of any incorporated public charitable institution, and the land upon which 9
the buildings stand and immediately surrounding them to an extent not exceeding one acre, so far 10
as they are used exclusively for educational purposes, but no property or estate whatever is hereafter 11
exempt from taxation in any case where any part of its income or profits, or of the business carried 12
on there, is divided among its owners or stockholders; provided, however, that unless any private 13
nonprofit corporation organized as a college or university located in the town of Smithfield reaches 14
a memorandum of agreement with the town of Smithfield, the town of Smithfield shall bill the 15
actual costs for police, fire, and rescue services supplied, unless otherwise reimbursed, to said 16
corporation commencing March 1, 2014; 17
(9) Estates, persons, and families of the president and professors for the time being of 18
Brown University for not more than ten thousand dollars ($10,000) for each officer, the officer’s 19
estate, person, and family included, but only to the extent that any person had claimed and utilized 20
the exemption prior to, and for a period ending, either on or after December 31, 1996; 21
(10) Property especially exempt by charter unless the exemption has been waived in whole 22
or in part; 23
(11) Lots of land exclusively for burial grounds; 24
(12) Property, real and personal, held for, or by, an incorporated library, society, or any 25
free public library, or any free public library society, so far as the property is held exclusively for 26
library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor 27
generally, or for a nonprofit hospital for the sick or disabled; 28
(13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated 29
organizations of veterans of any war in which the United States has been engaged, the parent body 30
of which has been incorporated by act of Congress, to the extent of four hundred thousand dollars 31
($400,000) if actually used and occupied by the association; provided, that the city council of the 32
city of Cranston may by ordinance exempt the real or personal estate as previously described in 33
this subdivision located within the city of Cranston to the extent of five hundred thousand dollars 34
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($500,000); 1
(14) Property, real and personal, held for, or by, the fraternal corporation, association, or 2
body created to build and maintain a building or buildings for its meetings or the meetings of the 3
general assembly of its members, or subordinate bodies of the fraternity, and for the 4
accommodation of other fraternal bodies or associations, the entire net income of which real and 5
personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or 6
asylums, a home or homes, a school or schools, for the free education or relief of the members of 7
the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity, their 8
wives, widows, or orphans, and any fund given or held for the purpose of public education, 9
almshouses, and the land and buildings used in connection therewith; 10
(15) Real estate and personal property of any incorporated volunteer fire engine company 11
or incorporated volunteer ambulance or rescue corps in active service; 12
(16) The estate of any person who, in the judgment of the assessors, is unable from infirmity 13
or poverty to pay the tax; provided, that in the towns of Burrillville and West Greenwich, the tax 14
shall constitute a lien for five (5) years on the property where the owner is entitled to the exemption. 15
At the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold 16
or conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the 17
lien immediately becomes due and payable; any person claiming the exemption aggrieved by an 18
adverse decision of an assessor shall appeal the decision to the local board of tax review and 19
thereafter according to the provisions of § 44-5-26; 20
(17) Household furniture and family stores of a housekeeper in the whole, including 21
clothing, bedding, and other white goods, books, and all other tangible personal property items that 22
are common to the normal household; 23
(18) Improvements made to any real property to provide a shelter and fallout protection 24
from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided, that 25
the improvements meet applicable standards for shelter construction established, from time to time, 26
by the Rhode Island emergency management agency. The improvements are deemed to comply 27
with the provisions of any building code or ordinance with respect to the materials or the methods 28
of construction used and any shelter or its establishment is deemed to comply with the provisions 29
of any zoning code or ordinance; 30
(19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator; 31
(20) Manufacturer’s inventory. 32
(i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be 33
a manufacturer within a city or town within this state if that person uses any premises, room, or 34
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place in it primarily for the purpose of transforming raw materials into a finished product for trade 1
through any or all of the following operations: adapting, altering, finishing, making, and 2
ornamenting; provided, that public utilities; non-regulated power producers commencing 3
commercial operation by selling electricity at retail or taking title to generating facilities on or after 4
July 1, 1997; building and construction contractors; warehousing operations, including distribution 5
bases or outlets of out-of-state manufacturers; and fabricating processes incidental to warehousing 6
or distribution of raw materials, such as alteration of stock for the convenience of a customer; are 7
excluded from this definition; 8
(ii) For the purposes of this section and §§ 44-4-10 and 44-5-38, the term “manufacturer’s 9
inventory,” or any similar term, means and includes the manufacturer’s raw materials, the 10
manufacturer’s work in process, and finished products manufactured by the manufacturer in this 11
state, and not sold, leased, or traded by the manufacturer or its title or right to possession divested; 12
provided, that the term does not include any finished products held by the manufacturer in any retail 13
store or other similar selling place operated by the manufacturer whether or not the retail 14
establishment is located in the same building in which the manufacturer operates the manufacturing 15
plant; 16
(iii) For the purpose of § 44-11-2, a “manufacturer” is a person whose principal business 17
in this state consists of transforming raw materials into a finished product for trade through any or 18
all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be 19
principally engaged if the gross receipts that person derived from the manufacturing operations in 20
this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than 21
fifty percent (50%) of the total gross receipts that person derived from all the business activities in 22
which that person engaged in this state during the taxable year. For the purpose of computing the 23
percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished 24
products manufactured by the manufacturer in this state, even though the manufacturer’s store or 25
other selling place may be at a different location from the location of the manufacturer’s 26
manufacturing plant in this state, are deemed to have been derived from manufacturing; 27
(iv) Within the meaning of the preceding paragraphs of this subdivision, the term 28
“manufacturer” also includes persons who are principally engaged in any of the general activities 29
coded and listed as establishments engaged in manufacturing in the Standard Industrial 30
Classification Manual prepared by the Technical Committee on Industrial Classification, Office of 31
Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as 32
revised from time to time, but eliminating as manufacturers those persons, who, because of their 33
limited type of manufacturing activities, are classified in the manual as falling within the trade 34
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rather than an industrial classification of manufacturers. Among those thus eliminated, and 1
accordingly also excluded as manufacturers within the meaning of this paragraph, are persons 2
primarily engaged in selling, to the general public, products produced on the premises from which 3
they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and 4
custom tailors, except, that a person who manufactures bakery products for sale primarily for home 5
delivery, or through one or more non-baking retail outlets, and whether or not retail outlets are 6
operated by the person, is a manufacturer within the meaning of this paragraph; 7
(v) The term “Person” means and includes, as appropriate, a person, partnership, or 8
corporation; and 9
(vi) The department of revenue shall provide to the local assessors any assistance that is 10
necessary in determining the proper application of the definitions in this subdivision; 11
(21) Real and tangible personal property acquired to provide a treatment facility used 12
primarily to control the pollution or contamination of the waters or the air of the state, as defined 13
in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed, 14
reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or 15
standards for the control of water or air pollution or contamination, and certified as approved in an 16
order entered by the director of environmental management. The property is exempt as long as it is 17
operated properly in compliance with the order of approval of the director of environmental 18
management; provided, that any grant of the exemption by the director of environmental 19
management in excess of ten (10) years is approved by the city or town in which the property is 20
situated. This provision applies only to water and air pollution control properties and facilities 21
installed for the treatment of waste waters and air contaminants resulting from industrial 22
processing; furthermore, it applies only to water or air pollution control properties and facilities 23
placed in operation for the first time after April 13, 1970; 24
(22) Manufacturing machinery and equipment acquired or used by a manufacturer after 25
December 31, 1974. Manufacturing machinery and equipment is defined as: 26
(i) Machinery and equipment used exclusively in the actual manufacture or conversion of 27
raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision 28
(20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and 29
development or for quality assurance of its manufactured products; 30
(ii) Machinery and equipment that is partially used in the actual manufacture or conversion 31
of raw materials or goods in process of manufacture by a manufacturer, as defined in subdivision 32
(20), and machinery, fixtures, and equipment used by a manufacturer for research and development 33
or for quality assurance of its manufactured products, to the extent to which the machinery and 34
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equipment is used for the manufacturing processes, research and development, or quality assurance. 1
In the instances where machinery and equipment is used in both manufacturing and/or research and 2
development and/or quality assurance activities and non-manufacturing activities, the assessment 3
on machinery and equipment is prorated by applying the percentage of usage of the equipment for 4
the manufacturing, research and development, and quality-assurance activity to the value of the 5
machinery and equipment for purposes of taxation, and the portion of the value used for 6
manufacturing, research and development, and quality assurance is exempt from taxation. The 7
burden of demonstrating this percentage usage of machinery and equipment for manufacturing and 8
for research and development and/or quality assurance of its manufactured products rests with the 9
manufacturer; and 10
(iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was 11
purchased after July 1, 1997; provided that the city or town council of the city or town in which the 12
machinery and equipment is located adopts an ordinance exempting the machinery and equipment 13
from taxation. For purposes of this subsection, city councils and town councils of any municipality 14
may, by ordinance, wholly or partially exempt from taxation the machinery and equipment 15
discussed in this subsection for the period of time established in the ordinance and may, by 16
ordinance, establish the procedures for taxpayers to avail themselves of the benefit of any 17
exemption permitted under this section; provided, that the ordinance does not apply to any 18
machinery or equipment of a business, subsidiary, or any affiliated business that locates or relocates 19
from a city or town in this state to another city or town in the state; 20
(23) Precious metal bullion, meaning any elementary metal that has been put through a 21
