2025 -- H 5534
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LC001568
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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. 2025
____________
A N A C T
RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION
Introduced By: Representatives McGaw, Fogarty, Batista, Sanchez, Hull, Diaz, Giraldo,
Stewart, Fellela, and Boylan
Date Introduced: February 13, 2025
Referred To: House 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; provided that, notwithstanding any provision of a charter or act of incorporation or other 23
law to the contrary, any real and personal property (or portion thereof) of a healthcare facility, 24
and/or any parent corporation, operator, manager, or subsidiary thereof, or of an institution of 25
higher education, that would otherwise be exempted from property taxation that is leased to, 26
subleased to, occupied or used by an entity, organization, or individual that is not itself exempted 27
from property taxation shall be taxed to the tenant, who, for the purposes of taxation is deemed the 28
owner; 29
(11) Lots of land exclusively for burial grounds; 30
(12) Property, real and personal, held for, or by, an incorporated library, society, or any 31
free public library, or any free public library society, so far as the property is held exclusively for 32
library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor 33
generally, or for a nonprofit hospital for the sick or disabled; 34
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(13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated 1
organizations of veterans of any war in which the United States has been engaged, the parent body 2
of which has been incorporated by act of Congress, to the extent of four hundred thousand dollars 3
($400,000) if actually used and occupied by the association; provided, that the city council of the 4
city of Cranston may by ordinance exempt the real or personal estate as previously described in 5
this subdivision located within the city of Cranston to the extent of five hundred thousand dollars 6
($500,000); 7
(14) Property, real and personal, held for, or by, the fraternal corporation, association, or 8
body created to build and maintain a building or buildings for its meetings or the meetings of the 9
general assembly of its members, or subordinate bodies of the fraternity, and for the 10
accommodation of other fraternal bodies or associations, the entire net income of which real and 11
personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or 12
asylums, a home or homes, a school or schools, for the free education or relief of the members of 13
the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity, their 14
wives, widows, or orphans, and any fund given or held for the purpose of public education, 15
almshouses, and the land and buildings used in connection therewith; 16
(15) Real estate and personal property of any incorporated volunteer fire engine company 17
or incorporated volunteer ambulance or rescue corps in active service; 18
(16) The estate of any person who, in the judgment of the assessors, is unable from infirmity 19
or poverty to pay the tax; provided, that in the towns of Burrillville and West Greenwich, the tax 20
shall constitute a lien for five (5) years on the property where the owner is entitled to the exemption. 21
At the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold 22
or conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the 23
lien immediately becomes due and payable; any person claiming the exemption aggrieved by an 24
adverse decision of an assessor shall appeal the decision to the local board of tax review and 25
thereafter according to the provisions of § 44-5-26; 26
(17) Household furniture and family stores of a housekeeper in the whole, including 27
clothing, bedding, and other white goods, books, and all other tangible personal property items that 28
are common to the normal household; 29
(18) Improvements made to any real property to provide a shelter and fallout protection 30
from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided, that 31
the improvements meet applicable standards for shelter construction established, from time to time, 32
by the Rhode Island emergency management agency. The improvements are deemed to comply 33
with the provisions of any building code or ordinance with respect to the materials or the methods 34
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of construction used and any shelter or its establishment is deemed to comply with the provisions 1
of any zoning code or ordinance; 2
(19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator; 3
(20) Manufacturer’s inventory. 4
(i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be 5
a manufacturer within a city or town within this state if that person uses any premises, room, or 6
place in it primarily for the purpose of transforming raw materials into a finished product for trade 7
through any or all of the following operations: adapting, altering, finishing, making, and 8
ornamenting; provided, that public utilities; non-regulated power producers commencing 9
commercial operation by selling electricity at retail or taking title to generating facilities on or after 10
July 1, 1997; building and construction contractors; warehousing operations, including distribution 11
bases or outlets of out-of-state manufacturers; and fabricating processes incidental to warehousing 12
or distribution of raw materials, such as alteration of stock for the convenience of a customer; are 13
excluded from this definition; 14
(ii) For the purposes of this section and §§ 44-4-10 and 44-5-38, the term “manufacturer’s 15
inventory,” or any similar term, means and includes the manufacturer’s raw materials, the 16
manufacturer’s work in process, and finished products manufactured by the manufacturer in this 17
state, and not sold, leased, or traded by the manufacturer or its title or right to possession divested; 18
provided, that the term does not include any finished products held by the manufacturer in any retail 19
store or other similar selling place operated by the manufacturer whether or not the retail 20
establishment is located in the same building in which the manufacturer operates the manufacturing 21
plant; 22
(iii) For the purpose of § 44-11-2, a “manufacturer” is a person whose principal business 23
in this state consists of transforming raw materials into a finished product for trade through any or 24
all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be 25
principally engaged if the gross receipts that person derived from the manufacturing operations in 26
this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than 27
fifty percent (50%) of the total gross receipts that person derived from all the business activities in 28
which that person engaged in this state during the taxable year. For the purpose of computing the 29
percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished 30
products manufactured by the manufacturer in this state, even though the manufacturer’s store or 31
other selling place may be at a different location from the location of the manufacturer’s 32
manufacturing plant in this state, are deemed to have been derived from manufacturing; 33
(iv) Within the meaning of the preceding paragraphs of this subdivision, the term 34
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“manufacturer” also includes persons who are principally engaged in any of the general activities 1
coded and listed as establishments engaged in manufacturing in the Standard Industrial 2
Classification Manual prepared by the Technical Committee on Industrial Classification, Office of 3
Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as 4
revised from time to time, but eliminating as manufacturers those persons, who, because of their 5
limited type of manufacturing activities, are classified in the manual as falling within the trade 6
rather than an industrial classification of manufacturers. Among those thus eliminated, and 7
accordingly also excluded as manufacturers within the meaning of this paragraph, are persons 8
primarily engaged in selling, to the general public, products produced on the premises from which 9
they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and 10
custom tailors, except, that a person who manufactures bakery products for sale primarily for home 11
delivery, or through one or more non-baking retail outlets, and whether or not retail outlets are 12
operated by the person, is a manufacturer within the meaning of this paragraph; 13
(v) The term “Person” means and includes, as appropriate, a person, partnership, or 14
corporation; and 15
(vi) The department of revenue shall provide to the local assessors any assistance that is 16
necessary in determining the proper application of the definitions in this subdivision; 17
(21) Real and tangible personal property acquired to provide a treatment facility used 18
primarily to control the pollution or contamination of the waters or the air of the state, as defined 19
in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed, 20
reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or 21
standards for the control of water or air pollution or contamination, and certified as approved in an 22
order entered by the director of environmental management. The property is exempt as long as it is 23
operated properly in compliance with the order of approval of the director of environmental 24
management; provided, that any grant of the exemption by the director of environmental 25
management in excess of ten (10) years is approved by the city or town in which the property is 26
situated. This provision applies only to water and air pollution control properties and facilities 27
installed for the treatment of waste waters and air contaminants resulting from industrial 28
processing; furthermore, it applies only to water or air pollution control properties and facilities 29
placed in operation for the first time after April 13, 1970; 30
(22) Manufacturing machinery and equipment acquired or used by a manufacturer after 31
December 31, 1974. Manufacturing machinery and equipment is defined as: 32
(i) Machinery and equipment used exclusively in the actual manufacture or conversion of 33
raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision 34
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(20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and 1
development or for quality assurance of its manufactured products; 2
(ii) Machinery and equipment that is partially used in the actual manufacture or conversion 3
of raw materials or goods in process of manufacture by a manufacturer, as defined in subdivision 4
(20), and machinery, fixtures, and equipment used by a manufacturer for research and development 5
or for quality assurance of its manufactured products, to the extent to which the machinery and 6
equipment is used for the manufacturing processes, research and development, or quality assurance. 7
In the instances where machinery and equipment is used in both manufacturing and/or research and 8
development and/or quality assurance activities and non-manufacturing activities, the assessment 9
on machinery and equipment is prorated by applying the percentage of usage of the equipment for 10
the manufacturing, research and development, and quality-assurance activity to the value of the 11
machinery and equipment for purposes of taxation, and the portion of the value used for 12
manufacturing, research and development, and quality assurance is exempt from taxation. The 13
burden of demonstrating this percentage usage of machinery and equipment for manufacturing and 14
for research and development and/or quality assurance of its manufactured products rests with the 15
manufacturer; and 16
(iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was 17
purchased after July 1, 1997; provided that the city or town council of the city or town in which the 18
machinery and equipment is located adopts an ordinance exempting the machinery and equipment 19
from taxation. For purposes of this subsection, city councils and town councils of any municipality 20
may, by ordinance, wholly or partially exempt from taxation the machinery and equipment 21
discussed in this subsection for the period of time established in the ordinance and may, by 22
ordinance, establish the procedures for taxpayers to avail themselves of the benefit of any 23
exemption permitted under this section; provided, that the ordinance does not apply to any 24
machinery or equipment of a business, subsidiary, or any affiliated business that locates or relocates 25
from a city or town in this state to another city or town in the state; 26
(23) Precious metal bullion, meaning any elementary metal that has been put through a 27
process of melting or refining, and that is in a state or condition that its value depends upon its 28
content and not its form. The term does not include fabricated precious metal that has been 29
processed or manufactured for some one or more specific and customary industrial, professional, 30
or artistic uses; 31
(24) Hydroelectric power-generation equipment, which includes, but is not limited to, 32
turbines, generators, switchgear, controls, monitoring equipment, circuit breakers, transformers, 33
protective relaying, bus bars, cables, connections, trash racks, headgates, and conduits. The 34
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hydroelectric power-generation equipment must have been purchased after July 1, 1979, and 1
