Bill
HB 5535
HB 5535 restates and clarifies Rhode Island’s sales and use tax exemptions, defining which gross receipts and entities qualify for exemptions.
Title: AN ACT RELATING TO TAXATION — SALES AND USE TAXES — LIABILITY AND COMPUTATION
Bill No.: HB 5535 (2025) — companion: SB 2865
Status (most recent): 05/13/2025 — Committee recommended measure be held for further study
Introduced: (bill text) Feb. 13, 2025; (filed) Mar. 14, 2025
Referred to: House Finance (also listed in actions to Pensions, Investments & Financial Services; Energy & Technology)
Purpose
- HB 5535 proposes to amend Rhode Island General Laws § 44-18-30, which lists gross receipts that are exempt from the state sales and use taxes. The bill restates and clarifies a series of exemptions and provides statutory definitions and rules governing those exemptions.
Key provisions (from provided text — partial; bill text truncated)
- Section being amended: 44-18-30 — “Gross receipts exempt from sales and use taxes.”
- Enumerated exemptions included in the available text:
1. Sales/uses the state is constitutionally prohibited from taxing.
2. Newspapers — defined as unbound newsprint publications containing news, editorial content and advertising; magazines, handbills, flyers, sales catalogs excluded unless distributed as part of a newspaper.
3. School meals — meals served by public, private, parochial schools, colleges/universities, student organizations, and PTAs to students or teachers (including meals served by contracted food-service providers).
4. Containers — detailed rules for non-returnable vs. returnable containers; exemptions for containers sold without contents, containers sold with contents when contents’ price is excluded from tax base, returnable containers resold for refilling; keg and barrel containers sold to alcoholic beverage producers.
5. Charitable/educational/religious organizations — exemptions for hospitals not-for-profit; educational institutions (per subdivision (18)); churches, orphanages, nonprofit associations and a specified list of nonprofit youth and vocational groups; parent-teacher organizations; a named nonprofit (Industrial Foundation of Burrillville). Also addresses contractor purchases for government or exempt entities and requirement to provide exemption certificates; tax liability if property is used for a nonexempt purpose.
6. Gasoline and certain aviation fuels (products taxed under chapter 36 of title 31 and fuels used for airplane propulsion).
7. Purchases for manufacturing — exemptions for computer software, tangible personal property, utilities (electricity, natural gas, steam, refrigeration, water) when they become ingredients/components of a product for resale or are consumed in the manufacturing process. The bill defines “consumed,” “manufacturing,” and “process of manufacturing,” and excludes administrative and distribution operations from the manufacturing process.
Affected parties
- Retailers and sellers of tangible personal property
- Educational institutions, schools, colleges, student groups, PTAs
- Nonprofit, religious, and charitable organizations named or covered
- Manufacturers and contractors (especially those performing government or exempt-entity contracts)
- Newspapers and print distributors
- Alcoholic beverage producers (re: container exemptions)
- Fuel purchasers for aircraft and entities buying gasoline products
Potential impacts
- Clarifies and codifies specific exemptions and definitions, which may reduce ambiguity for businesses and exempt organizations.
- May lower tax liabilities for entities and transactions listed, depending on whether the bill expands, narrows, or simply clarifies existing exemptions (the provided text appears to restate and define exemptions but is incomplete).
- Administrative effects: requires contractors to maintain records and exemption certificates; potential compliance and audit implications.
- Fiscal impact not specified in the text provided; any revenue effect would depend on whether the bill expands current exemptions.
Procedural notes
- Read first time 04/07/2025; referred to committee; scheduled hearing 05/09/2025 and on 05/13/2025 the committee recommended the measure be held for further study. No further floor action recorded as of 05/13/2025.
Note
- The uploaded bill text is truncated (page 3 of 19). This summary covers the portions of § 44-18-30 included in the available version. The full bill may contain additional exemptions, definitions, or technical changes beyond those summarized here.
Compiled from official sources — confirm details with the bill’s official record.
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