process of melting or refining, and that is in a state or condition that its value depends upon its 22
content and not its form. The term does not include fabricated precious metal that has been 23
processed or manufactured for some one or more specific and customary industrial, professional, 24
or artistic uses; 25
(24) Hydroelectric power-generation equipment, which includes, but is not limited to, 26
turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers, 27
protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The 28
hydroelectric power-generation equipment must have been purchased after July 1, 1979, and 29
acquired or used by a person or corporation who or that owns or leases a dam and utilizes the 30
equipment to generate hydroelectric power; 31
(25) Subject to authorization by formal action of the council of any city or town, any real 32
or personal property owned by, held in trust for, or leased to an organization incorporated under 33
chapter 6 of title 7, as amended, or an organization meeting the definition of “charitable trust” set 34
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out in § 18-9-4, as amended, or an organization incorporated under the not-for-profits statutes of 1
another state or the District of Columbia, the purpose of which is the conserving of open space, as 2
that term is defined in chapter 36 of title 45, as amended, provided the property is used exclusively 3
for the purposes of the organization; 4
(26) Tangible personal property, the primary function of which is the recycling, reuse, or 5
recovery of materials (other than precious metals, as defined in § 44-18-30(24)(ii) and (iii)), from, 6
or the treatment of “hazardous wastes,” as defined in § 23-19.1-4, where the “hazardous wastes” 7
are generated primarily by the same taxpayer and where the personal property is located at, in, or 8
adjacent to a generating facility of the taxpayer. The taxpayer may, but need not, procure an order 9
from the director of the department of environmental management certifying that the tangible 10
personal property has this function, which order effects a conclusive presumption that the tangible 11
personal property qualifies for the exemption under this subdivision. If any information relating to 12
secret processes or methods of manufacture, production, or treatment is disclosed to the department 13
of environmental management only to procure an order, and is a “trade secret” as defined in § 28-14
21-10(b), it shall not be open to public inspection or publicly disclosed unless disclosure is 15
otherwise required under chapter 21 of title 28 or chapter 24.4 of title 23; 16
(27) Motorboats as defined in § 46-22-2 for which the annual fee required in § 46-22-4 has 17
been paid; 18
(28) Real and personal property of the Providence Performing Arts Center, a non-business 19
corporation as of December 31, 1986; 20
(29) Tangible personal property owned by, and used exclusively for the purposes of, any 21
religious organization located in the city of Cranston; 22
(30) Real and personal property of the Travelers Aid Society of Rhode Island, a nonprofit 23
corporation, the Union Mall Real Estate Corporation, and any limited partnership or limited liability 24
company that is formed in connection with, or to facilitate the acquisition of, the Providence YMCA 25
Building; 26
(31) Real and personal property of Meeting Street Center or MSC Realty, Inc., both not-27
for-profit Rhode Island corporations, and any other corporation, limited partnership, or limited 28
liability company that is formed in connection with, or to facilitate the acquisition of, the properties 29
designated as the Meeting Street National Center of Excellence on Eddy Street in Providence, 30
Rhode Island; 31
(32) The buildings, personal property, and land upon which the buildings stand, located on 32
Pomham Island, East Providence, currently identified as Assessor’s Map 211, Block 01, Parcel 33
001.00, that consists of approximately twenty-one thousand three hundred (21,300) square feet and 34
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is located approximately eight hundred sixty feet (860′), more or less, from the shore, and limited 1
exclusively to these said buildings, personal estate and land, provided that said property is owned 2
by a qualified 501(c)(3) organization, such as the American Lighthouse Foundation, and is used 3
exclusively for a lighthouse; 4
(33) The Stadium Theatre Performing Arts Centre building located in Monument Square, 5
Woonsocket, Rhode Island, so long as said Stadium Theatre Performing Arts Center is owned by 6
the Stadium Theatre Foundation, a Rhode Island nonprofit corporation; 7
(34) Real and tangible personal property of St. Mary Academy — Bay View, located in 8
East Providence, Rhode Island; 9
(35) Real and personal property of East Bay Community Action Program and its 10
predecessor, Self Help, Inc; provided, that the organization is qualified as a tax-exempt corporation 11
under § 501(c)(3) of the United States Internal Revenue Code; 12
(36) Real and personal property located within the city of East Providence of the Columbus 13
Club of East Providence, a Rhode Island charitable nonprofit corporation; 14
(37) Real and personal property located within the city of East Providence of the Columbus 15
Club of Barrington, a Rhode Island charitable nonprofit corporation; 16
(38) Real and personal property located within the city of East Providence of Lodge 2337 17
BPO Elks, a Rhode Island nonprofit corporation; 18
(39) Real and personal property located within the city of East Providence of the St. 19
Andrews Lodge No. 39, a Rhode Island charitable nonprofit corporation; 20
(40) Real and personal property located within the city of East Providence of the Trustees 21
of Methodist Health and Welfare service a/k/a United Methodist Elder Care, a Rhode Island 22
nonprofit corporation; 23
(41) Real and personal property located on the first floor of 90 Leonard Avenue within the 24
city of East Providence of the Zion Gospel Temple, Inc., a religious nonprofit corporation; 25
(42) Real and personal property located within the city of East Providence of the Cape 26
Verdean Museum Exhibit, a Rhode Island nonprofit corporation; 27
(43) The real and personal property owned by a qualified 501(c)(3) organization that is 28
affiliated and in good standing with a national, congressionally chartered organization and thereby 29
adheres to that organization’s standards and provides activities designed for recreational, 30
educational, and character building purposes for children from ages six (6) years to seventeen (17) 31
years; 32
(44) Real and personal property of the Rhode Island Philharmonic Orchestra and Music 33
School; provided, that the organization is qualified as a tax-exempt corporation under § 501(c)(3) 34
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of the United States Internal Revenue Code; 1
(45) The real and personal property located within the town of West Warwick at 211 2
Cowesett Avenue, Plat 29-Lot 25, which consists of approximately twenty-eight thousand seven 3
hundred fifty (28,750) square feet and is owned by the Station Fire Memorial Foundation of East 4
Greenwich, a Rhode Island nonprofit corporation; 5
(46) Real and personal property of the Comprehensive Community Action Program, a 6
qualified tax-exempt corporation under § 501(c)(3) of the United States Internal Revenue Code; 7
(47) Real and personal property located at 52 Plain Street, within the city of Pawtucket of 8
the Pawtucket Youth Soccer Association, a Rhode Island nonprofit corporation; 9
(48) Renewable energy resources, as defined in § 39-26-5, used in residential systems and 10
associated equipment used therewith in service after December 31, 2015; 11
(49) Renewable energy resources, as defined in § 39-26-5, if employed by a manufacturer, 12
as defined in subsection (a) of this section, shall be exempt from taxation in accordance with 13
subsection (a) of this section; 14
(50) Real and personal property located at 415 Tower Hill Road within the town of North 15
Kingstown, of South County Community Action, Inc., a qualified tax-exempt corporation under § 16
501(c)(3) of the United States Internal Revenue Code; 17
(51) As an effort to promote business growth, tangible business or personal property, in 18
whole or in part, within the town of Charlestown’s community limits, subject to authorization by 19
formal action of the town council of the town of Charlestown; 20
(52) All real and personal property located at 1300 Frenchtown Road, within the town of 21
East Greenwich, identified as assessor’s map 027, plat 019, lot 071, and known as the New England 22
Wireless and Steam Museum, Inc., a qualified tax-exempt corporation under § 501(c)(3) of the 23
United States Internal Revenue Code; 24
(53) Real and tangible personal property of Mount Saint Charles Academy located within 25
the city of Woonsocket, specifically identified as the following assessor’s plats and lots: Logee 26
Street, plat 23, lot 62, Logee Street, plat 24, lots 304 and 305; Welles Street, plat 23, lot 310; 27
Monroe Street, plat 23, lot 312; and Roberge Avenue, plat 24, lot 47; 28
(54) Real and tangible personal property of Steere House, a Rhode Island nonprofit 29
corporation, located in Providence, Rhode Island; 30
(55) Real and personal property located within the town of West Warwick of Tides Family 31
Services, Inc., a Rhode Island nonprofit corporation; 32
(56) Real and personal property of Tides Family Services, Inc., a Rhode Island nonprofit 33
corporation, located in the city of Pawtucket at 242 Dexter Street, plat 44, lot 444; 34
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(57) Real and personal property located within the town of Middletown of Lucy’s Hearth, 1
a Rhode Island nonprofit corporation; 2
(58) Real and tangible personal property of Habitat for Humanity of Rhode Island—3
Greater Providence, Inc., a Rhode Island nonprofit corporation, located in Providence, Rhode 4
Island; 5
(59) Real and personal property of the Artic Playhouse, a Rhode Island nonprofit 6
corporation, located in the town of West Warwick at 1249 Main Street; 7
(60) Real and personal property located at 321 Main Street, within the town of South 8
Kingstown, of the Contemporary Theatre Company, a qualified, tax-exempt corporation under § 9
501(c)(3) of the United States Internal Revenue Code; 10
(61) Real and personal property of The Samaritans, Inc., a Rhode Island nonprofit § 11
501(c)(3) corporation located at 67 Park Place, Pawtucket, Rhode Island, to the extent the city 12
council of Pawtucket may from time to time determine; 13
(62) Real and personal property of North Kingstown, Exeter Animal Protection League, 14
Inc., dba “Pet Refuge,” 500 Stony Lane, a Rhode Island nonprofit corporation, located in North 15
Kingstown, Rhode Island; 16
(63) Real and personal property located within the city of East Providence of Foster 17
Forward (formerly the Rhode Island Foster Parents Association), a Rhode Island charitable 18
nonprofit corporation; 19
(64) Real and personal property located at 54 Kelly Avenue within the town of East 20
Providence, of the Associated Radio Amateurs of Southern New England, a Rhode Island nonprofit 21
corporation; 22
(65) Real and tangible personal property of Providence Country Day School, a Rhode 23
Island nonprofit corporation, located in East Providence, Rhode Island and further identified as plat 24
406, block 6, lot 6, and plat 506, block 1, lot 8; 25
(66) As an effort to promote business growth, tangible business or personal property, in 26
whole or in part, within the town of Bristol’s community limits, subject to authorization by formal 27
action of the town council of the town of Bristol; 28
(67) Real and tangible personal property of the Heritage Harbor Foundation, a Rhode 29
Island nonprofit corporation, located at 1445 Wampanoag Trail, Suites 103 and 201, within the city 30
of East Providence; 31
(68) Real property of Ocean State Community Wellness, Inc., a qualified tax-exempt 32
corporation under § 501(c)(3) of the United States Internal Revenue Code, located in North 33
Kingstown, Rhode Island, with a physical address of 7450 Post Road, and further identified as plat 34
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108, lot 83; 1
(69) Real and tangible personal property of St. John Baptist De La Salle Institute, d/b/a La 2
Salle Academy, a Rhode Island domestic nonprofit corporation, located in Providence, Rhode 3
Island denominated at the time this subsection was adopted as Plat 83 Lot 276 by the tax assessor 4
for the city of Providence comprising approximately 26.08 acres of land along with all buildings 5
and improvements that have been or may be made; 6
(70) Real and tangible personal property of The Providence Community Health Centers, 7
Inc., a Rhode Island domestic nonprofit corporation, located in Providence, Rhode Island; 8
(71) In the city of Central Falls and the city of Pawtucket, real property and tangible 9
personal property located on or in the premise acquired or leased by a railroad entity and for the 10