acquired or used by a person or corporation who or that owns or leases a dam and utilizes the 2
equipment to generate hydroelectric power; 3
(25) Subject to authorization by formal action of the council of any city or town, any real 4
or personal property owned by, held in trust for, or leased to an organization incorporated under 5
chapter 6 of title 7, as amended, or an organization meeting the definition of “charitable trust” set 6
out in § 18-9-4, as amended, or an organization incorporated under the not-for-profits statutes of 7
another state or the District of Columbia, the purpose of which is the conserving of open space, as 8
that term is defined in chapter 36 of title 45, as amended, provided the property is used exclusively 9
for the purposes of the organization; 10
(26) Tangible personal property, the primary function of which is the recycling, reuse, or 11
recovery of materials (other than precious metals, as defined in § 44-18-30(24)(ii) and (iii)), from, 12
or the treatment of “hazardous wastes,” as defined in § 23-19.1-4, where the “hazardous wastes” 13
are generated primarily by the same taxpayer and where the personal property is located at, in, or 14
adjacent to a generating facility of the taxpayer. The taxpayer may, but need not, procure an order 15
from the director of the department of environmental management certifying that the tangible 16
personal property has this function, which order effects a conclusive presumption that the tangible 17
personal property qualifies for the exemption under this subdivision. If any information relating to 18
secret processes or methods of manufacture, production, or treatment is disclosed to the department 19
of environmental management only to procure an order, and is a “trade secret” as defined in § 28-20
21-10(b), it shall not be open to public inspection or publicly disclosed unless disclosure is 21
otherwise required under chapter 21 of title 28 or chapter 24.4 of title 23; 22
(27) Motorboats as defined in § 46-22-2 for which the annual fee required in § 46-22-4 has 23
been paid; 24
(28) Real and personal property of the Providence Performing Arts Center, a non-business 25
corporation as of December 31, 1986; 26
(29) Tangible personal property owned by, and used exclusively for the purposes of, any 27
religious organization located in the city of Cranston; 28
(30) Real and personal property of the Travelers Aid Society of Rhode Island, a nonprofit 29
corporation, the Union Mall Real Estate Corporation, and any limited partnership or limited liability 30
company that is formed in connection with, or to facilitate the acquisition of, the Providence YMCA 31
Building; 32
(31) Real and personal property of Meeting Street Center or MSC Realty, Inc., both not-33
for-profit Rhode Island corporations, and any other corporation, limited partnership, or limited 34
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liability company that is formed in connection with, or to facilitate the acquisition of, the properties 1
designated as the Meeting Street National Center of Excellence on Eddy Street in Providence, 2
Rhode Island; 3
(32) The buildings, personal property, and land upon which the buildings stand, located on 4
Pomham Island, East Providence, currently identified as Assessor’s Map 211, Block 01, Parcel 5
001.00, that consists of approximately twenty-one thousand three hundred (21,300) square feet and 6
is located approximately eight hundred sixty feet (860′), more or less, from the shore, and limited 7
exclusively to these said buildings, personal estate and land, provided that said property is owned 8
by a qualified 501(c)(3) organization, such as the American Lighthouse Foundation, and is used 9
exclusively for a lighthouse; 10
(33) The Stadium Theatre Performing Arts Centre building located in Monument Square, 11
Woonsocket, Rhode Island, so long as said Stadium Theatre Performing Arts Center is owned by 12
the Stadium Theatre Foundation, a Rhode Island nonprofit corporation; 13
(34) Real and tangible personal property of St. Mary Academy — Bay View, located in 14
East Providence, Rhode Island; 15
(35) Real and personal property of East Bay Community Action Program and its 16
predecessor, Self Help, Inc; provided, that the organization is qualified as a tax-exempt corporation 17
under § 501(c)(3) of the United States Internal Revenue Code; 18
(36) Real and personal property located within the city of East Providence of the Columbus 19
Club of East Providence, a Rhode Island charitable nonprofit corporation; 20
(37) Real and personal property located within the city of East Providence of the Columbus 21
Club of Barrington, a Rhode Island charitable nonprofit corporation; 22
(38) Real and personal property located within the city of East Providence of Lodge 2337 23
BPO Elks, a Rhode Island nonprofit corporation; 24
(39) Real and personal property located within the city of East Providence of the St. 25
Andrews Lodge No. 39, a Rhode Island charitable nonprofit corporation; 26
(40) Real and personal property located within the city of East Providence of the Trustees 27
of Methodist Health and Welfare service a/k/a United Methodist Elder Care, a Rhode Island 28
nonprofit corporation; 29
(41) Real and personal property located on the first floor of 90 Leonard Avenue within the 30
city of East Providence of the Zion Gospel Temple, Inc., a religious nonprofit corporation; 31
(42) Real and personal property located within the city of East Providence of the Cape 32
Verdean Museum Exhibit, a Rhode Island nonprofit corporation; 33
(43) The real and personal property owned by a qualified 501(c)(3) organization that is 34
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affiliated and in good standing with a national, congressionally chartered organization and thereby 1
adheres to that organization’s standards and provides activities designed for recreational, 2
educational, and character building purposes for children from ages six (6) years to seventeen (17) 3
years; 4
(44) Real and personal property of the Rhode Island Philharmonic Orchestra and Music 5
School; provided, that the organization is qualified as a tax-exempt corporation under § 501(c)(3) 6
of the United States Internal Revenue Code; 7
(45) The real and personal property located within the town of West Warwick at 211 8
Cowesett Avenue, Plat 29-Lot 25, which consists of approximately twenty-eight thousand seven 9
hundred fifty (28,750) square feet and is owned by the Station Fire Memorial Foundation of East 10
Greenwich, a Rhode Island nonprofit corporation; 11
(46) Real and personal property of the Comprehensive Community Action Program, a 12
qualified tax-exempt corporation under § 501(c)(3) of the United States Internal Revenue Code; 13
(47) Real and personal property located at 52 Plain Street, within the city of Pawtucket of 14
the Pawtucket Youth Soccer Association, a Rhode Island nonprofit corporation; 15
(48) Renewable energy resources, as defined in § 39-26-5, used in residential systems and 16
associated equipment used therewith in service after December 31, 2015; 17
(49) Renewable energy resources, as defined in § 39-26-5, if employed by a manufacturer, 18
as defined in subsection (a) of this section, shall be exempt from taxation in accordance with 19
subsection (a) of this section; 20
(50) Real and personal property located at 415 Tower Hill Road within the town of North 21
Kingstown, of South County Community Action, Inc., a qualified tax-exempt corporation under § 22
501(c)(3) of the United States Internal Revenue Code; 23
(51) As an effort to promote business growth, tangible business or personal property, in 24
whole or in part, within the town of Charlestown’s community limits, subject to authorization by 25
formal action of the town council of the town of Charlestown; 26
(52) All real and personal property located at 1300 Frenchtown Road, within the town of 27
East Greenwich, identified as assessor’s map 027, plat 019, lot 071, and known as the New England 28
Wireless and Steam Museum, Inc., a qualified tax-exempt corporation under § 501(c)(3) of the 29
United States Internal Revenue Code; 30
(53) Real and tangible personal property of Mount Saint Charles Academy located within 31
the city of Woonsocket, specifically identified as the following assessor’s plats and lots: Logee 32
Street, plat 23, lot 62, Logee Street, plat 24, lots 304 and 305; Welles Street, plat 23, lot 310; 33
Monroe Street, plat 23, lot 312; and Roberge Avenue, plat 24, lot 47; 34
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(54) Real and tangible personal property of Steere House, a Rhode Island nonprofit 1
corporation, located in Providence, Rhode Island; 2
(55) Real and personal property located within the town of West Warwick of Tides Family 3
Services, Inc., a Rhode Island nonprofit corporation; 4
(56) Real and personal property of Tides Family Services, Inc., a Rhode Island nonprofit 5
corporation, located in the city of Pawtucket at 242 Dexter Street, plat 44, lot 444; 6
(57) Real and personal property located within the town of Middletown of Lucy’s Hearth, 7
a Rhode Island nonprofit corporation; 8
(58) Real and tangible personal property of Habitat for Humanity of Rhode Island—9
Greater Providence, Inc., a Rhode Island nonprofit corporation, located in Providence, Rhode 10
Island; 11
(59) Real and personal property of the Artic Playhouse, a Rhode Island nonprofit 12
corporation, located in the town of West Warwick at 1249 Main Street; 13
(60) Real and personal property located at 321 Main Street, within the town of South 14
Kingstown, of the Contemporary Theatre Company, a qualified, tax-exempt corporation under § 15
501(c)(3) of the United States Internal Revenue Code; 16
(61) Real and personal property of The Samaritans, Inc., a Rhode Island nonprofit § 17
501(c)(3) corporation located at 67 Park Place, Pawtucket, Rhode Island, to the extent the city 18
council of Pawtucket may from time to time determine; 19
(62) Real and personal property of North Kingstown, Exeter Animal Protection League, 20
Inc., dba “Pet Refuge,” 500 Stony Lane, a Rhode Island nonprofit corporation, located in North 21
Kingstown, Rhode Island; 22
(63) Real and personal property located within the city of East Providence of Foster 23
Forward (formerly the Rhode Island Foster Parents Association), a Rhode Island charitable 24
nonprofit corporation; 25
(64) Real and personal property located at 54 Kelly Avenue within the town of East 26
Providence, of the Associated Radio Amateurs of Southern New England, a Rhode Island nonprofit 27
corporation; 28
(65) Real and tangible personal property of Providence Country Day School, a Rhode 29
Island nonprofit corporation, located in East Providence, Rhode Island and further identified as plat 30
406, block 6, lot 6, and plat 506, block 1, lot 8; 31
(66) As an effort to promote business growth, tangible business or personal property, in 32
whole or in part, within the town of Bristol’s community limits, subject to authorization by formal 33
action of the town council of the town of Bristol; 34
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(67) Real and tangible personal property of the Heritage Harbor Foundation, a Rhode 1
Island nonprofit corporation, located at 1445 Wampanoag Trail, Suites 103 and 201, within the city 2
of East Providence; 3
(68) Real property of Ocean State Community Wellness, Inc., a qualified tax-exempt 4
corporation under § 501(c)(3) of the United States Internal Revenue Code, located in North 5
Kingstown, Rhode Island, with a physical address of 7450 Post Road, and further identified as plat 6
108, lot 83; 7
(69) Real and tangible personal property of St. John Baptist De La Salle Institute, d/b/a La 8
Salle Academy, a Rhode Island domestic nonprofit corporation, located in Providence, Rhode 9
Island denominated at the time this subsection was adopted as Plat 83 Lot 276 by the tax assessor 10
for the city of Providence comprising approximately 26.08 acres of land along with all buildings 11
and improvements that have been or may be made; 12
(70) Real and tangible personal property of The Providence Community Health Centers, 13
Inc., a Rhode Island domestic nonprofit corporation, located in Providence, Rhode Island; 14
(71) In the city of Central Falls and the city of Pawtucket, real property and tangible 15
personal property located on or in the premise acquired or leased by a railroad entity and for the 16
purpose of providing boarding and disembarking of railroad passengers and the supporting 17
passenger railroad operations and services. For the purpose of this section, a railroad entity shall be 18
any incorporated entity that has been duly authorized by the Rhode Island public utilities 19
commission to provide passenger railroad services; 20
(72) Real and tangible personal property of the American Legion Riverside Post Holding 21
Company, d/b/a American Legion Post 10, a Rhode Island nonprofit corporation, located at 830 22
Willet Avenue, within the city of East Providence on Map 513, Block 27, Parcel 001.00 as long as 23
said property is owned by American Legion Post 10; 24
(73) Real and tangible personal property of the Holy Rosary Band Society, a Rhode Island 25
nonprofit corporation, located at 328 Taunton Avenue, within the city of East Providence on Map 26
306, Block 01, Parcel 012.00; 27
(74) Real and tangible personal property of Foster Forward, a Rhode Island domestic 28
nonprofit corporation, located within the city of Pawtucket, at 16 North Bend Street, and further 29
