AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND COMMERCE CORPORATION (Establishes property, tangible, sales and use tax exemptions as incentives for the location of qualified data centers in Rhode Island.)

S2346

2026 -- S 2346
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LC004263
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
____________
A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND COMMERCE
CORPORATION

Introduced By:
Senators DiPalma, Ciccone, Britto, Gallo, and Urso

Date Introduced:
January 30, 2026

Referred To:
Senate Commerce
It is enacted by the General Assembly as follows:
1
SECTION 1. Section 42-64-3 of the General Laws in Chapter 42-64 entitled "Rhode Island
2
Commerce Corporation" is hereby amended to read as follows:
3

42-64-3. Definitions.
4
As used in this chapter, the following words and terms shall have the following meanings,
5
unless the context indicates another or different meaning or intent:
6
(1) “Administrative penalty” means a monetary penalty not to exceed the civil penalty
7
specified in § 42-64-9.2.
8
(2) “Airport facility” means developments consisting of runways, hangars, control towers,
9
ramps, wharves, bulkheads, buildings, structures, parking areas, improvements, facilities, or other
10
real or personal property necessary, convenient, or desirable for the landing, taking off,
11
accommodation, and servicing of aircraft of all types, operated by carriers engaged in the
12
transportation of passengers or cargo, or for the loading, unloading, interchange, or transfer of the
13
passengers or their baggage, or the cargo, or otherwise for the accommodation, use or convenience
14
of the passengers or the carriers or their employees (including related facilities and
15
accommodations at sites removed from landing fields and other landing areas), or for the landing,
16
taking off, accommodation, and servicing of aircraft owned or operated by persons other than
17
carriers. It also means facilities providing access to an airport facility, consisting of rail, rapid
18
transit, or other forms of mass transportation which furnish a connection between the air terminal

1
and other points within the state, including appropriate mass transportation terminal facilities at
2
and within the air terminal itself and suitable offsite facilities for the accommodation of air
3
passengers, baggage, mail, express, freight, and other users of the connecting facility.
4
(3) “BOCA code” means the BOCA basic building code published by building officials &
5
code administrators international, inc., as the code may from time to time be promulgated by the
6
building officials & code administrators international, inc.
7
(4) “Bonds” and “notes” means the bonds, notes, securities, or other obligations or
8
evidences of indebtedness issued by the corporation pursuant to this chapter, all of which shall be
9
issued under the name of and known as obligations of the “Rhode Island commerce corporation.”
10
(5) “Civic facility” means any real or personal property designed and intended for the
11
purpose of providing facilities for educational, cultural, community, or other civic purposes.
12
(6)
“Colocation tenant” means a person that contracts with the owner or operator of a
13
qualified data center to use or occupy all or part of a qualified data center for a period of at least
14
two (2) years.
15

(7)
“Compliance schedule” means a schedule of remedial measures including an
16
enforceable sequence of actions or operations leading to compliance with an effluent limitation or
17
any other limitation, prohibition, or standard.
18

(7)
(8)
“Corporation,” “port authority,” or “authority” means the governmental agency and
19
public instrumentality, formerly known as the “Rhode Island port authority and economic
20
development corporation” and/or also formerly known as the “Rhode Island economic development
21
corporation,” and now known as the Rhode Island commerce corporation authorized, created, and
22
established pursuant to § 42-64-4, or any subsidiary corporation thereof which is established
23
pursuant to § 42-64-7.1.
24

(8)
(9)
“Director” means the executive director of the economic development corporation
25
until such time that the secretary of commerce is appointed. Upon the appointment of a secretary
26
of commerce, “Director” means the chief executive officer of the Rhode Island commerce
27
corporation, who shall also be the secretary of the Rhode Island executive office of commerce.
28

(10) “Eligible qualified data center costs” means expenditures made for the development,
29
acquisition, construction, rehabilitation, including wages pursuant to § 39-26.9-5 for any direct and
30
indirect qualified licensed labor for construction and installation of data center equipment,
31
renovation, repair or operation of a facility to be used as a qualified data center, including the cost
32
of land (including land for required parking and regulatory setbacks), buildings, site
33
characterization and assessment, engineering services, design services and data center equipment
34
acquisitions. “Eligible qualified data center costs” does not include expenditures made in

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connection with real or personal property that is located outside the boundaries of the facility.
2

(11) “Enterprise information technology equipment” means:
3

(i) Hardware that support computing, networking or data storage functions, including
4
servers and routers;
5

(ii) Networking systems equipment that support computing, networking or data storage
6
functions and have an industry designation as equipment within the enterprise class or data center
7
class of networking systems; and
8

(iii) Generators and other equipment used to ensure an uninterrupted power supply for the
9
hardware and networking systems equipment.
10

(12) “Facility” means one or more contiguous tracts of land in the state and any structure
11
and personal property contained on such land.
12