purpose of providing boarding and disembarking of railroad passengers and the supporting 11
passenger railroad operations and services. For the purpose of this section, a railroad entity shall be 12
any incorporated entity that has been duly authorized by the Rhode Island public utilities 13
commission to provide passenger railroad services; 14
(72) Real and tangible personal property of the American Legion Riverside Post Holding 15
Company, d/b/a American Legion Post 10, a Rhode Island nonprofit corporation, located at 830 16
Willet Avenue, within the city of East Providence on Map 513, Block 27, Parcel 001.00 as long as 17
said property is owned by American Legion Post 10; 18
(73) Real and tangible personal property of the Holy Rosary Band Society, a Rhode Island 19
nonprofit corporation, located at 328 Taunton Avenue, within the city of East Providence on Map 20
306, Block 01, Parcel 012.00; 21
(74) Real and tangible personal property of Foster Forward, a Rhode Island domestic 22
nonprofit corporation, located within the city of Pawtucket, at 16 North Bend Street, and further 23
identified as assessor’s plat 21, lot 312; 24
(75) Real and tangible personal property of the Old and Ancient Rowers Society of Rhode 25
Island, a Rhode Island domestic nonprofit corporation, located at 166 Walmsley Lane, within the 26
town of North Kingstown on Plat 004/Lot 019; 27
(76) Real and tangible personal property of the Rhode Island Public Health Foundation, a 28
domestic nonprofit corporation or any other entity formed by the Rhode Island Public Health 29
Foundation in connection with, or to facilitate the acquisition of, one property to be owned by the 30
Rhode Island Public Health Foundation or such entity, located in the city of Providence; 31
(77) Real and tangible personal property of the Manissean Tribal Council, a Rhode Island 32
nonprofit corporation, located in the town of New Shoreham, Rhode Island; 33
(78) Real and tangible personal property of Sophia Academy located at 582 Elmwood 34
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Avenue, the San Miguel Education Center located at 525 Branch Avenue, and the Community 1
Preparatory School, Inc. located at 135 Prairie Avenue, all of which are domestic nonprofit 2
corporations, and all of which are located within the city of Providence; and 3
(79) Real and tangible personal property of Cape Verdean Museum Exhibit, a Rhode Island 4
domestic nonprofit corporation, located at 617 Prospect Street, within the city of Pawtucket on 5
Assessors’ Plat 37, Lot 434.; and 6
(80) Real and tangible personal property of urban and small farmers. 7
(i) For purposes of this subsection: 8
(A) An “urban farmer” is a taxpayer that produces or grows food in a city or other heavily 9
populated areas; and 10
(B) A “small farmer” is a taxpayer that farms agricultural land up to five (5) acres. 11
(b) Except as provided below, when a city or town taxes a for-profit hospital facility, the 12
value of its real property shall be the value determined by the most recent full revaluation or 13
statistical property update performed by the city or town; provided, however, in the year a nonprofit 14
hospital facility converts to or otherwise becomes a for-profit hospital facility, or a for-profit 15
hospital facility is initially established, the value of the real property and personal property of the 16
for-profit hospital facility shall be determined by a valuation performed by the assessor for the 17
purpose of determining an initial assessed value of real and personal property, not previously taxed 18
by the city or town, as of the most recent date of assessment pursuant to § 44-5-1, subject to a right 19
of appeal by the for-profit hospital facility which shall be made to the city or town tax assessor with 20
a direct appeal from an adverse decision to the Rhode Island superior court business calendar. 21
A “for-profit hospital facility” includes all real and personal property affiliated with any 22
hospital as identified in an application filed pursuant to chapter 17 or 17.14 of title 23. 23
Notwithstanding the above, a city or town may enter into a stabilization agreement with a for-profit 24
hospital facility under § 44-3-9 or other laws specific to the particular city or town relating to 25
stabilization agreements. In a year in which a nonprofit hospital facility converts to, or otherwise 26
becomes, a for-profit hospital facility, or a for-profit hospital facility is otherwise established, in 27
that year only the amount levied by the city or town and/or the amount payable under the 28
stabilization agreement for that year related to the for-profit hospital facility shall not be counted 29
towards determining the maximum tax levy permitted under § 44-5-2. 30
(c) Notwithstanding any other provision of law to the contrary, in an effort to provide relief 31
for businesses, including small businesses, and to promote economic development, a city, town, or 32
fire district may establish an exemption for tangible personal property within its geographic limits 33
by formal action of the appropriate governing body within the city, town, or fire district, which 34
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exemptions shall be uniformly applied and in compliance with local tax classification requirements. 1
Exemptions established pursuant to this subsection shall conform to the requirements of § 44-5-2
12.2. 3
SECTION 2. Section 44-11-11 of the General Laws in Chapter 44-11 entitled "Business 4
Corporation Tax" is hereby amended to read as follows: 5
44-11-11. “Net income” defined. 6
(a)(1) “Net income” means, for any taxable year and for any corporate taxpayer, the taxable 7
income of the taxpayer for that taxable year under the laws of the United States, plus: 8
(i) Any interest not included in the taxable income; 9
(ii) Any specific exemptions; 10
(iii) The tax imposed by this chapter; 11
(iv) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck 12
Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus 13
Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or 14
any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount 15
of the loan forgiven exceeds $250,000; and minus: 16
(v) Interest on obligations of the United States or its possessions, and other interest exempt 17
from taxation by this state; and 18
(vi) The federal net operating loss deduction.; and 19
(vii) Income from the production of food by urban and small farmers. 20
(A) For purposes of this subsection: 21
(I) An “urban farmer” is a taxpayer that produces or grows food in a city or other heavily 22
populated areas; and 23
(II) A “small farmer” is a taxpayer that farms agricultural land up to five (5) acres. 24
(2) All binding federal elections made by or on behalf of the taxpayer applicable either 25
directly or indirectly to the determination of taxable income shall be binding on the taxpayer except 26
where this chapter or its attendant regulations specifically modify or provide otherwise. Rhode 27
Island taxable income shall not include the “gross-up of dividends” required by the federal Internal 28
Revenue Code to be taken into taxable income in connection with the taxpayer’s election of the 29
foreign tax credit. 30
(b) A net operating loss deduction shall be allowed, which shall be the same as the net 31
operating loss deduction allowed under 26 U.S.C. § 172, except that: 32
(1) Any net operating loss included in determining the deduction shall be adjusted to reflect 33
the inclusions and exclusions from entire net income required by subsection (a) of this section and 34
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§ 44-11-11.1; 1
(2) The deduction shall not include any net operating loss sustained during any taxable year 2
in which the taxpayer was not subject to the tax imposed by this chapter; and 3
(3) The deduction shall not exceed the deduction for the taxable year allowable under 26 4
U.S.C. § 172; provided, that the deduction for a taxable year may not be carried back to any other 5
taxable year for Rhode Island purposes but shall only be allowable on a carry forward basis for the 6
five (5) succeeding taxable years. 7
(c) “Domestic international sales corporations” (referred to as DISCs), for the purposes of 8
this chapter, will be treated as they are under federal income tax law and shall not pay the amount 9
of the tax computed under § 44-11-2(a). Any income to shareholders of DISCs is to be treated in 10
the same manner as it is treated under federal income tax law as it exists on December 31, 1984. 11
(d) A corporation that qualifies as a “foreign sales corporation” (FSC) under the provisions 12
of subchapter N, 26 U.S.C. § 861 et seq., and that has in effect for the entire taxable year a valid 13
election under federal law to be treated as a FSC, shall not pay the amount of the tax computed 14
under § 44-11-2(a). Any income to shareholders of FSCs is to be treated in the same manner as it 15
is treated under federal income tax law as it exists on January 1, 1985. 16
(e) For purposes of a corporation’s state tax liability, any deduction to income allowable 17
under 26 U.S.C. § 1400Z-2(c) may be claimed in the case of any investment held by the taxpayer 18
for at least seven years. The division of taxation shall promulgate, in its discretion, rules and 19
regulations relative to the accelerated application of deductions under 26 U.S.C. § 1400Z-2(c). 20
SECTION 3. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and 21
Use Taxes — Liability and Computation" is hereby amended to read as follows: 22
44-18-30. Gross receipts exempt from sales and use taxes. 23
There are exempted from the taxes imposed by this chapter the following gross receipts: 24
(1) Sales and uses beyond constitutional power of state. From the sale and from the storage, 25
use, or other consumption in this state of tangible personal property the gross receipts from the sale 26
of which, or the storage, use, or other consumption of which, this state is prohibited from taxing 27
under the Constitution of the United States or under the constitution of this state. 28
(2) Newspapers. 29
(i) From the sale and from the storage, use, or other consumption in this state of any 30
newspaper. 31
(ii) “Newspaper” means an unbound publication printed on newsprint that contains news, 32
editorial comment, opinions, features, advertising matter, and other matters of public interest. 33
(iii) “Newspaper” does not include a magazine, handbill, circular, flyer, sales catalog, or 34
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similar item unless the item is printed for, and distributed as, a part of a newspaper. 1
(3) School meals. From the sale and from the storage, use, or other consumption in this 2
state of meals served by public, private, or parochial schools, school districts, colleges, universities, 3
student organizations, and parent-teacher associations to the students or teachers of a school, 4
college, or university whether the meals are served by the educational institutions or by a food 5
service or management entity under contract to the educational institutions. 6
(4) Containers. 7
(i) From the sale and from the storage, use, or other consumption in this state of: 8
(A) Non-returnable containers, including boxes, paper bags, and wrapping materials that 9
are biodegradable and all bags and wrapping materials utilized in the medical and healing arts, 10
when sold without the contents to persons who place the contents in the container and sell the 11
contents with the container. 12
(B) Containers when sold with the contents if the sale price of the contents is not required 13
to be included in the measure of the taxes imposed by this chapter. 14
(C) Returnable containers when sold with the contents in connection with a retail sale of 15
the contents or when resold for refilling. 16
(D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage 17
producers who place the alcoholic beverages in the containers. 18
(ii) As used in this subdivision, the term “returnable containers” means containers of a kind 19
customarily returned by the buyer of the contents for reuse. All other containers are “non-returnable 20
containers.” 21
(5)(i) Charitable, educational, and religious organizations. From the sale to, as in defined 22
in this section, and from the storage, use, and other consumption in this state, or any other state of 23
the United States of America, of tangible personal property by hospitals not operated for a profit; 24
“educational institutions” as defined in subdivision (18) not operated for a profit; churches, 25
orphanages, and other institutions or organizations operated exclusively for religious or charitable 26
purposes; interest-free loan associations not operated for profit; nonprofit, organized sporting 27
leagues and associations and bands for boys and girls under the age of nineteen (19) years; the 28
following vocational student organizations that are state chapters of national vocational student 29