identified as assessor’s plat 21, lot 312; 30
(75) Real and tangible personal property of the Old and Ancient Rowers Society of Rhode 31
Island, a Rhode Island domestic nonprofit corporation, located at 166 Walmsley Lane, within the 32
town of North Kingstown on Plat 004/Lot 019; 33
(76) Real and tangible personal property of the Rhode Island Public Health Foundation, a 34
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domestic nonprofit corporation or any other entity formed by the Rhode Island Public Health 1
Foundation in connection with, or to facilitate the acquisition of, one property to be owned by the 2
Rhode Island Public Health Foundation or such entity, located in the city of Providence; 3
(77) Real and tangible personal property of the Manissean Tribal Council, a Rhode Island 4
nonprofit corporation, located in the town of New Shoreham, Rhode Island; 5
(78) Real and tangible personal property of Sophia Academy located at 582 Elmwood 6
Avenue, the San Miguel Education Center located at 525 Branch Avenue, and the Community 7
Preparatory School, Inc. located at 135 Prairie Avenue, all of which are domestic nonprofit 8
corporations, and all of which are located within the city of Providence; 9
(79) Real and tangible personal property of Cape Verdean Museum Exhibit, a Rhode Island 10
domestic nonprofit corporation, located at 617 Prospect Street, within the city of Pawtucket on 11
Assessors’ Plat 37, Lot 434; 12
(80) Real and tangible personal property of Sojourner House, a Rhode Island nonprofit 13
corporation, located in the city of Providence, at 386 Smith Street, further identified as Assessor’s 14
Plat 67, Lot 46, and 1570 Westminster Street, further identified as Assessor’s Plat 35, Lot 200; 15
(81) Real and tangible personal property of the Little Flower Home, a Rhode Island 16
domestic nonprofit corporation, located at 304 Hooper Street, within the Town of Tiverton on Map 17
102, Lot 196; provided that, the organization remains a federal 501(c)(3) tax-exempt corporation 18
and a domestic nonprofit charitable corporation; 19
(82) Real and tangible personal property of the Brain Injury Association of Rhode Island, 20
Inc., a nonprofit corporation, located at 1017 Waterman Avenue within the city of East Providence 21
on tax assessor’s map 607, Block 11, Parcel 4; 22
(83) Real and tangible personal property of the Johnnycake Center Realty Corporation, a 23
Rhode Island nonprofit corporation, located in the town of South Kingstown, and further identified 24
as 12 Green Street, Assessor’s Map 49-1, Lot 148, 44 Kersey Road, further identified as Assessor’s 25
Map 49-1, Lot 136, 54 Kersey Road, further identified as Assessor’s Map 49-1, Lot 137, and 1004 26
Kingstown Road, further identified as Assessor’s Map 49-4, Lot 124; 27
(84) Real and tangible personal property of the Little Compton Game Club, a Rhode Island 28
domestic nonprofit corporation, located at 83 John Dyer Road and 88 John Dyer Road, within the 29
town of Little Compton on Assessor’s Plat 44 Lots 4 and 5; 30
(85) Real and tangible personal property of Wildlife Rehabilitators Association of Rhode 31
Island (Wildlife Clinic of Rhode Island), a Rhode Island domestic nonprofit corporation, located at 32
2865 Tower Hill Road, within the town of North Kingstown on Assessor’s Map Plat 5, Lot 1; 33
(86) Non-commercial real and tangible personal property of Southside Community Land 34
LC001568 - Page 13 of 40
Trust, a Rhode Island domestic nonprofit corporation, located in the city of Providence, at 404 1
Broad Street, further identified as Assessor's Plat 23, Lot 753; and 2
(87) Tangible personal property of Northwest Community Health Care d/b/a WellOne 3
Primary Medical and Dental Care, a Rhode Island domestic nonprofit corporation, located in the 4
town of North Scituate at 35 Village Plaza Way, and further identified as Plat 38, Lot 72. 5
(88) Real and tangible personal property of urban farmers and urban farmland, including 6
one building per lot if the building meets all of the following conditions: (i) The building is 7
occupied by one or more urban farmers who are engaged in agricultural operations as defined 8
herein; (ii) The building is used to house agricultural activities including, but not limited to, seed 9
starting, storage of agricultural materials and processing of agricultural products; (iii) The building 10
size is no greater than two thousand five hundred square feet (2,500 sq. ft). 11
(i) For the sole purposes of this subsection: 12
(A) “Actively devoted to agricultural or horticultural use” means land used, under normally 13
acceptable practices, in the production of plants and animals useful to people including, but not 14
limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral, 15
ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy 16
products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including 17
beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any 18
or all such animals for the production of meat, milk, fiber in saleable livestock; and the production 19
of fish, shellfish, plant material and fish products through aquacultural practices. 20
(B) “Agricultural operations” means any commercial enterprise or community garden 21
enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture, 22
forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing 23
animals, poultry, or bees. 24
(C) “Under normally acceptable practices” means management of the urban farmland using 25
cultivation and husbandry techniques including, but not limited to, techniques for the proper animal 26
and plant densities and spacing, harvesting techniques, irrigation techniques, soil conditioning and 27
preservation techniques, erosion control practices, waste disposal techniques, cover crops, and 28
rotation cycles recommended by the university of Rhode Island, U.S. Department of Agriculture, 29
recognized producers organizations and seed and implement manufacturers for Rhode Island soils 30
and practices approved by the department of environmental management agricultural advisory 31
committee. 32
(D) “Urban area” means any municipality that is incorporated as a city or has a population 33
density greater than three thousand (3,000) residents per square mile as of the most recently 34
LC001568 - Page 14 of 40
published U.S. Census. 1
(E) “Urban farmer” means the principal person engaged in agricultural operations on urban 2
farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent. 3
(F) “Urban farmland” means land that is actively devoted to agricultural or horticultural 4
use in an urban area in which an urban farmer is the principal operator of the agricultural operations 5
on such land. 6
(ii) The department of environmental management shall provide to the local assessors any 7
assistance that is necessary in determining the proper application of the definitions in this 8
subsection, at the request of either the local assessor or a property owner. 9
(iii) Land use change tax: 10
(A) Pursuant to § 44-5-39, real property of urban farmers that has been exempt from 11
taxation pursuant to this subsection, for fewer than fifteen (15) years, and the real property is no 12
longer urban farmland as defined in this section, municipalities may assess additional taxes payable 13
by the then current owner, at such time of the land use change, on such real property, in an amount 14
not to exceed: 15
(I) Ten percent (10%) of the then fair market value of the land if the use is changed during 16
the first six (6) years of classification. 17
(II) Nine percent (9%) of the then fair market value of the land if the use is changed during 18
the seventh year of classification. 19
(III) Eight percent (8%) of the then fair market value of the land if the use is changed during 20
the eighth year of classification. 21
(IV) Seven percent (7%) of the then fair market value of the land if the use is changed 22
during the ninth year of classification. 23
(V) Six percent (6%) of the then fair market value of the land if the use is changed during 24
the tenth year of classification. 25
(VI) Five percent (5%) of the then fair market value of the land if the use is changed during 26
the eleventh year of classification. 27
(VII) Four percent (4%) of the then fair market value of the land if the use is changed 28
during the twelfth year of classification. 29
(VIII) Three percent (3%) of the then fair market value of the land if the use is changed 30
during the thirteenth year of classification. 31
(IX) Two percent (2%) of the then fair market value of the land if the use is changed during 32
the fourteenth year of classification. 33
(X) One percent (1%) of the then fair market value of the land if the use is changed during 34
LC001568 - Page 15 of 40
the fifteenth year of classification. 1
(XI) No additional tax shall be imposed following the end of the fifteenth year of 2
classification. 3
(89) Real and tangible personal property of small farmers and small farmland. 4
(i) For the sole purposes of this subsection: 5
(A) “Actively devoted to agricultural or horticultural use” means land used, under normally 6
acceptable practices, in the production of plants and animals useful to people, including, but not 7
limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral, 8
ornamental and greenhouse products, the growing of Christmas trees; dairy animals and dairy 9
products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including 10
beef cattle, swine, horses and mules; the stabling of horses; commercial breeding or grazing of any 11
or all such animals for the production of meat, milk, fiber in saleable livestock; and the production 12
of fish, shellfish, plant material and fish products through aquacultural practices. 13
(B) “Agricultural operations” means any commercial enterprise or community garden 14
enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture, 15
forestry, composting, stabling of horses, dairy farming, or aquaculture, or the raising of livestock, 16
furbearing animals, poultry, or bees. 17
(C) “Small farmer” means the principal person engaged in agricultural operations on fewer 18
than five (5) acres of land actively devoted to agricultural or horticultural use as indicated for 19
income tax purposes by filing an IRS Schedule F or equivalent. 20
(D) “Small farmland” means land totaling fewer than five (5) acres actively devoted to 21
agricultural or horticultural use in which a small farmer is the principal operator of the agricultural 22
operations on such land. 23
(E) “Under normally acceptable practices” means management of the small farmland using 24
cultivation and husbandry techniques, including, but not limited to, techniques for the proper 25
animal and plant densities and spacing, harvesting techniques, irrigation techniques, soil 26
conditioning and preservation techniques erosion control practices waste disposal techniques, cover 27
crops, and rotation cycles recommended by the university of Rhode Island, U.S. Department of 28
Agriculture, recognized producers organizations and seed and implement manufacturers for Rhode 29
Island soils and practices approved by the department of environmental management agricultural 30
advisory committee. 31
(ii) The department of environmental management shall provide to the local assessors any 32
assistance that is necessary in determining the proper application of the definitions in this 33
subsection, at the request of either the local assessor or a property owner. 34
LC001568 - Page 16 of 40
(iii) Land use change tax: 1
(A) Pursuant to § 44-5-39, real property of small farmers that has been exempt from 2
taxation pursuant to this subsection for fewer than fifteen (15) years, and the real property is no 3
longer small farmland as defined in this section, municipalities may assess additional taxes payable 4
by the then current owner on such real property in an amount not to exceed: 5
(I) Ten percent (10%) of the then fair market value of the land if the use is changed during 6
the first six (6) years of classification. 7
(II) Nine percent (9%) of the then fair market value of the land if the use is changed during 8
the seventh year of classification. 9
(III) Eight percent (8%) of the then fair market value of the land if the use is changed during 10
the eighth year of classification. 11
(IV) Seven percent (7%) of the then fair market value of the land if the use is changed 12
during the ninth year of classification. 13
(V) Six percent (6%) of the then fair market value of the land if the use is changed during 14
the tenth year of classification. 15
(VI) Five percent (5%) of the then fair market value of the land if the use is changed during 16
the eleventh year of classification. 17
(VII) Four percent (4%) of the then fair market value of the land if the use is changed 18
during the twelfth year of classification. 19
(VIII) Three percent (3%) of the then fair market value of the land if the use is changed 20
during the thirteenth year of classification. 21
(IX) Two percent (2%) of the then fair market value of the land if the use is changed during 22
the fourteenth year of classification. 23
(X) One percent (1%) of the then fair market value of the land if the use is changed during 24
the fifteenth year of classification. 25
(XI) No additional tax shall be imposed following the end of the fifteenth year of 26
classification. 27
(b) Except as provided below, when a city or town taxes a for-profit hospital facility, the 28
value of its real property shall be the value determined by the most recent full revaluation or 29