(9)
(13)
“Federal land” means real property within the state, now acquired or hereafter
13
acquired by the Rhode Island commerce corporation which was formerly owned by the United
14
States government, or any agency or instrumentality thereof, including without limiting the
15
generality of the foregoing, any and all real property now or formerly owned or used by the United
16
States government in the towns of North Kingstown, Portsmouth, Middletown, and Charlestown
17
and the city of Newport as military installations or for other purposes related to the national defense.
18
Without limiting the generality of the foregoing, federal land shall also mean and include certain
19
land in the town of North Kingstown, or any portion thereof, which has or shall revert to the state
20
pursuant to the provisions of Public Laws 1939, chapter 696 and is now or hereafter acquired by
21
the corporation from the state.
22

(10)
(14)
“Industrial facility” means any real or personal property, the demolition, removal,
23
relocation, acquisition, expansion, modification, alteration, or improvement of existing buildings,
24
structures, or facilities, the construction of new buildings, structures, or facilities, the replacement,
25
acquisition, modification, or renovation of existing machinery and equipment, or the acquisition of
26
new machinery and equipment, or any combination of the United States, which shall be suitable
27
for manufacturing, research, production, processing, agriculture, and marine commerce, or
28
warehousing; or convention centers, trade centers, exhibition centers, or offices (including offices
29
for the government of the United States or any agency, department, board, bureau, corporation, or
30
other instrumentality of the United States, or for the state or any state agency, or for any
31
municipality); or facilities for other industrial, commercial, or business purposes of every type and
32
description; and facilities appurtenant or incidental to the foregoing, including headquarters or
33
office facilities, whether or not at the location of the remainder of the facility, warehouses,
34
distribution centers, access roads, sidewalks, utilities, railway sidings, trucking, and similar

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facilities, parking areas, waterways, dockage, wharfage, and other improvements necessary or
2
convenient for the construction, development, maintenance, and operation of those facilities.
3

(11)
(15)
“Local governing body” means any town or city council, commission, or other
4
elective governing body now or hereafter vested by state statute, charter, or other law, with
5
jurisdiction to initiate and adopt local ordinances, whether or not these local ordinances require the
6
approval of the elected or appointed chief executive officer or other official or body to become
7
effective.
8

(12)
(16)
“Local redevelopment corporation” means any agency or corporation created and
9
existing pursuant to the provisions of chapter 31 of title 45.
10

(13)
(17)
“Municipality” means any city or town within the state now existing or hereafter
11
created, or any state agency.
12

(18) “Operator” means a person that contracts with the owner of a qualified data center to
13
operate such a qualified data center.
14

(19) “Owner” means a person that holds a leasehold estate in excess of fifty (50) years or
15
a fee title to a facility.
16

(14)
(20)
“Parent corporation” means, when used in connection with a subsidiary
17
corporation established pursuant to § 42-64-7.1, the governmental agency and public
18
instrumentality created and established pursuant to § 42-64-4.
19

(21) “Person” means an individual, an estate, a trust, a receiver, a cooperative association,
20
a corporation, a company, a firm, a partnership, a limited partnership, a limited liability company,
21
a limited liability partnership or a joint venture.
22

(15)
(22)
“Personal property” means all tangible personal property, new or used, including,
23
without limiting the generality of the foregoing, all machinery, equipment, transportation
24
equipment, ships, aircraft, railroad rolling stock, locomotives, pipelines, and all other things and
25
rights usually included within that term. “Personal property” also means and includes any and all
26
interests in the property which are less than full title, such as leasehold interests, security interests,
27
and every other interest or right, legal or equitable.
28

(16)
(23)
“Pollutant” means any material or effluent which may alter the chemical, physical,
29
biological or radiological characteristics or integrity of water, including but not limited to, dredged
30
spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge, munitions, chemical
31
wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, cellar
32
dirt, or industrial, municipal, agricultural or other waste petroleum or petroleum products,
33
including, but not limited to, oil.
34

(17)
(24)
“Pollution” means the discharge of any gaseous, liquid, or solid substance or

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combination thereof (including noise) into the air, water, or land which affects the physical,
2
chemical, or biological properties (including temperature) of the air, water, or land in a manner or
3
to an extent which renders or is likely to render the air, water, or land harmful or inimical to the
4
public health, safety, or welfare, or to animal, bird, or aquatic life, or to the use of the air or water
5
for domestic, industrial, or agricultural purposes or recreation including the man-made or man-
6
induced alteration of the chemical, physical, biological or radiological integrity of water.
7

(18)
(25)
“Pollution control facility” means any land or interest in land, the demolition,
8
removal, relocation, acquisition, expansion, modification, alteration, or improvement of existing
9
buildings, structures, or facilities, the construction of new buildings, structures, or facilities, the
10
replacement, modification, or renovation of existing machinery and equipment, or the acquisition
11
of new machinery and equipment, or any combination thereof, having to do with or the purpose of
12
which is the abatement, control, or prevention of pollution, including industrial pollution, and all
13
real and personal property incidental to that facility.
14