organizations: Distributive Education Clubs of America (DECA); Future Business Leaders of 30
America, Phi Beta Lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers 31
of America/Home Economics Related Occupations (FHA/HERD); Vocational Industrial Clubs of 32
America (VICA); organized nonprofit golden age and senior citizens clubs for men and women; 33
and parent-teacher associations; and from the sale, storage, use, and other consumption in this state, 34
LC001655 - Page 16 of 39
of and by the Industrial Foundation of Burrillville, a Rhode Island domestic nonprofit corporation. 1
(ii) In the case of contracts entered into with the federal government, its agencies, or 2
instrumentalities, this state, or any other state of the United States of America, its agencies, any 3
city, town, district, or other political subdivision of the states; hospitals not operated for profit; 4
educational institutions not operated for profit; churches, orphanages, and other institutions or 5
organizations operated exclusively for religious or charitable purposes, the contractor may purchase 6
such materials and supplies (materials and/or supplies are defined as those that are essential to the 7
project) that are to be utilized in the construction of the projects being performed under the contracts 8
without payment of the tax. 9
(iii) The contractor shall not charge any sales or use tax to any exempt agency, institution, 10
or organization but shall in that instance provide his or her suppliers with certificates in the form 11
as determined by the division of taxation showing the reason for exemption and the contractor’s 12
records must substantiate the claim for exemption by showing the disposition of all property so 13
purchased. If any property is then used for a nonexempt purpose, the contractor must pay the tax 14
on the property used. 15
(6) Gasoline. From the sale and from the storage, use, or other consumption in this state 16
of: (i) Gasoline and other products taxed under chapter 36 of title 31 and (ii) Fuels used for the 17
propulsion of airplanes. 18
(7) Purchase for manufacturing purposes. 19
(i) From the sale and from the storage, use, or other consumption in this state of computer 20
software, tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration, and 21
water, when the property or service is purchased for the purpose of being manufactured into a 22
finished product for resale and becomes an ingredient, component, or integral part of the 23
manufactured, compounded, processed, assembled, or prepared product, or if the property or 24
service is consumed in the process of manufacturing for resale computer software, tangible personal 25
property, electricity, natural gas, artificial gas, steam, refrigeration, or water. 26
(ii) “Consumed” means destroyed, used up, or worn out to the degree or extent that the 27
property cannot be repaired, reconditioned, or rendered fit for further manufacturing use. 28
(iii) “Consumed” includes mere obsolescence. 29
(iv) “Manufacturing” means and includes: manufacturing, compounding, processing, 30
assembling, preparing, or producing. 31
(v) “Process of manufacturing” means and includes all production operations performed in 32
the producing or processing room, shop, or plant, insofar as the operations are a part of and 33
connected with the manufacturing for resale of tangible personal property, electricity, natural gas, 34
LC001655 - Page 17 of 39
artificial gas, steam, refrigeration, or water and all production operations performed insofar as the 1
operations are a part of and connected with the manufacturing for resale of computer software. 2
(vi) “Process of manufacturing” does not mean or include administration operations such 3
as general office operations, accounting, collection, or sales promotion, nor does it mean or include 4
distribution operations that occur subsequent to production operations, such as handling, storing, 5
selling, and transporting the manufactured products, even though the administration and 6
distribution operations are performed by, or in connection with, a manufacturing business. 7
(8) State and political subdivisions. From the sale to, and from the storage, use, or other 8
consumption by, this state, any city, town, district, or other political subdivision of this state. Every 9
redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a subdivision of 10
the municipality where it is located. 11
(9) Food and food ingredients. From the sale and storage, use, or other consumption in this 12
state of food and food ingredients as defined in § 44-18-7.1(l). 13
For the purposes of this exemption “food and food ingredients” shall not include candy, 14
soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending 15
machines, or prepared food, as those terms are defined in § 44-18-7.1, unless the prepared food is: 16
(i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311, 17
except sub-sector 3118 (bakeries); 18
(ii) Sold in an unheated state by weight or volume as a single item; 19
(iii) Bakery items, including: bread, rolls, buns, biscuits, bagels, croissants, pastries, 20
donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and 21
is not sold with utensils provided by the seller, including: plates, knives, forks, spoons, 22
glasses, cups, napkins, or straws. 23
(10) Medicines, drugs, and durable medical equipment. From the sale and from the storage, 24
use, or other consumption in this state, of: 25
(i) “Drugs” as defined in § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and 26
insulin whether or not sold on prescription. For purposes of this exemption drugs shall not include 27
over-the-counter drugs and grooming and hygiene products as defined in § 44-18-7.1(h)(iii). 28
(ii) Durable medical equipment as defined in § 44-18-7.1(k) for home use only, including, 29
but not limited to: syringe infusers, ambulatory drug delivery pumps, hospital beds, convalescent 30
chairs, and chair lifts. Supplies used in connection with syringe infusers and ambulatory drug 31
delivery pumps that are sold on prescription to individuals to be used by them to dispense or 32
administer prescription drugs, and related ancillary dressings and supplies used to dispense or 33
administer prescription drugs, shall also be exempt from tax. 34
LC001655 - Page 18 of 39
(11) Prosthetic devices and mobility enhancing equipment. From the sale and from the 1
storage, use, or other consumption in this state, of prosthetic devices as defined in § 44-18-7.1(t), 2
sold on prescription, including, but not limited to: artificial limbs, dentures, spectacles, eyeglasses, 3
and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on prescription; 4
and mobility enhancing equipment as defined in § 44-18-7.1(p), including wheelchairs, crutches, 5
and canes. 6
(12) Coffins, caskets, urns, shrouds and burial garments. From the sale and from the 7
storage, use, or other consumption in this state of coffins, caskets, burial containers, urns, urn liners, 8
urn vaults, grave liners, grave vaults, burial tent setups, prayer cards, shrouds, and other burial 9
garments that are ordinarily sold by a funeral director as part of the business of funeral directing. 10
(13) Motor vehicles sold to nonresidents. 11
(i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide nonresident 12
of this state who does not register the motor vehicle in this state, whether the sale or delivery of the 13
motor vehicle is made in this state or at the place of residence of the nonresident. A motor vehicle 14
sold to a bona fide nonresident whose state of residence does not allow a like exemption to its 15
nonresidents is not exempt from the tax imposed under § 44-18-20. In that event, the bona fide 16
nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that would be imposed 17
in his or her state of residence not to exceed the rate that would have been imposed under § 44-18-18
20. Notwithstanding any other provisions of law, a licensed motor vehicle dealer shall add and 19
collect the tax required under this subdivision and remit the tax to the tax administrator under the 20
provisions of chapters 18 and 19 of this title. When a Rhode Island licensed, motor vehicle dealer 21
is required to add and collect the sales and use tax on the sale of a motor vehicle to a bona fide 22
nonresident as provided in this section, the dealer in computing the tax takes into consideration the 23
law of the state of the nonresident as it relates to the trade-in of motor vehicles. 24
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may 25
require any licensed motor vehicle dealer to keep records of sales to bona fide nonresidents as the 26
tax administrator deems reasonably necessary to substantiate the exemption provided in this 27
subdivision, including the affidavit of a licensed motor vehicle dealer that the purchaser of the 28
motor vehicle was the holder of, and had in his or her possession a valid out-of-state motor vehicle 29
registration or a valid out-of-state driver’s license. 30
(iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days of 31
the date of its sale to him or her is deemed to have purchased the motor vehicle for use, storage, or 32
other consumption in this state, and is subject to, and liable for, the use tax imposed under the 33
provisions of § 44-18-20. 34
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(14) Sales in public buildings by blind people. From the sale and from the storage, use, or 1
other consumption in all public buildings in this state of all products or wares by any person 2
licensed under § 40-9-11.1. 3
(15) Air and water pollution control facilities. From the sale, storage, use, or other 4
consumption in this state of tangible personal property or supplies acquired for incorporation into 5
or used and consumed in the operation of a facility, the primary purpose of which is to aid in the 6
control of the pollution or contamination of the waters or air of the state, as defined in chapter 12 7
of title 46 and chapter 23 of title 23, respectively, and that has been certified as approved for that 8
purpose by the director of environmental management. The director of environmental management 9
may certify to a portion of the tangible personal property or supplies acquired for incorporation 10
into those facilities or used and consumed in the operation of those facilities to the extent that that 11
portion has as its primary purpose the control of the pollution or contamination of the waters or air 12
of this state. As used in this subdivision, “facility” means any land, facility, device, building, 13
machinery, or equipment. 14
(16) Camps. From the rental charged for living quarters, or sleeping, or housekeeping 15
accommodations at camps or retreat houses operated by religious, charitable, educational, or other 16
organizations and associations mentioned in subsection (5), or by privately owned and operated 17
summer camps for children. 18
(17) Certain institutions. From the rental charged for living or sleeping quarters in an 19
institution licensed by the state for the hospitalization, custodial, or nursing care of human beings. 20
(18) Educational institutions. From the rental charged by any educational institution for 21
living quarters, or sleeping, or housekeeping accommodations or other rooms or accommodations 22
to any student or teacher necessitated by attendance at an educational institution. “Educational 23
institution” as used in this section means an institution of learning not operated for profit that is 24
empowered to confer diplomas, educational, literary, or academic degrees; that has a regular 25
faculty, curriculum, and organized body of pupils or students in attendance throughout the usual 26
school year; that keeps and furnishes to students and others records required and accepted for 27
entrance to schools of secondary, collegiate, or graduate rank; and no part of the net earnings of 28
which inures to the benefit of any individual. 29
(19) Motor vehicle and adaptive equipment for persons with disabilities. 30
(i) From the sale of: (A) Special adaptations; (B) The component parts of the special 31
adaptations; or (C) A specially adapted motor vehicle; provided that the owner furnishes to the tax 32
administrator an affidavit of a licensed physician to the effect that the specially adapted motor 33
vehicle is necessary to transport a family member with a disability or where the vehicle has been 34
LC001655 - Page 20 of 39
specially adapted to meet the specific needs of the person with a disability. This exemption applies 1
to not more than one motor vehicle owned and registered for personal, noncommercial use. 2
(ii) For the purpose of this subsection the term “special adaptations” includes, but is not 3
limited to: wheelchair lifts, wheelchair carriers, wheelchair ramps, wheelchair securements, hand 4
controls, steering devices, extensions, relocations, and crossovers of operator controls, power-5
assisted controls, raised tops or dropped floors, raised entry doors, or alternative signaling devices 6
to auditory signals. 7
(iii) From the sale of: (a) Special adaptations, (b) The component parts of the special 8