statistical property update performed by the city or town; provided, however, in the year a nonprofit 30
hospital facility converts to or otherwise becomes a for-profit hospital facility, or a for-profit 31
hospital facility is initially established, the value of the real property and personal property of the 32
for-profit hospital facility shall be determined by a valuation performed by the assessor for the 33
purpose of determining an initial assessed value of real and personal property, not previously taxed 34
LC001568 - Page 17 of 40
by the city or town, as of the most recent date of assessment pursuant to § 44-5-1, subject to a right 1
of appeal by the for-profit hospital facility which shall be made to the city or town tax assessor with 2
a direct appeal from an adverse decision to the Rhode Island superior court business calendar. 3
A “for-profit hospital facility” includes all real and personal property affiliated with any 4
hospital as identified in an application filed pursuant to chapter 17 or 17.14 of title 23. 5
Notwithstanding the above, a city or town may enter into a stabilization agreement with a for-profit 6
hospital facility under § 44-3-9 or other laws specific to the particular city or town relating to 7
stabilization agreements. In a year in which a nonprofit hospital facility converts to, or otherwise 8
becomes, a for-profit hospital facility, or a for-profit hospital facility is otherwise established, in 9
that year only the amount levied by the city or town and/or the amount payable under the 10
stabilization agreement for that year related to the for-profit hospital facility shall not be counted 11
towards determining the maximum tax levy permitted under § 44-5-2. 12
(c) Notwithstanding any other provision of law to the contrary, in an effort to provide relief 13
for businesses, including small businesses, and to promote economic development, a city, town, or 14
fire district may establish an exemption for tangible personal property within its geographic limits 15
by formal action of the appropriate governing body within the city, town, or fire district, which 16
exemptions shall be uniformly applied and in compliance with local tax classification requirements. 17
Exemptions established pursuant to this subsection shall conform to the requirements of § 44-5-18
12.2. 19
SECTION 2. Section 44-11-11 of the General Laws in Chapter 44-11 entitled "Business 20
Corporation Tax" is hereby amended to read as follows: 21
44-11-11. “Net income” defined. 22
(a)(1) “Net income” means, for any taxable year and for any corporate taxpayer, the taxable 23
income of the taxpayer for that taxable year under the laws of the United States, plus: 24
(i) Any interest not included in the taxable income; 25
(ii) Any specific exemptions; 26
(iii) The tax imposed by this chapter; 27
(iv) 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; and minus: 32
(v) Interest on obligations of the United States or its possessions, and other interest exempt 33
from taxation by this state; 34
LC001568 - Page 18 of 40
(vi) The federal net operating loss deduction; and 1
(vii) For any taxable year beginning on or after January 1, 2025, in the case of a taxpayer 2
that is licensed in accordance with chapters 28.6 and/or 28.11 of title 21, the amount equal to any 3
expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed under 4
26 U.S.C. § 280E. and; 5
(viii) Income from the production of food by urban farmers and small farmers. 6
(A) For the sole purpose of this subsection: 7
(I) “Actively devoted to agricultural or horticultural use” means land used, under normally 8
acceptable practices, in the production of plants and animals useful to people including, but not 9
limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral, 10
ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy 11
products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including 12
beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any 13
or all such animals for the production of meat, milk, fiber in saleable livestock; and the production 14
of fish, shellfish, plant material and fish products through aquacultural practices. 15
(II) “Agricultural operations” means any commercial enterprise or community garden 16
enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture, 17
forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing 18
animals, poultry, or bees. 19
(III) “Small farmer” means the principal person engaged in agricultural operations on fewer 20
than five (5) acres of land actively devoted to agricultural or horticultural use as indicated for 21
income tax purposes by filing an IRS Schedule F or equivalent. 22
(IV) “Under normally acceptable practices” means management of the urban farmland 23
using cultivation and husbandry techniques including, but not limited to, techniques for the proper 24
animal and plant densities and spacing, harvesting techniques, irrigation techniques, soil 25
conditioning and preservation techniques, erosion control practices, waste disposal techniques, 26
cover crops, and rotation cycles recommended by the university of Rhode Island, U.S. Department 27
of Agriculture, recognized producers organizations and seed and implement manufacturers for 28
Rhode Island soils and practices approved by the department of environmental management 29
agricultural advisory committee. 30
(V) “Urban area” means any municipality that is incorporated as a city or has a population 31
density greater than three thousand (3,000) residents per square mile as of the most recently 32
published U.S. Census. 33
(VI) “Urban farmer” means the principal person engaged in agricultural operations on 34
LC001568 - Page 19 of 40
urban farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent. 1
(VII) “Urban farmland” means land that is actively devoted to agricultural or horticultural 2
use in an urban area in which an urban farmer is the principal operator of the agricultural operations 3
on such land. 4
(2) All binding federal elections made by or on behalf of the taxpayer applicable either 5
directly or indirectly to the determination of taxable income shall be binding on the taxpayer except 6
where this chapter or its attendant regulations specifically modify or provide otherwise. Rhode 7
Island taxable income shall not include the “gross-up of dividends” required by the federal Internal 8
Revenue Code to be taken into taxable income in connection with the taxpayer’s election of the 9
foreign tax credit. 10
(b) A net operating loss deduction shall be allowed, which shall be the same as the net 11
operating loss deduction allowed under 26 U.S.C. § 172, except that: 12
(1) Any net operating loss included in determining the deduction shall be adjusted to reflect 13
the inclusions and exclusions from entire net income required by subsection (a) of this section and 14
§ 44-11-11.1; 15
(2) The deduction shall not include any net operating loss sustained during any taxable year 16
in which the taxpayer was not subject to the tax imposed by this chapter; and 17
(3) Limitation on 26 U.S.C. § 172 deduction. 18
(i) The deduction shall not exceed the deduction for the taxable year allowable under 26 19
U.S.C. § 172; provided, that the deduction for a taxable year may not be carried back to any other 20
taxable year for Rhode Island purposes but shall only be allowable on a carry forward basis for the 21
five (5) succeeding taxable years; and 22
(ii) For any taxable year beginning on or after January 1, 2025, the deduction shall not 23
exceed the deduction for the taxable year allowable under 26 U.S.C. § 172; provided that, the 24
deduction for a taxable year may not be carried back to any other taxable year for Rhode Island 25
purposes, but shall only be allowable on a carry forward basis for the twenty (20) succeeding 26
taxable years. 27
(c) “Domestic international sales corporations” (referred to as DISCs), for the purposes of 28
this chapter, will be treated as they are under federal income tax law and shall not pay the amount 29
of the tax computed under § 44-11-2(a). Any income to shareholders of DISCs is to be treated in 30
the same manner as it is treated under federal income tax law as it exists on December 31, 1984. 31
(d) A corporation that qualifies as a “foreign sales corporation” (FSC) under the provisions 32
of subchapter N, 26 U.S.C. § 861 et seq., and that has in effect for the entire taxable year a valid 33
election under federal law to be treated as a FSC, shall not pay the amount of the tax computed 34
LC001568 - Page 20 of 40
under § 44-11-2(a). Any income to shareholders of FSCs is to be treated in the same manner as it 1
is treated under federal income tax law as it exists on January 1, 1985. 2
(e) For purposes of a corporation’s state tax liability, any deduction to income allowable 3
under 26 U.S.C. § 1400Z-2(c) may be claimed in the case of any investment held by the taxpayer 4
for at least seven years. The division of taxation shall promulgate, in its discretion, rules and 5
regulations relative to the accelerated application of deductions under 26 U.S.C. § 1400Z-2(c). 6
SECTION 3. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and 7
Use Taxes — Liability and Computation" is hereby amended to read as follows: 8
44-18-30. Gross receipts exempt from sales and use taxes. 9
There are exempted from the taxes imposed by this chapter the following gross receipts: 10
(1) Sales and uses beyond constitutional power of state. From the sale and from the storage, 11
use, or other consumption in this state of tangible personal property the gross receipts from the sale 12
of which, or the storage, use, or other consumption of which, this state is prohibited from taxing 13
under the Constitution of the United States or under the constitution of this state. 14
(2) Newspapers. 15
(i) From the sale and from the storage, use, or other consumption in this state of any 16
newspaper. 17
(ii) “Newspaper” means an unbound publication printed on newsprint that contains news, 18
editorial comment, opinions, features, advertising matter, and other matters of public interest. 19
(iii) “Newspaper” does not include a magazine, handbill, circular, flyer, sales catalog, or 20
similar item unless the item is printed for, and distributed as, a part of a newspaper. 21
(3) School meals. From the sale and from the storage, use, or other consumption in this 22
state of meals served by public, private, or parochial schools, school districts, colleges, universities, 23
student organizations, and parent-teacher associations to the students or teachers of a school, 24
college, or university whether the meals are served by the educational institutions or by a food 25
service or management entity under contract to the educational institutions. 26
(4) Containers. 27
(i) From the sale and from the storage, use, or other consumption in this state of: 28
(A) Non-returnable containers, including boxes, paper bags, and wrapping materials that 29
are biodegradable and all bags and wrapping materials utilized in the medical and healing arts, 30
when sold without the contents to persons who place the contents in the container and sell the 31
contents with the container. 32
(B) Containers when sold with the contents if the sale price of the contents is not required 33
to be included in the measure of the taxes imposed by this chapter. 34
LC001568 - Page 21 of 40
(C) Returnable containers when sold with the contents in connection with a retail sale of 1
the contents or when resold for refilling. 2
(D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage 3
producers who place the alcoholic beverages in the containers. 4
(ii) As used in this subdivision, the term “returnable containers” means containers of a kind 5
customarily returned by the buyer of the contents for reuse. All other containers are “non-returnable 6
containers.” 7
(5)(i) Charitable, educational, and religious organizations. From the sale to, as in defined 8
in this section, and from the storage, use, and other consumption in this state, or any other state of 9
the United States of America, of tangible personal property by hospitals not operated for a profit; 10
“educational institutions” as defined in subdivision (18) not operated for a profit; churches, 11
orphanages, and other institutions or organizations operated exclusively for religious or charitable 12
purposes; interest-free loan associations not operated for profit; nonprofit, organized sporting 13
leagues and associations and bands for boys and girls under the age of nineteen (19) years; the 14
following vocational student organizations that are state chapters of national vocational student 15
organizations: Distributive Education Clubs of America (DECA); Future Business Leaders of 16
America, Phi Beta Lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers 17
of America/Home Economics Related Occupations (FHA/HERD); Vocational Industrial Clubs of 18
America (VICA); organized nonprofit golden age and senior citizens clubs for men and women; 19
and parent-teacher associations; and from the sale, storage, use, and other consumption in this state, 20
of and by the Industrial Foundation of Burrillville, a Rhode Island domestic nonprofit corporation. 21
(ii) In the case of contracts entered into with the federal government, its agencies, or 22
instrumentalities, this state, or any other state of the United States of America, its agencies, any 23
city, town, district, or other political subdivision of the states; hospitals not operated for profit; 24
educational institutions not operated for profit; churches, orphanages, and other institutions or 25