(19)
(26)
“Port facility” means harbors, ports, and all real and personal property used in
15
connection therewith, including, but not limited to, waterways, channels, wharves, docks, yards,
16
bulkheads, slips, basins, pipelines, ships, boats, railroads, trucks, and other motor vehicles, aircraft,
17
parking areas, shipyards, piers, quays, elevators, compressors, loading and unloading facilities,
18
storage facilities, and warehouses of every type, buildings and facilities used in the manufacturing,
19
processing, assembling, storing, or handling of any produce or products, other structures and
20
facilities necessary for the convenient use of the harbors and seaports, including dredged
21
approaches, railways, railroad terminals, side tracks, airports, roads, highways, tunnels, viaducts,
22
bridges, and other approaches, useful in connection therewith, and any other shipping or
23
transportation facility useful in the operation of a port or harbor.
24

(20)
(27)
“Project” or “port project” means the acquisition, ownership, operation,
25
construction, reconstruction, rehabilitation, improvement, development, sale, lease, or other
26
disposition of, or the provision of financing for, any real or personal property (by whomever owned)
27
or any interests in real or personal property, including without limiting the generality of the
28
foregoing, any port facility, recreational facility, industrial facility, airport facility, pollution control
29
facility, utility facility, solid waste disposal facility, civic facility, residential facility, water supply
30
facility, energy facility or renewable energy facility, or any other facility, or any combination of
31
two (2) or more of the foregoing, or any other activity undertaken by the corporation.
32

(21)
(28)
“Project cost” means the sum total of all costs incurred by the Rhode Island
33
commerce corporation in carrying out all works and undertakings, which the corporation deems
34
reasonable and necessary for the development of a project. These shall include, but are not

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necessarily limited to, the costs of all necessary studies, surveys, plans, and specifications,
2
architectural, engineering, or other special services, acquisition of land and any buildings on the
3
land, site preparation and development, construction, reconstruction, rehabilitation, improvement,
4
and the acquisition of any machinery and equipment or other personal property as may be deemed
5
necessary in connection with the project (other than raw materials, work in process, or stock in
6
trade); the necessary expenses incurred in connection with the initial occupancy of the project; an
7
allocable portion of the administrative and operating expenses of the corporation; the cost of
8
financing the project, including interest on all bonds and notes issued by the corporation to finance
9
the project from the date thereof to one year from the date when the corporation shall deem the
10
project substantially occupied; and the cost of those other items, including any indemnity or surety
11
bonds and premiums on insurance, legal fees, real estate brokers and agent fees, fees and expenses
12
of trustees, depositories, and paying agent for bonds and notes issued by the Rhode Island
13
commerce corporation, including reimbursement to any project user for any expenditures as may
14
be allowed by the corporation (as would be costs of the project under this section had they been
15
made directly by the corporation), and relocation costs, all as the corporation shall deem necessary.
16

(22)
(29)
“Project user” means the person, company, corporation, partnership, or
17
commercial entity, municipality, state, or United States of America who shall be the user of, or
18
beneficiary of, a port project.
19

(30) “Qualified data center” means a facility that is developed, acquired, constructed,
20
rehabilitated, renovated, repaired or operated, to house a group of networked computer services in
21
one physical location or multiple contiguous locations to centralize the storage, management and
22
dissemination of data and information pertaining to a particular business or classification or body
23
of knowledge and meets the following criteria by the sixth anniversary of the certification pursuant
24
to § 42-64-43(c)(i):
25

(i) The owner or operator makes a qualified investment of at least:
26

(A) Two hundred million dollars ($200,000,000) if the data center is located in an
27
enterprise zone designated pursuant to chapter 64.3 of title 42 (“distressed areas economic
28
revitalization act”) or a federal qualified opportunity zone designated pursuant to the Tax Cuts and
29
Jobs Act of 2017, Pub. L. 115-97, as amended from time to time; or
30

(B) Four hundred million dollars ($400,000,000) if the data center is not located in an
31
enterprise zone designated pursuant to chapter 64.3 of title 42 (“distressed areas economic
32
revitalization act”) or a federal qualified opportunity zone designated pursuant to the Tax Cuts and
33
Jobs Act of 2017, Pub. L. 115-97, as amended from time to time;
34

(ii) The owner or operator expends a minimum of thirty million dollars ($30,000,000) on

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direct and/or indirect labor and this requirement shall be satisfied by work physically occurring at
2
the facility; and
3

(iii) The owner or operator shall invest at least ten million dollars ($10,000,000) in a
4
renewable energy resource, as defined in § 39-26-5, or an energy storage system, as defined in §
5
39-33-1(2), located in the state.
6