adaptations, for a “wheelchair accessible taxicab” as defined in § 39-14-1, and/or a “wheelchair 9
accessible public motor vehicle” as defined in § 39-14.1-1. 10
(iv) For the purpose of this subdivision the exemption for a “specially adapted motor 11
vehicle” means a use tax credit not to exceed the amount of use tax that would otherwise be due on 12
the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the special 13
adaptations, including installation. 14
(20) Heating fuels. From the sale and from the storage, use, or other consumption in this 15
state of every type of heating fuel. 16
(21) Electricity and gas. From the sale and from the storage, use, or other consumption in 17
this state of electricity and gas. 18
(22) Manufacturing machinery and equipment. 19
(i) From the sale and from the storage, use, or other consumption in this state of tools, dies, 20
molds, machinery, equipment (including replacement parts), and related items to the extent used in 21
an industrial plant in connection with the actual manufacture, conversion, or processing of tangible 22
personal property, or to the extent used in connection with the actual manufacture, conversion, or 23
processing of computer software as that term is utilized in industry numbers 7371, 7372, and 7373 24
in the standard industrial classification manual prepared by the Technical Committee on Industrial 25
Classification, Office of Statistical Standards, Executive Office of the President, United States 26
Bureau of the Budget, as revised from time to time, to be sold, or that machinery and equipment 27
used in the furnishing of power to an industrial manufacturing plant. For the purposes of this 28
subdivision, “industrial plant” means a factory at a fixed location primarily engaged in the 29
manufacture, conversion, or processing of tangible personal property to be sold in the regular 30
course of business; 31
(ii) Machinery and equipment and related items are not deemed to be used in connection 32
with the actual manufacture, conversion, or processing of tangible personal property, or in 33
connection with the actual manufacture, conversion, or processing of computer software as that 34
LC001655 - Page 21 of 39
term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification 1
manual prepared by the Technical Committee on Industrial Classification, Office of Statistical 2
Standards, Executive Office of the President, United States Bureau of the Budget, as revised from 3
time to time, to be sold to the extent the property is used in administration or distribution operations; 4
(iii) Machinery and equipment and related items used in connection with the actual 5
manufacture, conversion, or processing of any computer software or any tangible personal property 6
that is not to be sold and that would be exempt under subdivision (7) or this subdivision if purchased 7
from a vendor or machinery and equipment and related items used during any manufacturing, 8
converting, or processing function is exempt under this subdivision even if that operation, function, 9
or purpose is not an integral or essential part of a continuous production flow or manufacturing 10
process; 11
(iv) Where a portion of a group of portable or mobile machinery is used in connection with 12
the actual manufacture, conversion, or processing of computer software or tangible personal 13
property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under 14
this subdivision even though the machinery in that group is used interchangeably and not otherwise 15
identifiable as to use. 16
(23) Trade-in value of motor vehicles. From the sale and from the storage, use, or other 17
consumption in this state of so much of the purchase price paid for a new or used automobile as is 18
allocated for a trade-in allowance on the automobile of the buyer given in trade to the seller, or of 19
the proceeds applicable only to the automobile as are received from the manufacturer of 20
automobiles for the repurchase of the automobile whether the repurchase was voluntary or not 21
towards the purchase of a new or used automobile by the buyer. For the purpose of this subdivision, 22
the word “automobile” means a private passenger automobile not used for hire and does not refer 23
to any other type of motor vehicle. 24
(24) Precious metal bullion. 25
(i) From the sale and from the storage, use, or other consumption in this state of precious 26
metal bullion, substantially equivalent to a transaction in securities or commodities. 27
(ii) For purposes of this subdivision, “precious metal bullion” means any elementary 28
precious metal that has been put through a process of smelting or refining, including, but not limited 29
to: gold, silver, platinum, rhodium, and chromium, and that is in a state or condition that its value 30
depends upon its content and not upon its form. 31
(iii) The term does not include fabricated precious metal that has been processed or 32
manufactured for some one or more specific and customary industrial, professional, or artistic uses. 33
(25) Commercial vessels. From sales made to a commercial ship, barge, or other vessel of 34
LC001655 - Page 22 of 39
fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from the 1
repair, alteration, or conversion of the vessels, and from the sale of property purchased for the use 2
of the vessels including provisions, supplies, and material for the maintenance and/or repair of the 3
vessels. 4
(26) Commercial fishing vessels. From the sale and from the storage, use, or other 5
consumption in this state of vessels and other watercraft that are in excess of five (5) net tons and 6
that are used exclusively for “commercial fishing,” as defined in this subdivision, and from the 7
repair, alteration, or conversion of those vessels and other watercraft, and from the sale of property 8
purchased for the use of those vessels and other watercraft including provisions, supplies, and 9
material for the maintenance and/or repair of the vessels and other watercraft and the boats nets, 10
cables, tackle, and other fishing equipment appurtenant to or used in connection with the 11
commercial fishing of the vessels and other watercraft. “Commercial fishing” means taking or 12
attempting to take any fish, shellfish, crustacea, or bait species with the intent of disposing of it for 13
profit or by sale, barter, trade, or in commercial channels. The term does not include subsistence 14
fishing, i.e., the taking for personal use and not for sale or barter; or sport fishing; but shall include 15
vessels and other watercraft with a Rhode Island party and charter boat license issued by the 16
department of environmental management pursuant to § 20-2-27.1 that meet the following criteria: 17
(i) The operator must have a current United States Coast Guard (U.S.C.G.) license to carry 18
passengers for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii) 19
U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a Rhode Island boat 20
registration to prove Rhode Island home port status; and (iv) The vessel must be used as a 21
commercial passenger carrying fishing vessel to carry passengers for fishing. The vessel must be 22
able to demonstrate that at least fifty percent (50%) of its annual gross income derives from charters 23
or provides documentation of a minimum of one hundred (100) charter trips annually; and (v) The 24
vessel must have a valid Rhode Island party and charter boat license. The tax administrator shall 25
implement the provisions of this subdivision by promulgating rules and regulations relating thereto. 26
(27) Clothing and footwear. From the sales of articles of clothing, including footwear, 27
intended to be worn or carried on or about the human body for sales prior to October 1, 2012. 28
Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including 29
footwear, intended to be worn or carried on or about the human body up to two hundred and fifty 30
dollars ($250) of the sales price per item. For the purposes of this section, “clothing or footwear” 31
does not include clothing accessories or equipment or special clothing or footwear primarily 32
designed for athletic activity or protective use as these terms are defined in § 44-18-7.1(f). In 33
recognition of the work being performed by the streamlined sales and use tax governing board, 34
LC001655 - Page 23 of 39
upon passage of any federal law that authorizes states to require remote sellers to collect and remit 1
sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. The 2
unlimited exemption on sales of clothing and footwear shall take effect on the date that the state 3
requires remote sellers to collect and remit sales and use taxes. 4
(28) Water for residential use. From the sale and from the storage, use, or other 5
consumption in this state of water furnished for domestic use by occupants of residential premises. 6
(29) Bibles. [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see Notes 7
to Decisions.] From the sale and from the storage, use, or other consumption in the state of any 8
canonized scriptures of any tax-exempt nonprofit religious organization including, but not limited 9
to, the Old Testament and the New Testament versions. 10
(30) Boats. 11
(i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not 12
register the boat or vessel in this state or document the boat or vessel with the United States 13
government at a home port within the state, whether the sale or delivery of the boat or vessel is 14
made in this state or elsewhere; provided, that the nonresident transports the boat within thirty (30) 15
days after delivery by the seller outside the state for use thereafter solely outside the state. 16
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may 17
require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents as the 18
tax administrator deems reasonably necessary to substantiate the exemption provided in this 19
subdivision, including the affidavit of the seller that the buyer represented himself or herself to be 20
a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this state. 21
(31) Youth activities equipment. From the sale, storage, use, or other consumption in this 22
state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island 23
eleemosynary organizations, for the purposes of youth activities that the organization is formed to 24
sponsor and support; and by accredited elementary and secondary schools for the purposes of the 25
schools or of organized activities of the enrolled students. 26
(32) Farm equipment. From the sale and from the storage or use of machinery and 27
equipment used directly for commercial farming and agricultural production; including, but not 28
limited to: tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors, 29
balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment, 30
greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and 31
other farming equipment, including replacement parts appurtenant to or used in connection with 32
commercial farming and tools and supplies used in the repair and maintenance of farming 33
equipment. “Commercial farming” means the keeping or boarding of five (5) or more horses or the 34
LC001655 - Page 24 of 39
production within this state of agricultural products, including, but not limited to, field or orchard 1
crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or production 2
provides at least two thousand five hundred dollars ($2,500) in annual gross sales to the operator, 3
whether an individual, a group, a partnership, or a corporation for exemptions issued prior to July 4
1, 2002. For exemptions issued or renewed after July 1, 2002, there shall be two (2) levels. Level I 5
shall be based on proof of annual, gross sales from commercial farming of at least twenty-five 6
hundred dollars ($2,500) and shall be valid for purchases subject to the exemption provided in this 7
subdivision except for motor vehicles with an excise tax value of five thousand dollars ($5,000) or 8
greater. Level II shall be based on proof of annual gross sales from commercial farming of at least 9
ten thousand dollars ($10,000) or greater and shall be valid for purchases subject to the exemption 10
provided in this subdivision including motor vehicles with an excise tax value of five thousand 11
dollars ($5,000) or greater. For the initial issuance of the exemptions, proof of the requisite amount 12
of annual gross sales from commercial farming shall be required for the prior year; for any renewal 13
of an exemption granted in accordance with this subdivision at either level I or level II, proof of 14
gross annual sales from commercial farming at the requisite amount shall be required for each of 15
the prior two (2) years. Certificates of exemption issued or renewed after July 1, 2002, shall clearly 16
indicate the level of the exemption and be valid for four (4) years after the date of issue. This 17
exemption applies even if the same equipment is used for ancillary uses, or is temporarily used for 18
a non-farming or a non-agricultural purpose, but shall not apply to motor vehicles acquired after 19