organizations operated exclusively for religious or charitable purposes, the contractor may purchase 26
such materials and supplies (materials and/or supplies are defined as those that are essential to the 27
project) that are to be utilized in the construction of the projects being performed under the contracts 28
without payment of the tax. 29
(iii) The contractor shall not charge any sales or use tax to any exempt agency, institution, 30
or organization but shall in that instance provide his or her suppliers with certificates in the form 31
as determined by the division of taxation showing the reason for exemption and the contractor’s 32
records must substantiate the claim for exemption by showing the disposition of all property so 33
purchased. If any property is then used for a nonexempt purpose, the contractor must pay the tax 34
LC001568 - Page 22 of 40
on the property used. 1
(6) Gasoline. From the sale and from the storage, use, or other consumption in this state of: 2
(i) Gasoline and other products taxed under chapter 36 of title 31 and (ii) Fuels used for the 3
propulsion of airplanes. 4
(7) Purchase for manufacturing purposes. 5
(i) From the sale and from the storage, use, or other consumption in this state of computer 6
software, tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration, and 7
water, when the property or service is purchased for the purpose of being manufactured into a 8
finished product for resale and becomes an ingredient, component, or integral part of the 9
manufactured, compounded, processed, assembled, or prepared product, or if the property or 10
service is consumed in the process of manufacturing for resale computer software, tangible personal 11
property, electricity, natural gas, artificial gas, steam, refrigeration, or water. 12
(ii) “Consumed” means destroyed, used up, or worn out to the degree or extent that the 13
property cannot be repaired, reconditioned, or rendered fit for further manufacturing use. 14
(iii) “Consumed” includes mere obsolescence. 15
(iv) “Manufacturing” means and includes: manufacturing, compounding, processing, 16
assembling, preparing, or producing. 17
(v) “Process of manufacturing” means and includes all production operations performed in 18
the producing or processing room, shop, or plant, insofar as the operations are a part of and 19
connected with the manufacturing for resale of tangible personal property, electricity, natural gas, 20
artificial gas, steam, refrigeration, or water and all production operations performed insofar as the 21
operations are a part of and connected with the manufacturing for resale of computer software. 22
(vi) “Process of manufacturing” does not mean or include administration operations such 23
as general office operations, accounting, collection, or sales promotion, nor does it mean or include 24
distribution operations that occur subsequent to production operations, such as handling, storing, 25
selling, and transporting the manufactured products, even though the administration and 26
distribution operations are performed by, or in connection with, a manufacturing business. 27
(8) State and political subdivisions. From the sale to, and from the storage, use, or other 28
consumption by, this state, any city, town, district, or other political subdivision of this state. Every 29
redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a subdivision of 30
the municipality where it is located. 31
(9) Food and food ingredients. From the sale and storage, use, or other consumption in this 32
state of food and food ingredients as defined in § 44-18-7.1(l). 33
For the purposes of this exemption “food and food ingredients” shall not include candy, 34
LC001568 - Page 23 of 40
soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending 1
machines, or prepared food, as those terms are defined in § 44-18-7.1, unless the prepared food is: 2
(i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311, 3
except sub-sector 3118 (bakeries); 4
(ii) Sold in an unheated state by weight or volume as a single item; 5
(iii) Bakery items, including: bread, rolls, buns, biscuits, bagels, croissants, pastries, 6
donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and 7
is not sold with utensils provided by the seller, including: plates, knives, forks, spoons, 8
glasses, cups, napkins, or straws. 9
(10) Medicines, drugs, and durable medical equipment. From the sale and from the storage, 10
use, or other consumption in this state, of: 11
(i) “Drugs” as defined in § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and 12
insulin whether or not sold on prescription. For purposes of this exemption drugs shall not include 13
over-the-counter drugs and grooming and hygiene products as defined in § 44-18-7.1(h)(iii). 14
(ii) Durable medical equipment as defined in § 44-18-7.1(k) for home use only, including, 15
but not limited to: syringe infusers, ambulatory drug delivery pumps, hospital beds, convalescent 16
chairs, and chair lifts. Supplies used in connection with syringe infusers and ambulatory drug 17
delivery pumps that are sold on prescription to individuals to be used by them to dispense or 18
administer prescription drugs, and related ancillary dressings and supplies used to dispense or 19
administer prescription drugs, shall also be exempt from tax. 20
(11) Prosthetic devices and mobility enhancing equipment. From the sale and from the 21
storage, use, or other consumption in this state, of prosthetic devices as defined in § 44-18-7.1(t), 22
sold on prescription, including, but not limited to: artificial limbs, dentures, spectacles, eyeglasses, 23
and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on prescription; 24
and mobility enhancing equipment as defined in § 44-18-7.1(p), including wheelchairs, crutches, 25
and canes. 26
(12) Coffins, caskets, urns, shrouds and burial garments. From the sale and from the 27
storage, use, or other consumption in this state of coffins, caskets, burial containers, urns, urn liners, 28
urn vaults, grave liners, grave vaults, burial tent setups, prayer cards, shrouds, and other burial 29
garments that are ordinarily sold by a funeral director as part of the business of funeral directing. 30
(13) Motor vehicles sold to nonresidents. 31
(i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide nonresident 32
of this state who does not register the motor vehicle in this state, whether the sale or delivery of the 33
motor vehicle is made in this state or at the place of residence of the nonresident. A motor vehicle 34
LC001568 - Page 24 of 40
sold to a bona fide nonresident whose state of residence does not allow a like exemption to its 1
nonresidents is not exempt from the tax imposed under § 44-18-20. In that event, the bona fide 2
nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that would be imposed 3
in his or her state of residence not to exceed the rate that would have been imposed under § 44-18-4
20. Notwithstanding any other provisions of law, a licensed motor vehicle dealer shall add and 5
collect the tax required under this subdivision and remit the tax to the tax administrator under the 6
provisions of chapters 18 and 19 of this title. When a Rhode Island licensed, motor vehicle dealer 7
is required to add and collect the sales and use tax on the sale of a motor vehicle to a bona fide 8
nonresident as provided in this section, the dealer in computing the tax takes into consideration the 9
law of the state of the nonresident as it relates to the trade-in of motor vehicles. 10
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may 11
require any licensed motor vehicle dealer to keep records of sales to bona fide nonresidents as the 12
tax administrator deems reasonably necessary to substantiate the exemption provided in this 13
subdivision, including the affidavit of a licensed motor vehicle dealer that the purchaser of the 14
motor vehicle was the holder of, and had in his or her possession a valid out-of-state motor vehicle 15
registration or a valid out-of-state driver’s license. 16
(iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days of 17
the date of its sale to him or her is deemed to have purchased the motor vehicle for use, storage, or 18
other consumption in this state, and is subject to, and liable for, the use tax imposed under the 19
provisions of § 44-18-20. 20
(14) Sales in public buildings by blind people. From the sale and from the storage, use, or 21
other consumption in all public buildings in this state of all products or wares by any person 22
licensed under § 40-9-11.1. 23
(15) Air and water pollution control facilities. From the sale, storage, use, or other 24
consumption in this state of tangible personal property or supplies acquired for incorporation into 25
or used and consumed in the operation of a facility, the primary purpose of which is to aid in the 26
control of the pollution or contamination of the waters or air of the state, as defined in chapter 12 27
of title 46 and chapter 23 of title 23, respectively, and that has been certified as approved for that 28
purpose by the director of environmental management. The director of environmental management 29
may certify to a portion of the tangible personal property or supplies acquired for incorporation 30
into those facilities or used and consumed in the operation of those facilities to the extent that that 31
portion has as its primary purpose the control of the pollution or contamination of the waters or air 32
of this state. As used in this subdivision, “facility” means any land, facility, device, building, 33
machinery, or equipment. 34
LC001568 - Page 25 of 40
(16) Camps. From the rental charged for living quarters, or sleeping, or housekeeping 1
accommodations at camps or retreat houses operated by religious, charitable, educational, or other 2
organizations and associations mentioned in subsection (5), or by privately owned and operated 3
summer camps for children. 4
(17) Certain institutions. From the rental charged for living or sleeping quarters in an 5
institution licensed by the state for the hospitalization, custodial, or nursing care of human beings. 6
(18) Educational institutions. From the rental charged by any educational institution for 7
living quarters, or sleeping, or housekeeping accommodations or other rooms or accommodations 8
to any student or teacher necessitated by attendance at an educational institution. “Educational 9
institution” as used in this section means an institution of learning not operated for profit that is 10
empowered to confer diplomas, educational, literary, or academic degrees; that has a regular 11
faculty, curriculum, and organized body of pupils or students in attendance throughout the usual 12
school year; that keeps and furnishes to students and others records required and accepted for 13
entrance to schools of secondary, collegiate, or graduate rank; and no part of the net earnings of 14
which inures to the benefit of any individual. 15
(19) Motor vehicle and adaptive equipment for persons with disabilities. 16
(i) From the sale of: (A) Special adaptations; (B) The component parts of the special 17
adaptations; or (C) A specially adapted motor vehicle; provided that the owner furnishes to the tax 18
administrator an affidavit of a licensed physician to the effect that the specially adapted motor 19
vehicle is necessary to transport a family member with a disability or where the vehicle has been 20
specially adapted to meet the specific needs of the person with a disability. This exemption applies 21
to not more than one motor vehicle owned and registered for personal, noncommercial use. 22
(ii) For the purpose of this subsection the term “special adaptations” includes, but is not 23
limited to: wheelchair lifts, wheelchair carriers, wheelchair ramps, wheelchair securements, hand 24
controls, steering devices, extensions, relocations, and crossovers of operator controls, power-25
assisted controls, raised tops or dropped floors, raised entry doors, or alternative signaling devices 26
to auditory signals. 27
(iii) From the sale of: (a) Special adaptations, (b) The component parts of the special 28
adaptations, for a “wheelchair accessible taxicab” as defined in § 39-14-1, and/or a “wheelchair 29
accessible public motor vehicle” as defined in § 39-14.1-1. 30
(iv) For the purpose of this subdivision the exemption for a “specially adapted motor 31
vehicle” means a use tax credit not to exceed the amount of use tax that would otherwise be due on 32
the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the special 33
adaptations, including installation. 34
LC001568 - Page 26 of 40
(20) Heating fuels. From the sale and from the storage, use, or other consumption in this 1
state of every type of heating fuel. 2
(21) Electricity and gas. From the sale and from the storage, use, or other consumption in 3
this state of electricity and gas. 4
(22) Manufacturing machinery and equipment. 5
(i) From the sale and from the storage, use, or other consumption in this state of tools, dies, 6
molds, machinery, equipment (including replacement parts), and related items to the extent used in 7
an industrial plant in connection with the actual manufacture, conversion, or processing of tangible 8
personal property, or to the extent used in connection with the actual manufacture, conversion, or 9
processing of computer software as that term is utilized in industry numbers 7371, 7372, and 7373 10
in the standard industrial classification manual prepared by the Technical Committee on Industrial 11