(31) “Qualified data center equipment” means computer equipment, software and hardware
7
purchased or leased for the processing, storage, retrieval or communication of data, utilized at a
8
qualified data center, including:
9

(i) Computer servers, routers, connections, chassis, networking equipment, switches,
10
racking, fiber optics and copper cables, trays, conduits and other enabling machinery, equipment
11
and hardware, regardless of whether such personal property is affixed to or incorporated into real
12
property;
13

(ii) Equipment used in the operation of computer equipment or software for the benefit of
14
a qualified data center, including component parts, replacement parts and upgrades, regardless of
15
whether the personal property is affixed to or incorporated into real property;
16

(iii) Equipment necessary to the transformation, generation, distribution or management of
17
electricity that is required to operate computer servers and related equipment, including substations,
18
generators, uninterrupted energy equipment, supplies, conduits, fuel piping and storage, cabling,
19
duct banks, switches, switchboards, batteries and testing equipment;
20

(iv) Equipment necessary to cool and maintain a controlled environment for the operation
21
of computer servers and other equipment of a qualified data center, including chillers, mechanical
22
equipment, refrigerant piping, fuel piping and storage, adiabatic and free cooling systems, cooling
23
towers, water softeners, air handling units, indoor direct exchange units, fans, ducting and filters;
24

(v) Water conservation systems, including equipment designated to collect, conserve and
25
reuse water;
26

(vi) Conduit, ducting and fiber optic and copper cables located outside the qualified data
27
center, that are directly related to connecting one or more qualified data center locations;
28

(vii) Monitoring equipment and security systems;
29

(viii) Modular data centers and preassembled components of any item described in this
30
subsection, including components used in the manufacturing of modular data centers; and
31

(ix) Any other personal property, exclusive of motor vehicles, that is essential to the
32
operations of a qualified data center or that is acquired for incorporation into or used or consumed
33
in the operation of the qualified data center.
34

(32) “Qualified investment” means the aggregate, nonduplicative eligible data center costs

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incurred and paid by an owner, operator and colocation tenant of a qualified data center.
2

(23)
(33)
“Real property” means lands, structures (new or used), franchises, and interests in
3
land, including lands under water, and riparian rights, space rights, and air rights, and all other
4
things and rights usually included within the term. “Real property” shall also mean and include any
5
and all interests in that property less than fee simple, such as easements, incorporeal hereditaments,
6
and every estate, interest or right, legal or equitable, including terms for years and liens thereon by
7
way of judgments, mortgages or otherwise, and also all claims for damages to that real property.
8

(24)
(34)
“Recreational facility” means any building, development, or improvement,
9
provided that building, facility, development, or improvement is designed in whole or in part to
10
attract tourists to the state or to provide essential overnight accommodations to transients visiting
11
this state, including, without limiting in any way the generality of the foregoing, marinas, beaches,
12
bathing facilities, ski facilities, convention facilities, hotels, motels, golf courses, camp grounds,
13
arenas, theatres, lodges, guest cottages, and all types of real or personal property related thereto as
14
may be determined from time to time by the corporation.
15

(25)
(35)
“Renewable energy facility” means any real or personal property, or any
16
combination thereof, related to, or incidental to, any project, designed, intended, or utilized for an
17
eligible renewable energy resource that meets the criteria set forth in §§ 39-26-5(a) and 39-26-5(c).
18

(26)
(36)
“Revenues” means: (i) with respect to any project, the rents, fees, tolls, charges,
19
installment payments, repayments, and other income or profit derived from a project or a
20
combination of projects pursuant to any lease, conditional sales contract, installment sales contract,
21
loan agreement, or other contract or agreement, or any combination thereof, and (ii) any receipts,
22
fees, payments, moneys, revenues, or other payments received or to be received by the corporation
23
in the exercise of its corporate powers under this chapter, including, without limitation, loan
24
repayments, grants, aid, appropriations and other assistance for the state, the United States or any
25
corporation, department or instrumentality of either or of a political subdivision thereof, bond
26
proceeds, investment earnings, insurance proceeds, amounts in reserves and other funds and
27
accounts established by or pursuant to this chapter or in connection with the issuance of bonds, and
28
any other taxes, assessments, fees, charges, awards or other income or amounts received or
29
receivable by the corporation.
30

(27)
(37)
“Rule or regulation” means any directive promulgated by the Rhode Island
31
commerce corporation not inconsistent with the laws of the United States or the state, for the
32
improvement of navigation and commerce or other project purposes and shall include, but not be
33
limited to, charges, tolls, rates, rentals, and security provisions fixed or established by the
34
corporation.