July 1, 2002, unless the vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for 20
registration displaying farm plates as provided for in § 31-3-31. 21
(33) Compressed air. From the sale and from the storage, use, or other consumption in the 22
state of compressed air. 23
(34) Flags. From the sale and from the storage, consumption, or other use in this state of 24
United States, Rhode Island or POW-MIA flags. 25
(35) Motor vehicle and adaptive equipment to certain veterans. From the sale of a motor 26
vehicle and adaptive equipment to and for the use of a veteran with a service-connected loss of or 27
the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee, whether service 28
connected or not. The motor vehicle must be purchased by and especially equipped for use by the 29
qualifying veteran. Certificate of exemption or refunds of taxes paid is granted under rules or 30
regulations that the tax administrator may prescribe. 31
(36) Textbooks. From the sale and from the storage, use, or other consumption in this state 32
of textbooks by an “educational institution,” as defined in subsection (18) of this section, and any 33
educational institution within the purview of § 16-63-9(4), and used textbooks by any purveyor. 34
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(37) Tangible personal property and supplies used in on-site hazardous waste recycling, 1
reuse, or treatment. From the sale, storage, use, or other consumption in this state of tangible 2
personal property or supplies used or consumed in the operation of equipment, the exclusive 3
function of which is the recycling, reuse, or recovery of materials (other than precious metals, as 4
defined in subdivision (24)(ii) of this section) from the treatment of “hazardous wastes,” as defined 5
in § 23-19.1-4, where the “hazardous wastes” are generated in Rhode Island solely by the same 6
taxpayer and where the personal property is located at, in, or adjacent to a generating facility of the 7
taxpayer in Rhode Island. The taxpayer shall procure an order from the director of the department 8
of environmental management certifying that the equipment and/or supplies as used or consumed, 9
qualify for the exemption under this subdivision. If any information relating to secret processes or 10
methods of manufacture, production, or treatment is disclosed to the department of environmental 11
management only to procure an order, and is a “trade secret” as defined in § 28-21-10(b), it is not 12
open to public inspection or publicly disclosed unless disclosure is required under chapter 21 of 13
title 28 or chapter 24.4 of title 23. 14
(38) Promotional and product literature of boat manufacturers. From the sale and from the 15
storage, use, or other consumption of promotional and product literature of boat manufacturers 16
shipped to points outside of Rhode Island that either: (i) Accompany the product that is sold; (ii) 17
Are shipped in bulk to out-of-state dealers for use in the sale of the product; or (iii) Are mailed to 18
customers at no charge. 19
(39) Food items paid for by food stamps. From the sale and from the storage, use, or other 20
consumption in this state of eligible food items payment for which is properly made to the retailer 21
in the form of U.S. government food stamps issued in accordance with the Food Stamp Act of 1977, 22
7 U.S.C. § 2011 et seq. 23
(40) Transportation charges. From the sale or hiring of motor carriers as defined in § 39-24
12-2(12) to haul goods, when the contract or hiring cost is charged by a motor freight tariff filed 25
with the Rhode Island public utilities commission on the number of miles driven or by the number 26
of hours spent on the job. 27
(41) Trade-in value of boats. From the sale and from the storage, use, or other consumption 28
in this state of so much of the purchase price paid for a new or used boat as is allocated for a trade-29
in allowance on the boat of the buyer given in trade to the seller or of the proceeds applicable only 30
to the boat as are received from an insurance claim as a result of a stolen or damaged boat, towards 31
the purchase of a new or used boat by the buyer. 32
(42) Equipment used for research and development. From the sale and from the storage, 33
use, or other consumption of equipment to the extent used for research and development purposes 34
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by a qualifying firm. For the purposes of this subsection, “qualifying firm” means a business for 1
which the use of research and development equipment is an integral part of its operation and 2
“equipment” means scientific equipment, computers, software, and related items. 3
(43) Coins. From the sale and from the other consumption in this state of coins having 4
numismatic or investment value. 5
(44) Farm structure construction materials. Lumber, hardware, and other materials used in 6
the new construction of farm structures, including production facilities such as, but not limited to: 7
farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying houses, 8
fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing rooms, 9
machinery storage, seasonal farm worker housing, certified farm markets, bunker and trench silos, 10
feed storage sheds, and any other structures used in connection with commercial farming. 11
(45) Telecommunications carrier access service. Carrier access service or 12
telecommunications service when purchased by a telecommunications company from another 13
telecommunications company to facilitate the provision of telecommunications service. 14
(46) Boats or vessels brought into the state exclusively for winter storage, maintenance, 15
repair, or sale. Notwithstanding the provisions of §§ 44-18-10, 44-18-11 and 44-18-20, the tax 16
imposed by § 44-18-20 is not applicable for the period commencing on the first day of October in 17
any year up to and including the 30th day of April next succeeding with respect to the use of any 18
boat or vessel within this state exclusively for purposes of: (i) Delivery of the vessel to a facility in 19
this state for storage, including dry storage and storage in water by means of apparatus preventing 20
ice damage to the hull, maintenance, or repair; (ii) The actual process of storage, maintenance, or 21
repair of the boat or vessel; or (iii) Storage for the purpose of selling the boat or vessel. 22
(47) Jewelry display product. From the sale and from the storage, use, or other 23
consumption in this state of tangible personal property used to display any jewelry product; 24
provided that title to the jewelry display product is transferred by the jewelry manufacturer or seller 25
and that the jewelry display product is shipped out of state for use solely outside the state and is not 26
returned to the jewelry manufacturer or seller. 27
(48) Boats or vessels generally. Notwithstanding the provisions of this chapter, the tax 28
imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage, 29
use, or other consumption in this state of any new or used boat. The exemption provided for in this 30
subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal ten 31
percent (10%) surcharge on luxury boats is repealed. 32
(49) Banks and regulated investment companies interstate toll-free calls. Notwithstanding 33
the provisions of this chapter, the tax imposed by this chapter does not apply to the furnishing of 34
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interstate and international, toll-free terminating telecommunication service that is used directly 1
and exclusively by or for the benefit of an eligible company as defined in this subdivision; provided 2
that an eligible company employs on average during the calendar year no less than five hundred 3
(500) “full-time equivalent employees” as that term is defined in § 42-64.5-2. For purposes of this 4
section, an “eligible company” means a “regulated investment company” as that term is defined in 5
the Internal Revenue Code of 1986, 26 U.S.C. § 851, or a corporation to the extent the service is 6
provided, directly or indirectly, to or on behalf of a regulated investment company, an employee 7
benefit plan, a retirement plan or a pension plan, or a state-chartered bank. 8
(50) Mobile and manufactured homes generally. From the sale and from the storage, use, 9
or other consumption in this state of mobile and/or manufactured homes as defined and subject to 10
taxation pursuant to the provisions of chapter 44 of title 31. 11
(51) Manufacturing business reconstruction materials. 12
(i) From the sale and from the storage, use, or other consumption in this state of lumber, 13
hardware, and other building materials used in the reconstruction of a manufacturing business 14
facility that suffers a disaster, as defined in this subdivision, in this state. “Disaster” means any 15
occurrence, natural or otherwise, that results in the destruction of sixty percent (60%) or more of 16
an operating manufacturing business facility within this state. “Disaster” does not include any 17
damage resulting from the willful act of the owner of the manufacturing business facility. 18
(ii) Manufacturing business facility includes, but is not limited to, the structures housing 19
the production and administrative facilities. 20
(iii) In the event a manufacturer has more than one manufacturing site in this state, the sixty 21
percent (60%) provision applies to the damages suffered at that one site. 22
(iv) To the extent that the costs of the reconstruction materials are reimbursed by insurance, 23
this exemption does not apply. 24
(52) Tangible personal property and supplies used in the processing or preparation of floral 25
products and floral arrangements. From the sale, storage, use, or other consumption in this state of 26
tangible personal property or supplies purchased by florists, garden centers, or other like producers 27
or vendors of flowers, plants, floral products, and natural and artificial floral arrangements that are 28
ultimately sold with flowers, plants, floral products, and natural and artificial floral arrangements 29
or are otherwise used in the decoration, fabrication, creation, processing, or preparation of flowers, 30
plants, floral products, or natural and artificial floral arrangements, including descriptive labels, 31
stickers, and cards affixed to the flower, plant, floral product, or arrangement, artificial flowers, 32
spray materials, floral paint and tint, plant shine, flower food, insecticide, and fertilizers. 33
(53) Horse food products. From the sale and from the storage, use, or other consumption 34
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in this state of horse food products purchased by a person engaged in the business of the boarding 1
of horses. 2
(54) Non-motorized recreational vehicles sold to nonresidents. 3
(i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to 4
a bona fide nonresident of this state who does not register the non-motorized recreational vehicle 5
in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this 6
state or at the place of residence of the nonresident; provided that a non-motorized recreational 7
vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption to 8
its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in 9
that event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate 10
that would be imposed in his or her state of residence not to exceed the rate that would have been 11
imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed, non-motorized 12
recreational vehicle dealer shall add and collect the tax required under this subdivision and remit 13
the tax to the tax administrator under the provisions of chapters 18 and 19 of this title. Provided, 14
that when a Rhode Island licensed, non-motorized recreational vehicle dealer is required to add and 15
collect the sales and use tax on the sale of a non-motorized recreational vehicle to a bona fide 16
nonresident as provided in this section, the dealer in computing the tax takes into consideration the 17
law of the state of the nonresident as it relates to the trade-in of motor vehicles. 18
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may 19
require any licensed, non-motorized recreational vehicle dealer to keep records of sales to bona fide 20
nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption 21
provided in this subdivision, including the affidavit of a licensed, non-motorized recreational 22
vehicle dealer that the purchaser of the non-motorized recreational vehicle was the holder of, and 23
had in his or her possession a valid out-of-state non-motorized recreational vehicle registration or 24
a valid out-of-state driver’s license. 25
(iii) Any nonresident who registers a non-motorized recreational vehicle in this state within 26
ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-motorized 27
recreational vehicle for use, storage, or other consumption in this state, and is subject to, and liable 28
for, the use tax imposed under the provisions of § 44-18-20. 29