Classification, Office of Statistical Standards, Executive Office of the President, United States 12
Bureau of the Budget, as revised from time to time, to be sold, or that machinery and equipment 13
used in the furnishing of power to an industrial manufacturing plant. For the purposes of this 14
subdivision, “industrial plant” means a factory at a fixed location primarily engaged in the 15
manufacture, conversion, or processing of tangible personal property to be sold in the regular 16
course of business; 17
(ii) Machinery and equipment and related items are not deemed to be used in connection 18
with the actual manufacture, conversion, or processing of tangible personal property, or in 19
connection with the actual manufacture, conversion, or processing of computer software as that 20
term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification 21
manual prepared by the Technical Committee on Industrial Classification, Office of Statistical 22
Standards, Executive Office of the President, United States Bureau of the Budget, as revised from 23
time to time, to be sold to the extent the property is used in administration or distribution operations; 24
(iii) Machinery and equipment and related items used in connection with the actual 25
manufacture, conversion, or processing of any computer software or any tangible personal property 26
that is not to be sold and that would be exempt under subdivision (7) or this subdivision if purchased 27
from a vendor or machinery and equipment and related items used during any manufacturing, 28
converting, or processing function is exempt under this subdivision even if that operation, function, 29
or purpose is not an integral or essential part of a continuous production flow or manufacturing 30
process; 31
(iv) Where a portion of a group of portable or mobile machinery is used in connection with 32
the actual manufacture, conversion, or processing of computer software or tangible personal 33
property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under 34
LC001568 - Page 27 of 40
this subdivision even though the machinery in that group is used interchangeably and not otherwise 1
identifiable as to use. 2
(23) Trade-in value of motor vehicles. From the sale and from the storage, use, or other 3
consumption in this state of so much of the purchase price paid for a new or used automobile as is 4
allocated for a trade-in allowance on the automobile of the buyer given in trade to the seller, or of 5
the proceeds applicable only to the automobile as are received from the manufacturer of 6
automobiles for the repurchase of the automobile whether the repurchase was voluntary or not 7
towards the purchase of a new or used automobile by the buyer. For the purpose of this subdivision, 8
the word “automobile” means a private passenger automobile not used for hire and does not refer 9
to any other type of motor vehicle. 10
(24) Precious metal bullion. 11
(i) From the sale and from the storage, use, or other consumption in this state of precious 12
metal bullion, substantially equivalent to a transaction in securities or commodities. 13
(ii) For purposes of this subdivision, “precious metal bullion” means any elementary 14
precious metal that has been put through a process of smelting or refining, including, but not limited 15
to: gold, silver, platinum, rhodium, and chromium, and that is in a state or condition that its value 16
depends upon its content and not upon its form. 17
(iii) The term does not include fabricated precious metal that has been processed or 18
manufactured for some one or more specific and customary industrial, professional, or artistic uses. 19
(25) Commercial vessels. From sales made to a commercial ship, barge, or other vessel of 20
fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from the 21
repair, alteration, or conversion of the vessels, and from the sale of property purchased for the use 22
of the vessels including provisions, supplies, and material for the maintenance and/or repair of the 23
vessels. 24
(26) Commercial fishing vessels. From the sale and from the storage, use, or other 25
consumption in this state of vessels and other watercraft that are in excess of five (5) net tons and 26
that are used exclusively for “commercial fishing,” as defined in this subdivision, and from the 27
repair, alteration, or conversion of those vessels and other watercraft, and from the sale of property 28
purchased for the use of those vessels and other watercraft including provisions, supplies, and 29
material for the maintenance and/or repair of the vessels and other watercraft and the boats nets, 30
cables, tackle, and other fishing equipment appurtenant to or used in connection with the 31
commercial fishing of the vessels and other watercraft. “Commercial fishing” means taking or 32
attempting to take any fish, shellfish, crustacea, or bait species with the intent of disposing of it for 33
profit or by sale, barter, trade, or in commercial channels. The term does not include subsistence 34
LC001568 - Page 28 of 40
fishing, i.e., the taking for personal use and not for sale or barter; or sport fishing; but shall include 1
vessels and other watercraft with a Rhode Island party and charter boat license issued by the 2
department of environmental management pursuant to § 20-2-27.1 that meet the following criteria: 3
(i) The operator must have a current United States Coast Guard (U.S.C.G.) license to carry 4
passengers for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii) 5
U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a Rhode Island boat 6
registration to prove Rhode Island home port status; and (iv) The vessel must be used as a 7
commercial passenger carrying fishing vessel to carry passengers for fishing. The vessel must be 8
able to demonstrate that at least fifty percent (50%) of its annual gross income derives from charters 9
or provides documentation of a minimum of one hundred (100) charter trips annually; and (v) The 10
vessel must have a valid Rhode Island party and charter boat license. The tax administrator shall 11
implement the provisions of this subdivision by promulgating rules and regulations relating thereto. 12
(27) Clothing and footwear. From the sales of articles of clothing, including footwear, 13
intended to be worn or carried on or about the human body for sales prior to October 1, 2012. 14
Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including 15
footwear, intended to be worn or carried on or about the human body up to two hundred and fifty 16
dollars ($250) of the sales price per item. For the purposes of this section, “clothing or footwear” 17
does not include clothing accessories or equipment or special clothing or footwear primarily 18
designed for athletic activity or protective use as these terms are defined in § 44-18-7.1(f). In 19
recognition of the work being performed by the streamlined sales and use tax governing board, 20
upon passage of any federal law that authorizes states to require remote sellers to collect and remit 21
sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. The 22
unlimited exemption on sales of clothing and footwear shall take effect on the date that the state 23
requires remote sellers to collect and remit sales and use taxes. 24
(28) Water for residential use. From the sale and from the storage, use, or other 25
consumption in this state of water furnished for domestic use by occupants of residential premises. 26
(29) Bibles. [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see Notes 27
to Decisions.] From the sale and from the storage, use, or other consumption in the state of any 28
canonized scriptures of any tax-exempt nonprofit religious organization including, but not limited 29
to, the Old Testament and the New Testament versions. 30
(30) Boats. 31
(i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not 32
register the boat or vessel in this state or document the boat or vessel with the United States 33
government at a home port within the state, whether the sale or delivery of the boat or vessel is 34
LC001568 - Page 29 of 40
made in this state or elsewhere; provided, that the nonresident transports the boat within thirty (30) 1
days after delivery by the seller outside the state for use thereafter solely outside the state. 2
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may 3
require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents as the 4
tax administrator deems reasonably necessary to substantiate the exemption provided in this 5
subdivision, including the affidavit of the seller that the buyer represented himself or herself to be 6
a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this state. 7
(31) Youth activities equipment. From the sale, storage, use, or other consumption in this 8
state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island 9
eleemosynary organizations, for the purposes of youth activities that the organization is formed to 10
sponsor and support; and by accredited elementary and secondary schools for the purposes of the 11
schools or of organized activities of the enrolled students. 12
(32) Farm equipment. From the sale and from the storage or use of machinery and 13
equipment used directly for commercial farming and agricultural production; including, but not 14
limited to: tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors, 15
balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment, 16
greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and 17
other farming equipment, including replacement parts appurtenant to or used in connection with 18
commercial farming and tools and supplies used in the repair and maintenance of farming 19
equipment. “Commercial farming” means the keeping or boarding of five (5) or more horses or the 20
production within this state of agricultural products, including, but not limited to, field or orchard 21
crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or production 22
provides at least two thousand five hundred dollars ($2,500) in annual gross sales to the operator, 23
whether an individual, a group, a partnership, or a corporation for exemptions issued prior to July 24
1, 2002. For exemptions issued or renewed after July 1, 2002, there shall be two (2) levels. Level I 25
shall be based on proof of annual, gross sales from commercial farming of at least twenty-five 26
hundred dollars ($2,500) and shall be valid for purchases subject to the exemption provided in this 27
subdivision except for motor vehicles with an excise tax value of five thousand dollars ($5,000) or 28
greater. Level II shall be based on proof of annual gross sales from commercial farming of at least 29
ten thousand dollars ($10,000) or greater and shall be valid for purchases subject to the exemption 30
provided in this subdivision including motor vehicles with an excise tax value of five thousand 31
dollars ($5,000) or greater. For the initial issuance of the exemptions, proof of the requisite amount 32
of annual gross sales from commercial farming shall be required for the prior year; for any renewal 33
of an exemption granted in accordance with this subdivision at either level I or level II, proof of 34
LC001568 - Page 30 of 40
gross annual sales from commercial farming at the requisite amount shall be required for each of 1
the prior two (2) years. Certificates of exemption issued or renewed after July 1, 2002, shall clearly 2
indicate the level of the exemption and be valid for four (4) years after the date of issue. This 3
exemption applies even if the same equipment is used for ancillary uses, or is temporarily used for 4
a non-farming or a non-agricultural purpose, but shall not apply to motor vehicles acquired after 5
July 1, 2002, unless the vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for 6
registration displaying farm plates as provided for in § 31-3-31. 7
(i) An urban farmer is not required to meet any minimum annual, gross sales amount in 8
prior years to qualify for either Level I or Level II exemption levels. Proof of satisfying the 9
definitional requirements in this subsection shall be required. 10
(A) For the sole purposes of this subsection: 11
(I) “Actively devoted to agricultural or horticultural use” means land used, under normally 12
acceptable practices, in the production of plants and animals useful to people including, but not 13
limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral, 14
ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy 15
products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including 16
beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any 17
or all such animals for the production of meat, milk, fiber in saleable livestock; and the production 18
of fish, shellfish, plant material and fish products through aquacultural practices. 19
(II) “Agricultural operations” means any commercial enterprise or community garden 20
enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture, 21
forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing 22
animals, poultry, or bees. 23
(III) “Under normally acceptable practices” means management of the urban farmland 24
using cultivation and husbandry techniques including, but not limited to, techniques for the proper 25
animal and plant densities and spacing, harvesting techniques, irrigation techniques, soil 26
conditioning and preservation techniques, erosion control practices, waste disposal techniques, 27
cover crops, and rotation cycles recommended by the university of Rhode Island, U.S. Department 28