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1

(28)
(38)
“Sewage” shall be construed to mean the same as “pollutant” as defined in
2
subsection (16) above

this section
.
3

(29)
(39)
“Sewage treatment facility” means the sewage treatment plant, structure,
4
combined sewer overflows, equipment, interceptors, mains, pumping stations and other property,
5
real, personal or mixed, for the treatment, storage, collection, transporting or disposal of sewage,
6
or any property or system to be used in whole or in part for any of the aforesaid purposes located
7
or operated within the boundaries of the Quonset Point/Davisville Industrial Park, or utilized by
8
the corporation for the transport, collection, treatment, storage, or disposal of waste.
9

(30)
(40)
“Solid waste” means garbage, refuse, and other discarded materials, including,
10
but not limited to, solid waste materials resulting from industrial, recreational, utility, and
11
commercial enterprises, hotels, apartments, or any other public building or private building, or
12
agricultural, or residential activities.
13

(31)
(41)
“Solid waste disposal facility” means any real or personal property, related to or
14
incidental to any project, which is designed or intended or designated for the purpose of treating,
15
compacting, composting, or disposing of solid waste materials, including treatment, compacting,
16
composting, or disposal plants, site and equipment furnishings thereof, and their appurtenances.
17

(32)
(42)
“Source” means any building, structure, facility, or installation from which there
18
is or may be the discharge of sewage.
19

(33)
(43)
“State” means the state of Rhode Island.
20

(34)
(44)
“State agency” means any office, department, board, commission, bureau,
21
division, authority, or public corporation, agency, or instrumentality of the state.
22

(35)
(45)
“State guide plan” means the plan adopted pursuant to § 42-11-10, which
23
establishes the statewide planning program.
24

(36)
(46)
“Utility facility” means any real or personal property designed, intended or
25
utilized for generating, manufacturing, producing, storing, transmitting, distributing, delivering, or
26
furnishing natural or manufactured gas, steam, electrical, or nuclear energy, heat, light, or power
27
directly or indirectly to or for any project, project user, or for the public, the collection and disposal
28
of storm and sanitary sewage; any railroads necessary or desirable for the free flow of commerce
29
to and from projects; any roads, highways, bridges, tunnels, viaducts, or other crossings necessary
30
or desirable for the free flow of commerce to and from projects, and any public transportation
31
systems or facilities, including, but not limited to, bus, truck, ferry, and railroad terminals, depots,
32
tracked vehicles, and other rolling stock and ferries; and any appurtenances, equipment, and
33
machinery or other personal property necessary or desirable for the utilization thereof.
34

(37)
(47)
“Water supply facility” means any real or personal property, or any combination

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1
thereof, related to or incidental to any project, designed, intended, or utilized for the furnishing of
2
water for domestic, industrial, irrigation, or other purposes and including artesian wells, reservoirs,
3
dams, related equipment, and pipelines, and other facilities.
4
SECTION 2. Chapter 42-64 of the General Laws entitled "Rhode Island Commerce
5
Corporation" is hereby amended by adding thereto the following section:
6

42-64-43. Qualified data center location incentive.

7

(a) The director, in consultation with the director of revenue, as defined in § 42-142-1(b),
8
shall review applications of owners or operators of a data center to determine whether the data
9
center qualifies for sales and use tax exemption pursuant to § 44-18-30.
10

(b) To apply for the sales and use tax exemption pursuant § 44-18-30, the owner or operator
11
of a data center shall submit an application to the director, on a form prescribed by the corporation
12
that shall include:
13

(1) The name, address and telephone number of the owner or operator;
14

(2) The address of the site where the qualified data center is or will be located;
15

(3) The anticipated aggregate square feet of the qualified data center for which the sales
16
and use tax exemption is being sought;
17

(4) The anticipated investment associated with the qualified data center for which the sales
18
and use tax exemption is being sought;
19

(5) The anticipated labor costs which the data center will maintain for the first six (6) years
20
following the issuance of a certificate; and
21

(6) An affirmation, signed by an authorized representative representing the owner or
22
operator, that the data center is expected to satisfy the certification requirements in this section as
23
a qualified data center.
24

(c)(1) Within sixty (60) days after receiving a completed application, the director shall
25
review the application submitted by the owner or operator of a data center and certify the data
26
center as a qualified data center provided the data center is expected to meet all requirements of the
27
definition of a “qualified data center.”
28

(2) The director shall issue a written certification that the data center qualifies for the sales
29
and use tax exemption or provide written reasons for its denial of the certificate and an opportunity
30
for the applicant to cure any deficiencies.
31

(3) Failure to approve or deny the application within sixty (60) days after the date the owner
32
or operator submits the application to the director shall constitute approval of the qualified data
33
center, and the director shall issue written certification to the owner or operator within fourteen
34
(14) days.