(iv) “Non-motorized recreational vehicle” means any portable dwelling designed and 30
constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use 31
that is eligible to be registered for highway use, including, but not limited to, “pick-up coaches” or 32
“pick-up campers,” “travel trailers,” and “tent trailers” as those terms are defined in chapter 1 of 33
title 31. 34
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(55) Sprinkler and fire alarm systems in existing buildings. From the sale in this state of 1
sprinkler and fire alarm systems; emergency lighting and alarm systems; and the materials 2
necessary and attendant to the installation of those systems that are required in buildings and 3
occupancies existing therein in July 2003 in order to comply with any additional requirements for 4
such buildings arising directly from the enactment of the Comprehensive Fire Safety Act of 2003 5
and that are not required by any other provision of law or ordinance or regulation adopted pursuant 6
to that act. The exemption provided in this subdivision shall expire on December 31, 2008. 7
(56) Aircraft. Notwithstanding the provisions of this chapter, the tax imposed by §§ 44-8
18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or other 9
consumption in this state of any new or used aircraft or aircraft parts. 10
(57) Renewable energy products. Notwithstanding any other provisions of Rhode Island 11
general laws, the following products shall also be exempt from sales tax: solar photovoltaic 12
modules or panels, or any module or panel that generates electricity from light; solar thermal 13
collectors, including, but not limited to, those manufactured with flat glass plates, extruded plastic, 14
sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-water and 15
water-to-air type pumps; wind turbines; towers used to mount wind turbines if specified by or sold 16
by a wind turbine manufacturer; DC to AC inverters that interconnect with utility power lines; and 17
manufactured mounting racks and ballast pans for solar collector, module, or panel installation. Not 18
to include materials that could be fabricated into such racks; monitoring and control equipment, if 19
specified or supplied by a manufacturer of solar thermal, solar photovoltaic, geothermal, or wind 20
energy systems or if required by law or regulation for such systems but not to include pumps, fans 21
or plumbing or electrical fixtures unless shipped from the manufacturer affixed to, or an integral 22
part of, another item specified on this list; and solar storage tanks that are part of a solar domestic 23
hot water system or a solar space heating system. If the tank comes with an external heat exchanger 24
it shall also be tax exempt, but a standard hot water tank is not exempt from state sales tax. 25
(58) Returned property. The amount charged for property returned by customers upon 26
rescission of the contract of sale when the entire amount exclusive of handling charges paid for the 27
property is refunded in either cash or credit, and where the property is returned within one hundred 28
twenty (120) days from the date of delivery. 29
(59) Dietary supplements. From the sale and from the storage, use, or other consumption 30
of dietary supplements as defined in § 44-18-7.1(l)(v), sold on prescriptions. 31
(60) Blood. From the sale and from the storage, use, or other consumption of human blood. 32
(61) Agricultural products for human consumption. From the sale and from the storage, 33
use, or other consumption of livestock and poultry of the kinds of products that ordinarily constitute 34
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food for human consumption and of livestock of the kind the products of which ordinarily constitute 1
fibers for human use. 2
(62) Diesel emission control technology. From the sale and use of diesel retrofit 3
technology that is required by § 31-47.3-4. 4
(63) Feed for certain animals used in commercial farming. From the sale of feed for 5
animals as described in subsection (61) of this section. 6
(64) Alcoholic beverages. From the sale and storage, use, or other consumption in this 7
state by a Class A licensee of alcoholic beverages, as defined in § 44-18-7.1, excluding beer and 8
malt beverages; provided, further, notwithstanding § 6-13-1 or any other general or public law to 9
the contrary, alcoholic beverages, as defined in § 44-18-7.1, shall not be subject to minimum 10
markup. 11
(65) Seeds and plants used to grow food and food ingredients. From the sale, storage, use, 12
or other consumption in this state of seeds and plants used to grow food and food ingredients as 13
defined in § 44-18-7.1(l)(i). “Seeds and plants used to grow food and food ingredients” shall not 14
include marijuana seeds or plants. 15
(66) Feminine hygiene products. From the sale and from the storage, use, or other 16
consumption of tampons, panty liners, menstrual cups, sanitary napkins, and other similar products 17
the principal use of which is feminine hygiene in connection with the menstrual cycle. 18
(67) “Breast pump collection and storage supplies” means items of tangible personal 19
property used in conjunction with a breast pump to collect milk expressed from a human breast and 20
to store collected milk until it is ready for consumption. “Breast pump collection and storage 21
supplies” include, but are not limited to, breast shields and breast shield connectors; breast pump 22
tubes and tubing adaptors; breast pump valves and membranes; backflow protectors and backflow 23
protector adaptors; bottles and bottle caps specific to the operation of the breast pump; breast milk 24
storage bags; and related items sold as part of a breast pump kit pre-packaged by the breast pump 25
manufacturer. “Breast pump collection and storage supplies” does not include: bottles and bottle 26
caps not specific to the operation of the breast pump; breast pump travel bags and other similar 27
carrying accessories, including ice packs, labels, and other similar products, unless sold as part of 28
a breast pump kit pre-packed by the breast pump manufacturer; breast pump cleaning supplies, 29
unless sold as part of a breast pump kit pre-packaged by the breast pump manufacturer; nursing 30
bras, bra pads, breast shells, and other similar products; and creams, ointments, and other similar 31
products that relieve breastfeeding-related symptoms or conditions of the breasts or nipples. 32
(68) Trade-in value of motorcycles. From the sale and from the storage, use, or other 33
consumption in this state of so much of the purchase price paid for a new or used motorcycle as is 34
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allocated for a trade-in allowance on the motorcycle of the buyer given in trade to the seller, or of 1
the proceeds applicable only to the motorcycle as are received from the manufacturer of 2
motorcycles for the repurchase of the motorcycle whether the repurchase was voluntary or not 3
towards the purchase of a new or used motorcycle by the buyer. For the purpose of this subsection, 4
the word “motorcycle” means a motorcycle not used for hire and does not refer to any other type 5
of motor vehicle. 6
(69) From the sale, storage, use, or other consumption in this state of farm products used 7
to grow food by urban and small farmers. 8
(i) For purposes of this subsection: 9
(A) An “urban farmer” is a taxpayer that produces or grows food in a city or other heavily 10
populated areas; and 11
(B) A “small farmer” is a taxpayer that farms agricultural land up to five (5) acres. 12
SECTION 4. Section 44-30-12 of the General Laws in Chapter 44-30 entitled "Personal 13
Income Tax" is hereby amended to read as follows: 14
44-30-12. Rhode Island income of a resident individual. 15
(a) General. The Rhode Island income of a resident individual means his or her adjusted 16
gross income for federal income tax purposes, with the modifications specified in this section. 17
(b) Modifications increasing federal adjusted gross income. There shall be added to 18
federal adjusted gross income: 19
(1) Interest income on obligations of any state, or its political subdivisions, other than 20
Rhode Island or its political subdivisions; 21
(2) Interest or dividend income on obligations or securities of any authority, commission, 22
or instrumentality of the United States, but not of Rhode Island or its political subdivisions, to the 23
extent exempted by the laws of the United States from federal income tax but not from state income 24
taxes; 25
(3) The modification described in § 44-30-25(g); 26
(4)(i) The amount defined below of a nonqualified withdrawal made from an account in 27
the tuition savings program pursuant to § 16-57-6.1. For purposes of this section, a nonqualified 28
withdrawal is: 29
(A) A transfer or rollover to a qualified tuition program under Section 529 of the Internal 30
Revenue Code, 26 U.S.C. § 529, other than to the tuition savings program referred to in § 16-57-31
6.1; and 32
(B) A withdrawal or distribution that is: 33
(I) Not applied on a timely basis to pay “qualified higher education expenses” as defined 34
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in § 16-57-3(12) of the beneficiary of the account from which the withdrawal is made; 1
(II) Not made for a reason referred to in § 16-57-6.1(e); or 2
(III) Not made in other circumstances for which an exclusion from tax made applicable by 3
Section 529 of the Internal Revenue Code, 26 U.S.C. § 529, pertains if the transfer, rollover, 4
withdrawal, or distribution is made within two (2) taxable years following the taxable year for 5
which a contributions modification pursuant to subsection (c)(4) of this section is taken based on 6
contributions to any tuition savings program account by the person who is the participant of the 7
account at the time of the contribution, whether or not the person is the participant of the account 8
at the time of the transfer, rollover, withdrawal or distribution; 9
(ii) In the event of a nonqualified withdrawal under subsection (b)(4)(i)(A) or (b)(4)(i)(B) 10
of this section, there shall be added to the federal adjusted gross income of that person for the 11
taxable year of the withdrawal an amount equal to the lesser of: 12
(A) The amount equal to the nonqualified withdrawal reduced by the sum of any 13
administrative fee or penalty imposed under the tuition savings program in connection with the 14
nonqualified withdrawal plus the earnings portion thereof, if any, includible in computing the 15
person’s federal adjusted gross income for the taxable year; and 16
(B) The amount of the person’s contribution modification pursuant to subsection (c)(4) of 17
this section for the person’s taxable year of the withdrawal and the two (2) prior taxable years less 18
the amount of any nonqualified withdrawal for the two (2) prior taxable years included in 19
computing the person’s Rhode Island income by application of this subsection for those years. Any 20
amount added to federal adjusted gross income pursuant to this subdivision shall constitute Rhode 21
Island income for residents, nonresidents and part-year residents; 22
(5) The modification described in § 44-30-25.1(d)(3)(i); 23
(6) The amount equal to any unemployment compensation received but not included in 24
federal adjusted gross income; 25
(7) The amount equal to the deduction allowed for sales tax paid for a purchase of a 26
qualified motor vehicle as defined by the Internal Revenue Code § 164(a)(6); and 27
(8) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck 28
Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus 29
Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or 30
any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount 31
of the loan forgiven exceeds $250,000, including an individual’s distributive share of the amount 32
of a pass-through entity’s loan forgiveness in excess of $250,000. 33
(c) Modifications reducing federal adjusted gross income. There shall be subtracted 34
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from federal adjusted gross income: 1
(1) Any interest income on obligations of the United States and its possessions to the extent 2
includible in gross income for federal income tax purposes, and any interest or dividend income on 3
obligations, or securities of any authority, commission, or instrumentality of the United States to 4
the extent includible in gross income for federal income tax purposes but exempt from state income 5
taxes under the laws of the United States; provided, that the amount to be subtracted shall in any 6
case be reduced by any interest on indebtedness incurred or continued to purchase or carry 7
obligations or securities the income of which is exempt from Rhode Island personal income tax, to 8
the extent the interest has been deducted in determining federal adjusted gross income or taxable 9
income; 10
(2) A modification described in § 44-30-25(f) or § 44-30-1.1(c)(1); 11
(3) The amount of any withdrawal or distribution from the “tuition savings program” 12