of Agriculture, recognized producers organizations and seed and implement manufacturers for 29
Rhode Island soils and practices approved by the department of environmental management 30
agricultural advisory committee. 31
(IV) “Urban area” means any municipality that is incorporated as a city or has a population 32
density greater than three thousand (3,000) residents per square mile as of the most recently 33
published U.S. Census. 34
LC001568 - Page 31 of 40
(V) “Urban farmer” means the principal person engaged in agricultural operations on urban 1
farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent. 2
(VI) “Urban farming” means the keeping or boarding of five (5) or more horses or the 3
production within this state of agricultural products, including, but not limited to, field or orchard 4
crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or production 5
is undertaken by an urban farmer in an urban area. 6
(VII) “Urban farmland” means land that is actively devoted to agricultural or horticultural 7
use in an urban area in which an urban farmer is the principal operator of the agricultural operations 8
on such land. 9
(33) Compressed air. From the sale and from the storage, use, or other consumption in the 10
state of compressed air. 11
(34) Flags. From the sale and from the storage, consumption, or other use in this state of 12
United States, Rhode Island or POW-MIA flags. 13
(35) Motor vehicle and adaptive equipment to certain veterans. From the sale of a motor 14
vehicle and adaptive equipment to and for the use of a veteran with a service-connected loss of or 15
the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee, whether service 16
connected or not. The motor vehicle must be purchased by and especially equipped for use by the 17
qualifying veteran. Certificate of exemption or refunds of taxes paid is granted under rules or 18
regulations that the tax administrator may prescribe. 19
(36) Textbooks. From the sale and from the storage, use, or other consumption in this state 20
of textbooks by an “educational institution,” as defined in subsection (18) of this section, and any 21
educational institution within the purview of § 16-63-9(4), and used textbooks by any purveyor. 22
(37) Tangible personal property and supplies used in on-site hazardous waste recycling, 23
reuse, or treatment. From the sale, storage, use, or other consumption in this state of tangible 24
personal property or supplies used or consumed in the operation of equipment, the exclusive 25
function of which is the recycling, reuse, or recovery of materials (other than precious metals, as 26
defined in subdivision (24)(ii) of this section) from the treatment of “hazardous wastes,” as defined 27
in § 23-19.1-4, where the “hazardous wastes” are generated in Rhode Island solely by the same 28
taxpayer and where the personal property is located at, in, or adjacent to a generating facility of the 29
taxpayer in Rhode Island. The taxpayer shall procure an order from the director of the department 30
of environmental management certifying that the equipment and/or supplies as used or consumed, 31
qualify for the exemption under this subdivision. If any information relating to secret processes or 32
methods of manufacture, production, or treatment is disclosed to the department of environmental 33
management only to procure an order, and is a “trade secret” as defined in § 28-21-10(b), it is not 34
LC001568 - Page 32 of 40
open to public inspection or publicly disclosed unless disclosure is required under chapter 21 of 1
title 28 or chapter 24.4 of title 23. 2
(38) Promotional and product literature of boat manufacturers. From the sale and from the 3
storage, use, or other consumption of promotional and product literature of boat manufacturers 4
shipped to points outside of Rhode Island that either: (i) Accompany the product that is sold; (ii) 5
Are shipped in bulk to out-of-state dealers for use in the sale of the product; or (iii) Are mailed to 6
customers at no charge. 7
(39) Food items paid for by food stamps. From the sale and from the storage, use, or other 8
consumption in this state of eligible food items payment for which is properly made to the retailer 9
in the form of U.S. government food stamps issued in accordance with the Food Stamp Act of 1977, 10
7 U.S.C. § 2011 et seq. 11
(40) Transportation charges. From the sale or hiring of motor carriers as defined in § 39-12
12-2(12) to haul goods, when the contract or hiring cost is charged by a motor freight tariff filed 13
with the Rhode Island public utilities commission on the number of miles driven or by the number 14
of hours spent on the job. 15
(41) Trade-in value of boats. From the sale and from the storage, use, or other consumption 16
in this state of so much of the purchase price paid for a new or used boat as is allocated for a trade-17
in allowance on the boat of the buyer given in trade to the seller or of the proceeds applicable only 18
to the boat as are received from an insurance claim as a result of a stolen or damaged boat, towards 19
the purchase of a new or used boat by the buyer. 20
(42) Equipment used for research and development. From the sale and from the storage, 21
use, or other consumption of equipment to the extent used for research and development purposes 22
by a qualifying firm. For the purposes of this subsection, “qualifying firm” means a business for 23
which the use of research and development equipment is an integral part of its operation and 24
“equipment” means scientific equipment, computers, software, and related items. 25
(43) Coins. From the sale and from the other consumption in this state of coins having 26
numismatic or investment value. 27
(44) Farm structure construction materials. Lumber, hardware, and other materials used in 28
the new construction of farm structures, including production facilities such as, but not limited to: 29
farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying houses, 30
fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing rooms, 31
machinery storage, seasonal farm worker housing, certified farm markets, bunker and trench silos, 32
feed storage sheds, and any other structures used in connection with commercial farming or urban 33
farming. 34
LC001568 - Page 33 of 40
(i) For the sole purposes of this subsection: 1
(A) “Actively devoted to agricultural or horticultural use” means land used, under normally 2
acceptable practices, in the production of plants and animals useful to people including, but not 3
limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral, 4
ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy 5
products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including 6
beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any 7
or all such animals for the production of meat, milk, fiber in saleable livestock; and the production 8
of fish, shellfish, plant material and fish products through aquacultural practices. 9
(B) “Agricultural operations” means any commercial enterprise or community garden 10
enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture, 11
forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing 12
animals, poultry, or bees. 13
(C) “Under normally acceptable practices” means management of the urban farmland using 14
cultivation and husbandry techniques including, but not limited to, techniques for the proper animal 15
and plant densities and spacing, harvesting techniques, irrigation techniques, soil conditioning and 16
preservation techniques, erosion control practices, waste disposal techniques, cover crops, and 17
rotation cycles recommended by the university of Rhode Island, U.S. Department of Agriculture, 18
recognized producers organizations and seed and implement manufacturers for Rhode Island soils 19
and practices approved by the department of environmental management agricultural advisory 20
committee. 21
(D) “Urban area” means any municipality that is incorporated as a city or has a population 22
density greater than three thousand (3,000) residents per square mile as of the most recently 23
published U.S. Census. 24
(E) “Urban farmer” means the principal person engaged in agricultural operations on urban 25
farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent. 26
(F) “Urban farming” means the keeping or boarding of five (5) or more horses or the 27
production within this state of agricultural products, including, but not limited to, field or orchard 28
crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or production 29
is undertaken by an urban farmer in an urban area. 30
(G) “Urban farmland” means land that is actively devoted to agricultural or horticultural 31
use in an urban area in which an urban farmer is the principal operator of the agricultural operations 32
on such land. 33
(45) Telecommunications carrier access service. Carrier access service or 34
LC001568 - Page 34 of 40
telecommunications service when purchased by a telecommunications company from another 1
telecommunications company to facilitate the provision of telecommunications service. 2
(46) Boats or vessels brought into the state exclusively for winter storage, maintenance, 3
repair, or sale. Notwithstanding the provisions of §§ 44-18-10, 44-18-11 and 44-18-20, the tax 4
imposed by § 44-18-20 is not applicable for the period commencing on the first day of October in 5
any year up to and including the 30th day of April next succeeding with respect to the use of any 6
boat or vessel within this state exclusively for purposes of: (i) Delivery of the vessel to a facility in 7
this state for storage, including dry storage and storage in water by means of apparatus preventing 8
ice damage to the hull, maintenance, or repair; (ii) The actual process of storage, maintenance, or 9
repair of the boat or vessel; or (iii) Storage for the purpose of selling the boat or vessel. 10
(47) Jewelry display product. From the sale and from the storage, use, or other consumption 11
in this state of tangible personal property used to display any jewelry product; provided that title to 12
the jewelry display product is transferred by the jewelry manufacturer or seller and that the jewelry 13
display product is shipped out of state for use solely outside the state and is not returned to the 14
jewelry manufacturer or seller. 15
(48) Boats or vessels generally. Notwithstanding the provisions of this chapter, the tax 16
imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage, 17
use, or other consumption in this state of any new or used boat. The exemption provided for in this 18
subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal ten 19
percent (10%) surcharge on luxury boats is repealed. 20
(49) Banks and regulated investment companies interstate toll-free calls. Notwithstanding 21
the provisions of this chapter, the tax imposed by this chapter does not apply to the furnishing of 22
interstate and international, toll-free terminating telecommunication service that is used directly 23
and exclusively by or for the benefit of an eligible company as defined in this subdivision; provided 24
that an eligible company employs on average during the calendar year no less than five hundred 25
(500) “full-time equivalent employees” as that term is defined in § 42-64.5-2. For purposes of this 26
section, an “eligible company” means a “regulated investment company” as that term is defined in 27
the Internal Revenue Code of 1986, 26 U.S.C. § 851, or a corporation to the extent the service is 28
provided, directly or indirectly, to or on behalf of a regulated investment company, an employee 29
benefit plan, a retirement plan or a pension plan, or a state-chartered bank. 30
(50) Mobile and manufactured homes generally. From the sale and from the storage, use, 31
or other consumption in this state of mobile and/or manufactured homes as defined and subject to 32
taxation pursuant to the provisions of chapter 44 of title 31. 33
(51) Manufacturing business reconstruction materials. 34
LC001568 - Page 35 of 40
(i) From the sale and from the storage, use, or other consumption in this state of lumber, 1
hardware, and other building materials used in the reconstruction of a manufacturing business 2
facility that suffers a disaster, as defined in this subdivision, in this state. “Disaster” means any 3
occurrence, natural or otherwise, that results in the destruction of sixty percent (60%) or more of 4
an operating manufacturing business facility within this state. “Disaster” does not include any 5
damage resulting from the willful act of the owner of the manufacturing business facility. 6
(ii) Manufacturing business facility includes, but is not limited to, the structures housing 7
the production and administrative facilities. 8
(iii) In the event a manufacturer has more than one manufacturing site in this state, the sixty 9
percent (60%) provision applies to the damages suffered at that one site. 10
(iv) To the extent that the costs of the reconstruction materials are reimbursed by insurance, 11
this exemption does not apply. 12
(52) Tangible personal property and supplies used in the processing or preparation of floral 13
products and floral arrangements. From the sale, storage, use, or other consumption in this state of 14
tangible personal property or supplies purchased by florists, garden centers, or other like producers 15
or vendors of flowers, plants, floral products, and natural and artificial floral arrangements that are 16
ultimately sold with flowers, plants, floral products, and natural and artificial floral arrangements 17