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1

(4) The certification shall provide the following information:
2

(i) The effective date of the certification;
3

(ii) The name of the owner or operator of the qualified data center;
4

(iii) The location of the qualified data center; and
5

(iv) The beginning and ending date of the sales and use tax exemption which shall begin
6
on the effective date of the certification and be valid for thirty (30) years after the effective date.
7

(5) The director shall send a copy of the certification to the director of revenue.
8

(d) The effective date of the certification shall be the date on which the application was
9
submitted to the corporation or a prospective date stated in the application that does not exceed five
10
(5) years after the date on which the application was submitted; provided that, the certification shall
11
be valid for thirty (30) years after the effective date.
12

(e) On the sixth anniversary of the effective date of the certification, the owner or operator
13
shall file a report with the corporation and documents necessary to evidence the owner or operator’s
14
compliance with the requirements for a qualified data center as set forth in § 42-64-3(30). The
15
corporation shall review the report and additional documents submitted to the corporation to
16
determine compliance with § 42-64-3(30) within three (3) months of the owner or operator’s
17
submission. The corporation shall assess the following penalties for noncompliance:
18

(1) If the owner or operator has failed to comply with § 42-64-3(30)(i), the owner or
19
operator shall pay seven percent (7%) of the difference between the minimum required investment
20
and the actual investment;
21

(2) If the owner or operator has failed to comply with § 42-64-3(30)(ii), the owner or
22
operator shall pay seven-and-one half percent (7.5%) of the difference between the minimum
23
required payroll and the actual payroll; and
24

(3) If the owner or operator has failed to comply with § 42-64-3(30)(iii), the owner or
25
operator shall pay ten percent (10%) of the difference between the minimum required investment
26
in a renewable energy system or energy storage system and the actual investment in renewable
27
energy system or energy storage system.
28

(f) Any penalty assessed pursuant to subsection (e) of this section, shall be paid to the
29
department, as established by chapter 142 of title 42. Any amount which is subject to penalty under
30
more than one section of subsection (e) of this section, shall only be penalized once under the
31
highest penalty rate.
32

(g) Within fourteen (14) days of the corporation’s completion of its review pursuant to
33
subsection (e) of this section or, if applicable, the owner or operator’s payment of a penalty assessed
34
pursuant to subsection (f) of this section, the corporation shall issue a certificate of compliance.

LC004263 - Page 11 of 31
1

(h) For every year following the sixth anniversary of the effective date of the certification
2
up to and including the thirtieth anniversary of the effective date of the certification, the owner or
3
operator shall expend a minimum of five million dollars ($5,000,000) on direct and/or indirect
4
labor. The owner or operator shall file, within forty-five (45) days after each anniversary following
5
the sixth anniversary of the effective date of the certification, documents necessary for the
6
corporation to confirm compliance with this section. If the owner or operator has failed to comply
7
with this section, the owner or operator shall pay to the department seven and one-half percent
8
(7.5%) of the difference between the minimum required labor expenditure and the actual labor
9
expenditure. Within fourteen (14) days of the corporation’s completion of its review pursuant to
10
this section or, if applicable, the owner or operator’s payment of a penalty assessed pursuant to this
11
section, the corporation shall issue an annual certificate of compliance.
12

(i) The corporation, in consultation with the director of revenue, shall promulgate rules and
13
regulations and shall issue instructions and forms necessary for implementation of this section
14
within one year of the effective date of this section.
15
SECTION 3. Section 44-18-30 of the General Laws in Chapter 44-18 entitled "Sales and
16
Use Taxes — Liability and Computation" is hereby amended to read as follows:
17

44-18-30. Gross receipts exempt from sales and use taxes.
18
There are exempted from the taxes imposed by this chapter the following gross receipts:
19
(1) Sales and uses beyond constitutional power of state. From the sale and from the storage,
20
use, or other consumption in this state of tangible personal property the gross receipts from the sale
21
of which, or the storage, use, or other consumption of which, this state is prohibited from taxing
22
under the Constitution of the United States or under the constitution of this state.
23
(2) Newspapers.
24
(i) From the sale and from the storage, use, or other consumption in this state of any
25
newspaper.
26
(ii) “Newspaper” means an unbound publication printed on newsprint that contains news,
27
editorial comment, opinions, features, advertising matter, and other matters of public interest.
28
(iii) “Newspaper” does not include a magazine, handbill, circular, flyer, sales catalog, or
29
similar item unless the item is printed for, and distributed as, a part of a newspaper.
30
(3) School meals. From the sale and from the storage, use, or other consumption in this
31
state of meals served by public, private, or parochial schools, school districts, colleges, universities,
32
student organizations, and parent-teacher associations to the students or teachers of a school,
33
college, or university whether the meals are served by the educational institutions or by a food
34
service or management entity under contract to the educational institutions.