referred to in § 16-57-6.1 that is included in federal adjusted gross income, other than a withdrawal 13
or distribution or portion of a withdrawal or distribution that is a nonqualified withdrawal; 14
(4) Contributions made to an account under the tuition savings program, including the 15
“contributions carryover” pursuant to subsection (c)(4)(iv) of this section, if any, subject to the 16
following limitations, restrictions and qualifications: 17
(i) The aggregate subtraction pursuant to this subdivision for any taxable year of the 18
taxpayer shall not exceed five hundred dollars ($500) or one thousand dollars ($1,000) if a joint 19
return; 20
(ii) The following shall not be considered contributions: 21
(A) Contributions made by any person to an account who is not a participant of the account 22
at the time the contribution is made; 23
(B) Transfers or rollovers to an account from any other tuition savings program account or 24
from any other “qualified tuition program” under section 529 of the Internal Revenue Code, 26 25
U.S.C. § 529; or 26
(C) A change of the beneficiary of the account; 27
(iii) The subtraction pursuant to this subdivision shall not reduce the taxpayer’s federal 28
adjusted gross income to less than zero (0); 29
(iv) The contributions carryover to a taxable year for purpose of this subdivision is the 30
excess, if any, of the total amount of contributions actually made by the taxpayer to the tuition 31
savings program for all preceding taxable years for which this subsection is effective over the sum 32
of: 33
(A) The total of the subtractions under this subdivision allowable to the taxpayer for all 34
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such preceding taxable years; and 1
(B) That part of any remaining contribution carryover at the end of the taxable year which 2
exceeds the amount of any nonqualified withdrawals during the year and the prior two (2) taxable 3
years not included in the addition provided for in this subdivision for those years. Any such part 4
shall be disregarded in computing the contributions carryover for any subsequent taxable year; 5
(v) For any taxable year for which a contributions carryover is applicable, the taxpayer 6
shall include a computation of the carryover with the taxpayer’s Rhode Island personal income tax 7
return for that year, and if for any taxable year on which the carryover is based the taxpayer filed a 8
joint Rhode Island personal income tax return but filed a return on a basis other than jointly for a 9
subsequent taxable year, the computation shall reflect how the carryover is being allocated between 10
the prior joint filers; 11
(5) The modification described in § 44-30-25.1(d)(1); 12
(6) Amounts deemed taxable income to the taxpayer due to payment or provision of 13
insurance benefits to a dependent, including a domestic partner pursuant to chapter 12 of title 36 or 14
other coverage plan; 15
(7) Modification for organ transplantation. 16
(i) An individual may subtract up to ten thousand dollars ($10,000) from federal adjusted 17
gross income if he or she, while living, donates one or more of his or her human organs to another 18
human being for human organ transplantation, except that for purposes of this subsection, “human 19
organ” means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract 20
modification that is claimed hereunder may be claimed in the taxable year in which the human 21
organ transplantation occurs. 22
(ii) An individual may claim that subtract modification hereunder only once, and the 23
subtract modification may be claimed for only the following unreimbursed expenses that are 24
incurred by the claimant and related to the claimant’s organ donation: 25
(A) Travel expenses. 26
(B) Lodging expenses. 27
(C) Lost wages. 28
(iii) The subtract modification hereunder may not be claimed by a part-time resident or a 29
nonresident of this state; 30
(8) Modification for taxable Social Security income. 31
(i) For tax years beginning on or after January 1, 2016: 32
(A) For a person who has attained the age used for calculating full or unreduced Social 33
Security retirement benefits who files a return as an unmarried individual, head of household, or 34
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married filing separate whose federal adjusted gross income for the taxable year is less than eighty 1
thousand dollars ($80,000); or 2
(B) A married individual filing jointly or individual filing qualifying widow(er) who has 3
attained the age used for calculating full or unreduced Social Security retirement benefits whose 4
joint federal adjusted gross income for the taxable year is less than one hundred thousand dollars 5
($100,000), an amount equal to the Social Security benefits includible in federal adjusted gross 6
income. 7
(ii) Adjustment for inflation. The dollar amount contained in subsections (c)(8)(i)(A) and 8
(c)(8)(i)(B) of this section shall be increased annually by an amount equal to: 9
(A) Such dollar amount contained in subsections (c)(8)(i)(A) and (c)(8)(i)(B) of this section 10
adjusted for inflation using a base tax year of 2000, multiplied by; 11
(B) The cost-of-living adjustment with a base year of 2000. 12
(iii) For the purposes of this section the cost-of-living adjustment for any calendar year is 13
the percentage (if any) by which the consumer price index for the preceding calendar year exceeds 14
the consumer price index for the base year. The consumer price index for any calendar year is the 15
average of the consumer price index as of the close of the twelve-month (12) period ending on 16
August 31, of such calendar year. 17
(iv) For the purpose of this section the term “consumer price index” means the last 18
consumer price index for all urban consumers published by the department of labor. For the purpose 19
of this section the revision of the consumer price index which is most consistent with the consumer 20
price index for calendar year 1986 shall be used. 21
(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00), 22
such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a 23
married individual filing separate return, if any increase determined under this section is not a 24
multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple 25
of twenty-five dollars ($25.00); 26
(9) Modification of taxable retirement income from certain pension plans or 27
annuities. 28
(i) For tax years beginning on or after January 1, 2017, until the tax year beginning January 29
1, 2022, a modification shall be allowed for up to fifteen thousand dollars ($15,000), and for tax 30
years beginning on or after January 1, 2023, a modification shall be allowed for up to twenty 31
thousand dollars ($20,000), of taxable pension and/or annuity income that is included in federal 32
adjusted gross income for the taxable year: 33
(A) For a person who has attained the age used for calculating full or unreduced Social 34
LC001655 - Page 36 of 39
Security retirement benefits who files a return as an unmarried individual, head of household, or 1
married filing separate whose federal adjusted gross income for such taxable year is less than the 2
amount used for the modification contained in subsection (c)(8)(i)(A) of this section an amount not 3
to exceed $15,000 for tax years beginning on or after January 1, 2017, until the tax year beginning 4
January 1, 2022, and an amount not to exceed twenty thousand dollars ($20,000) for tax years 5
beginning on or after January 1, 2023, of taxable pension and/or annuity income includible in 6
federal adjusted gross income; or 7
(B) For a married individual filing jointly or individual filing qualifying widow(er) who 8
has attained the age used for calculating full or unreduced Social Security retirement benefits whose 9
joint federal adjusted gross income for such taxable year is less than the amount used for the 10
modification contained in subsection (c)(8)(i)(B) of this section an amount not to exceed $15,000 11
for tax years beginning on or after January 1, 2017, until the tax year beginning January 1, 2022, 12
and an amount not to exceed twenty thousand dollars ($20,000) for tax years beginning on or after 13
January 1, 2023, of taxable pension and/or annuity income includible in federal adjusted gross 14
income. 15
(ii) Adjustment for inflation. The dollar amount contained by reference in subsections 16
(c)(9)(i)(A) and (c)(9)(i)(B) of this section shall be increased annually for tax years beginning on 17
or after January 1, 2018, by an amount equal to: 18
(A) Such dollar amount contained by reference in subsections (c)(9)(i)(A) and (c)(9)(i)(B) 19
of this section adjusted for inflation using a base tax year of 2000, multiplied by; 20
(B) The cost-of-living adjustment with a base year of 2000. 21
(iii) For the purposes of this section, the cost-of-living adjustment for any calendar year is 22
the percentage (if any) by which the consumer price index for the preceding calendar year exceeds 23
the consumer price index for the base year. The consumer price index for any calendar year is the 24
average of the consumer price index as of the close of the twelve-month (12) period ending on 25
August 31, of such calendar year. 26
(iv) For the purpose of this section, the term “consumer price index” means the last 27
consumer price index for all urban consumers published by the department of labor. For the purpose 28
of this section, the revision of the consumer price index which is most consistent with the consumer 29
price index for calendar year 1986 shall be used. 30
(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00), 31
such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a 32
married individual filing a separate return, if any increase determined under this section is not a 33
multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple 34
LC001655 - Page 37 of 39
of twenty-five dollars ($25.00). 1
(vi) For tax years beginning on or after January 1, 2022, the dollar amount contained by 2
reference in subsection (c)(9)(i)(A) shall be adjusted to equal the dollar amount contained in 3
subsection (c)(8)(i)(A), as adjusted for inflation, and the dollar amount contained by reference in 4
subsection(c)(9)(i)(B) shall be adjusted to equal the dollar amount contained in subsection 5
(c)(8)(i)(B), as adjusted for inflation; 6
(10) Modification for Rhode Island investment in opportunity zones. For purposes of 7
a taxpayer’s state tax liability, in the case of any investment in a Rhode Island opportunity zone by 8
the taxpayer for at least seven (7) years, a modification to income shall be allowed for the 9
incremental difference between the benefit allowed under 26 U.S.C. § 1400Z-2(b)(2)(B)(iv) and 10
the federal benefit allowed under 26 U.S.C. § 1400Z-2(c); 11
(11) Modification for military service pensions. 12
(i) For purposes of a taxpayer’s state tax liability, a modification to income shall be allowed 13
as follows: 14
(A) For the tax years beginning on January 1, 2023, a taxpayer may subtract from federal 15
adjusted gross income the taxpayer’s military service pension benefits included in federal adjusted 16
gross income; 17
(ii) As used in this subsection, the term “military service” shall have the same meaning as 18
set forth in 20 C.F.R. § 212.2; 19
(iii) At no time shall the modification allowed under this subsection alone or in conjunction 20
with subsection (c)(9) exceed the amount of the military service pension received in the tax year 21
for which the modification is claimed; and 22
(12) Any rebate issued to the taxpayer pursuant to § 44-30-103 to the extent included in 23
gross income for federal tax purposes.; and 24
(13) Modification for urban and small farmers income. For tax years beginning on or after 25
January 1, 2024, a modification shall be allowed for the taxable income that is included in federal 26
adjusted gross income for urban and small farmers. 27
(i) For purposes of this subsection: 28
(A) An “urban farmer” is a taxpayer that produces or grows food in a city or other heavily 29
populated areas; and 30
(B) A “small farmer” is a taxpayer that farms agricultural land up to five (5) acres. 31
(d) Modification for Rhode Island fiduciary adjustment. There shall be added to, or 32
subtracted from, federal adjusted gross income (as the case may be) the taxpayer’s share, as 33
beneficiary of an estate or trust, of the Rhode Island fiduciary adjustment determined under § 44-34
LC001655 - Page 38 of 39
30-17. 1
(e) Partners. The amounts of modifications required to be made under this section by a 2
partner, which relate to items of income or deduction of a partnership, shall be determined under § 3
44-30-15. 4
SECTION 5. This act shall take effect upon passage. 5
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LC001655 - Page 39 of 39
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION
***
This act would exempt urban and small farmers from sales taxes, real, tangible and personal 1
property taxes and income taxes. This act would also define urban and small farmers. 2
This act would take effect upon passage. 3
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