or are otherwise used in the decoration, fabrication, creation, processing, or preparation of flowers, 18
plants, floral products, or natural and artificial floral arrangements, including descriptive labels, 19
stickers, and cards affixed to the flower, plant, floral product, or arrangement, artificial flowers, 20
spray materials, floral paint and tint, plant shine, flower food, insecticide, and fertilizers. 21
(53) Horse food products. From the sale and from the storage, use, or other consumption 22
in this state of horse food products purchased by a person engaged in the business of the boarding 23
of horses. 24
(54) Non-motorized recreational vehicles sold to nonresidents. 25
(i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to 26
a bona fide nonresident of this state who does not register the non-motorized recreational vehicle 27
in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this 28
state or at the place of residence of the nonresident; provided that a non-motorized recreational 29
vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption to 30
its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in 31
that event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate 32
that would be imposed in his or her state of residence not to exceed the rate that would have been 33
imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed, non-motorized 34
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recreational vehicle dealer shall add and collect the tax required under this subdivision and remit 1
the tax to the tax administrator under the provisions of chapters 18 and 19 of this title. Provided, 2
that when a Rhode Island licensed, non-motorized recreational vehicle dealer is required to add and 3
collect the sales and use tax on the sale of a non-motorized recreational vehicle to a bona fide 4
nonresident as provided in this section, the dealer in computing the tax takes into consideration the 5
law of the state of the nonresident as it relates to the trade-in of motor vehicles. 6
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may 7
require any licensed, non-motorized recreational vehicle dealer to keep records of sales to bona fide 8
nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption 9
provided in this subdivision, including the affidavit of a licensed, non-motorized recreational 10
vehicle dealer that the purchaser of the non-motorized recreational vehicle was the holder of, and 11
had in his or her possession a valid out-of-state non-motorized recreational vehicle registration or 12
a valid out-of-state driver’s license. 13
(iii) Any nonresident who registers a non-motorized recreational vehicle in this state within 14
ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-motorized 15
recreational vehicle for use, storage, or other consumption in this state, and is subject to, and liable 16
for, the use tax imposed under the provisions of § 44-18-20. 17
(iv) “Non-motorized recreational vehicle” means any portable dwelling designed and 18
constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use 19
that is eligible to be registered for highway use, including, but not limited to, “pick-up coaches” or 20
“pick-up campers,” “travel trailers,” and “tent trailers” as those terms are defined in chapter 1 of 21
title 31. 22
(55) Sprinkler and fire alarm systems in existing buildings. From the sale in this state of 23
sprinkler and fire alarm systems; emergency lighting and alarm systems; and the materials 24
necessary and attendant to the installation of those systems that are required in buildings and 25
occupancies existing therein in July 2003 in order to comply with any additional requirements for 26
such buildings arising directly from the enactment of the Comprehensive Fire Safety Act of 2003 27
and that are not required by any other provision of law or ordinance or regulation adopted pursuant 28
to that act. The exemption provided in this subdivision shall expire on December 31, 2008. 29
(56) Aircraft. Notwithstanding the provisions of this chapter, the tax imposed by §§ 44-18-30
18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or other consumption 31
in this state of any new or used aircraft or aircraft parts. 32
(57) Renewable energy products. Notwithstanding any other provisions of Rhode Island 33
general laws, the following products shall also be exempt from sales tax: solar photovoltaic 34
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modules or panels, or any module or panel that generates electricity from light; solar thermal 1
collectors, including, but not limited to, those manufactured with flat glass plates, extruded plastic, 2
sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-water and 3
water-to-air type pumps; wind turbines; towers used to mount wind turbines if specified by or sold 4
by a wind turbine manufacturer; DC to AC inverters that interconnect with utility power lines; and 5
manufactured mounting racks and ballast pans for solar collector, module, or panel installation. Not 6
to include materials that could be fabricated into such racks; monitoring and control equipment, if 7
specified or supplied by a manufacturer of solar thermal, solar photovoltaic, geothermal, or wind 8
energy systems or if required by law or regulation for such systems but not to include pumps, fans 9
or plumbing or electrical fixtures unless shipped from the manufacturer affixed to, or an integral 10
part of, another item specified on this list; and solar storage tanks that are part of a solar domestic 11
hot water system or a solar space heating system. If the tank comes with an external heat exchanger 12
it shall also be tax exempt, but a standard hot water tank is not exempt from state sales tax. 13
(58) Returned property. The amount charged for property returned by customers upon 14
rescission of the contract of sale when the entire amount exclusive of handling charges paid for the 15
property is refunded in either cash or credit, and where the property is returned within one hundred 16
twenty (120) days from the date of delivery. 17
(59) Dietary supplements. From the sale and from the storage, use, or other consumption 18
of dietary supplements as defined in § 44-18-7.1(l)(v), sold on prescriptions. 19
(60) Blood. From the sale and from the storage, use, or other consumption of human blood. 20
(61) Agricultural products for human consumption. From the sale and from the storage, 21
use, or other consumption of livestock and poultry of the kinds of products that ordinarily constitute 22
food for human consumption and of livestock of the kind the products of which ordinarily constitute 23
fibers for human use. 24
(62) Diesel emission control technology. From the sale and use of diesel retrofit technology 25
that is required by § 31-47.3-4. 26
(63) Feed for certain animals used in commercial farming. From the sale of feed for animals 27
as described in subsection (61) of this section. 28
(64) Alcoholic beverages. From the sale and storage, use, or other consumption in this state 29
by a Class A licensee of alcoholic beverages, as defined in § 44-18-7.1, excluding beer and malt 30
beverages; provided, further, notwithstanding § 6-13-1 or any other general or public law to the 31
contrary, alcoholic beverages, as defined in § 44-18-7.1, shall not be subject to minimum markup. 32
(65) Seeds and plants used to grow food and food ingredients. From the sale, storage, use, 33
or other consumption in this state of seeds and plants used to grow food and food ingredients as 34
LC001568 - Page 38 of 40
defined in § 44-18-7.1(l)(i). “Seeds and plants used to grow food and food ingredients” shall not 1
include marijuana seeds or plants. 2
(66) Feminine hygiene products. From the sale and from the storage, use, or other 3
consumption of tampons, panty liners, menstrual cups, sanitary napkins, and other similar products 4
the principal use of which is feminine hygiene in connection with the menstrual cycle. 5
(67) “Breast pump collection and storage supplies” means items of tangible personal 6
property used in conjunction with a breast pump to collect milk expressed from a human breast and 7
to store collected milk until it is ready for consumption. “Breast pump collection and storage 8
supplies” include, but are not limited to, breast shields and breast shield connectors; breast pump 9
tubes and tubing adaptors; breast pump valves and membranes; backflow protectors and backflow 10
protector adaptors; bottles and bottle caps specific to the operation of the breast pump; breast milk 11
storage bags; and related items sold as part of a breast pump kit pre-packaged by the breast pump 12
manufacturer. “Breast pump collection and storage supplies” does not include: bottles and bottle 13
caps not specific to the operation of the breast pump; breast pump travel bags and other similar 14
carrying accessories, including ice packs, labels, and other similar products, unless sold as part of 15
a breast pump kit pre-packed by the breast pump manufacturer; breast pump cleaning supplies, 16
unless sold as part of a breast pump kit pre-packaged by the breast pump manufacturer; nursing 17
bras, bra pads, breast shells, and other similar products; and creams, ointments, and other similar 18
products that relieve breastfeeding-related symptoms or conditions of the breasts or nipples. 19
(68) Trade-in value of motorcycles. From the sale and from the storage, use, or other 20
consumption in this state of so much of the purchase price paid for a new or used motorcycle as is 21
allocated for a trade-in allowance on the motorcycle of the buyer given in trade to the seller, or of 22
the proceeds applicable only to the motorcycle as are received from the manufacturer of 23
motorcycles for the repurchase of the motorcycle whether the repurchase was voluntary or not 24
towards the purchase of a new or used motorcycle by the buyer. For the purpose of this subsection, 25
the word “motorcycle” means a motorcycle not used for hire and does not refer to any other type 26
of motor vehicle. 27
(69) From the sale and from the storage, use, or other consumption in this state of farm 28
products used to grow food by urban farmers and small farmers. 29
(i) For the sole purposes of this subsection: 30
(A) “Actively devoted to agricultural or horticultural use” means land used, under normally 31
acceptable practices, in the production of plants and animals useful to people including, but not 32
limited to: forages and sod; fruits of all kinds including nuts, berries, grapes and vegetables; floral, 33
ornamental and greenhouse products; the growing of Christmas trees; dairy animals and dairy 34
LC001568 - Page 39 of 40
products; poultry and poultry products; sheep and sheep products; beekeeping; livestock including 1
beef cattle, swine, horses and mules; stabling of horses; the commercial breeding or grazing of any 2
or all such animals for the production of meat, milk, fiber in saleable livestock; and the production 3
of fish, shellfish, plant material and fish products through aquacultural practices. 4
(B) “Agricultural operations” means any commercial enterprise or community garden 5
enterprise which has as its primary purpose horticulture, viticulture, viniculture, floriculture, 6
forestry, composting, stabling of horses, dairy farming, aquaculture, raising of livestock, furbearing 7
animals, poultry, or bees. 8
(C) “Small farmer” means the principal person engaged in agricultural operations on fewer 9
than five (5) acres of land actively devoted to agricultural or horticultural use as indicated for 10
income tax purposes by filing an IRS Schedule F or equivalent. 11
(D) “Small farmland” means land totaling fewer than five (5) acres actively devoted to 12
agricultural or horticultural use in which a small farmer is the principal operator of the agricultural 13
operations on such land. 14
(E) “Under normally acceptable practices” means management of the urban farmland using 15
cultivation and husbandry techniques including, but not limited to, techniques for the proper animal 16
and plant densities and spacing, harvesting techniques, irrigation techniques, soil conditioning and 17
preservation techniques, erosion control practices, waste disposal techniques, cover crops, and 18
rotation cycles recommended by the university of Rhode Island, U.S. Department of Agriculture, 19
recognized producers organizations and seed and implement manufacturers for Rhode Island soils 20
and practices approved by the department of environmental management agricultural advisory 21
committee. 22
(F) “Urban area” means any municipality that is incorporated as a city or has a population 23
density greater than three thousand (3,000) residents per square mile as of the most recently 24
published U.S. Census. 25
(G) “Urban farmer” means the principal person engaged in agricultural operations on urban 26
farmland as indicated for income tax purposes by filing an IRS Schedule F or equivalent. 27
(H) “Urban farmland” means land that is actively devoted to agricultural or horticultural 28
use in an urban area in which an urban farmer is the principal operator of the agricultural operations 29
on such land. 30
SECTION 4. This act shall take effect upon passage. 31
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION
***
This act would exempt certain urban and small farmers from sales taxes, real, tangible and 1
personal property taxes and income taxes. This act would also define urban and small farmers and 2
urban farmland. 3
This act would take effect upon passage. 4
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