LC004263 - Page 12 of 31
1
(4) Containers.
2
(i) From the sale and from the storage, use, or other consumption in this state of:
3
(A) Non-returnable containers, including boxes, paper bags, and wrapping materials that
4
are biodegradable and all bags and wrapping materials utilized in the medical and healing arts,
5
when sold without the contents to persons who place the contents in the container and sell the
6
contents with the container.
7
(B) Containers when sold with the contents if the sale price of the contents is not required
8
to be included in the measure of the taxes imposed by this chapter.
9
(C) Returnable containers when sold with the contents in connection with a retail sale of
10
the contents or when resold for refilling.
11
(D) Keg and barrel containers, whether returnable or not, when sold to alcoholic beverage
12
producers who place the alcoholic beverages in the containers.
13
(ii) As used in this subdivision, the term “returnable containers” means containers of a kind
14
customarily returned by the buyer of the contents for reuse. All other containers are “non-returnable
15
containers.”
16
(5)(i) Charitable, educational, and religious organizations. From the sale to, as in defined
17
in this section, and from the storage, use, and other consumption in this state, or any other state of
18
the United States of America, of tangible personal property by hospitals not operated for a profit;
19
“educational institutions” as defined in subdivision (18) not operated for a profit; churches,
20
orphanages, and other institutions or organizations operated exclusively for religious or charitable
21
purposes; interest-free loan associations not operated for profit; nonprofit, organized sporting
22
leagues and associations and bands for boys and girls under the age of nineteen (19) years; the
23
following vocational student organizations that are state chapters of national vocational student
24
organizations: Distributive Education Clubs of America (DECA); Future Business Leaders of
25
America, Phi Beta Lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers
26
of America/Home Economics Related Occupations (FHA/HERD); Vocational Industrial Clubs of
27
America (VICA); organized nonprofit golden age and senior citizens clubs for men and women;
28
and parent-teacher associations; and from the sale, storage, use, and other consumption in this state,
29
of and by the Industrial Foundation of Burrillville, a Rhode Island domestic nonprofit corporation.
30
(ii) In the case of contracts entered into with the federal government, its agencies, or
31
instrumentalities, this state, or any other state of the United States of America, its agencies, any
32
city, town, district, or other political subdivision of the states; hospitals not operated for profit;
33
educational institutions not operated for profit; churches, orphanages, and other institutions or
34
organizations operated exclusively for religious or charitable purposes, the contractor may purchase

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1
such materials and supplies (materials and/or supplies are defined as those that are essential to the
2
project) that are to be utilized in the construction of the projects being performed under the contracts
3
without payment of the tax.
4
(iii) The contractor shall not charge any sales or use tax to any exempt agency, institution,
5
or organization but shall in that instance provide his or her suppliers with certificates in the form
6
as determined by the division of taxation showing the reason for exemption and the contractor’s
7
records must substantiate the claim for exemption by showing the disposition of all property so
8
purchased. If any property is then used for a nonexempt purpose, the contractor must pay the tax
9
on the property used.
10
(6) Gasoline. From the sale and from the storage, use, or other consumption in this state
11
of: (i) Gasoline and other products taxed under chapter 36 of title 31 and (ii) Fuels used for the
12
propulsion of airplanes.
13
(7) Purchase for manufacturing purposes.
14
(i) From the sale and from the storage, use, or other consumption in this state of computer
15
software, tangible personal property, electricity, natural gas, artificial gas, steam, refrigeration, and
16
water, when the property or service is purchased for the purpose of being manufactured into a
17
finished product for resale and becomes an ingredient, component, or integral part of the
18
manufactured, compounded, processed, assembled, or prepared product, or if the property or
19
service is consumed in the process of manufacturing for resale computer software, tangible personal
20
property, electricity, natural gas, artificial gas, steam, refrigeration, or water.
21
(ii) “Consumed” means destroyed, used up, or worn out to the degree or extent that the
22
property cannot be repaired, reconditioned, or rendered fit for further manufacturing use.
23
(iii) “Consumed” includes mere obsolescence.
24
(iv) “Manufacturing” means and includes: manufacturing, compounding, processing,
25
assembling, preparing, or producing.
26
(v) “Process of manufacturing” means and includes all production operations performed in
27
the producing or processing room, shop, or plant, insofar as the operations are a part of and
28
connected with the manufacturing for resale of tangible personal property, electricity, natural gas,
29
artificial gas, steam, refrigeration, or water and all production operations performed insofar as the
30
operations are a part of and connected with the manufacturing for resale of computer software.
31
(vi) “Process of manufacturing” does not mean or include administration operations such
32
as general office operations, accounting, collection, or sales promotion, nor does it mean or include
33
distribution operations that occur subsequent to production operations, such as handling, storing,
34
selling, and transporting the manufactured products, even though the administration and

LC004263 - Page 14 of 31
1
distribution operations are performed by, or in connection with, a manufacturing business.
2
(8) State and political subdivisions. From the sale to, and from the storage, use, or other
3
consumption by, this state, any city, town, district, or other political subdivision of this state. Every
4
redevelopment agency created pursuant to chapter 31 of title 45 is deemed to be a subdivision of
5
the municipality where it is located.
6
(9) Food and food ingredients. From the sale and storage, use, or other consumption in this
7
state of food and food ingredients as defined in § 44-18-7.1(l).
8
For the purposes of this exemption “food and food ingredients” shall not include candy,
9
soft drinks, dietary supplements, alcoholic beverages, tobacco, food sold through vending
10
machines, or prepared food, as those terms are defined in § 44-18-7.1, unless the prepared food is:
11
(i) Sold by a seller whose primary NAICS classification is manufacturing in sector 311,
12
except sub-sector 3118 (bakeries);
13
(ii) Sold in an unheated state by weight or volume as a single item;
14
(iii) Bakery items, including: bread, rolls, buns, biscuits, bagels, croissants, pastries,
15
donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas; and
16
is not sold with utensils provided by the seller, including: plates, knives, forks, spoons,
17
glasses, cups, napkins, or straws.
18
(10) Medicines, drugs, and durable medical equipment. From the sale and from the storage,
19
use, or other consumption in this state, of:
20
(i) “Drugs” as defined in § 44-18-7.1(h)(i), sold on prescriptions, medical oxygen, and
21
insulin whether or not sold on prescription. For purposes of this exemption drugs shall not include
22
over-the-counter drugs and grooming and hygiene products as defined in § 44-18-7.1(h)(iii).
23
(ii) Durable medical equipment as defined in § 44-18-7.1(k) for home use only, including,
24
but not limited to: syringe infusers, ambulatory drug delivery pumps, hospital beds, convalescent
25
chairs, and chair lifts. Supplies used in connection with syringe infusers and ambulatory drug
26
delivery pumps that are sold on prescription to individuals to be used by them to dispense or
27
administer prescription drugs, and related ancillary dressings and supplies used to dispense or
28
administer prescription drugs, shall also be exempt from tax.
29
(11) Prosthetic devices and mobility enhancing equipment. From the sale and from the
30
storage, use, or other consumption in this state, of prosthetic devices as defined in § 44-18-7.1(t),
31
sold on prescription, including, but not limited to: artificial limbs, dentures, spectacles, eyeglasses,
32
and artificial eyes; artificial hearing devices and hearing aids, whether or not sold on prescription;
33
and mobility enhancing equipment as defined in § 44-18-7.1(p), including wheelchairs, crutches,
34
and canes.

LC004263 - Page 15 of 31
1
(12) Coffins, caskets, urns, shrouds and burial garments. From the sale and from the
2
storage, use, or other consumption in this state of coffins, caskets, burial containers, urns, urn liners,
3
urn vaults, grave liners, grave vaults, burial tent setups, prayer cards, shrouds, and other burial
4
garments that are ordinarily sold by a funeral director as part of the business of funeral directing.
5
(13) Motor vehicles sold to nonresidents.
6
(i) From the sale, subsequent to June 30, 1958, of a motor vehicle to a bona fide nonresident
7
of this state who does not register the motor vehicle in this state, whether the sale or delivery of the
8
motor vehicle is made in this state or at the place of residence of the nonresident. A motor vehicle
9
sold to a bona fide nonresident whose state of residence does not allow a like exemption to its
10
nonresidents is not exempt from the tax imposed under § 44-18-20. In that event, the bona fide
11
nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate that would be imposed
12
in his or her state of residence not to exceed the rate that would have been imposed under § 44-18-
13
20. Notwithstanding any other provisions of law, a licensed motor vehicle dealer shall add and
14
collect the tax required under this subdivision and remit the tax to the tax administrator under the
15
provisions of chapters 18 and 19 of this title. When a Rhode Island licensed, motor vehicle dealer
16
is required to add and collect the sales and use tax on the sale of a motor vehicle to a bona fide
17
nonresident as provided in this section, the dealer in computing the tax takes into consideration the
18
law of the state of the nonresident as it relates to the trade-in of motor vehicles.
19
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may
20
require any licensed motor vehicle dealer to keep records of sales to bona fide nonresidents as the
21
tax administrator deems reasonably necessary to substantiate the exemption provided in this
22
subdivision, including the affidavit of a licensed motor vehicle dealer that the purchaser of the
23
motor vehicle was the holder of, and had in his or her possession a valid out-of-state motor vehicle
24
registration or a valid out-of-state driver’s license.
25
(iii) Any nonresident who registers a motor vehicle in this state within ninety (90) days of
26
the date of its sale to him or her is deemed to have purchased the motor vehicle for use, storage, or
27
other consumption in this state, and is subject to, and liable for, the use tax imposed under the
28
provisions of § 44-18-20.
29
(14) Sales in public buildings by blind people. From the sale and from the storage, use, or
30
other consumption in all public buildings in this state of all products or wares by any person
31
licensed under § 40-9-11.1.
32
(15) Air and water pollution control facilities. From the sale, storage, use, or other
33
consumption in this state of tangible personal property or supplies acquired for incorporation into
34
or used and consumed in the operation of a facility, the primary purpose of which is to aid in the

LC004263 - Page 16 of 31
1
control of the pollution or contamination of the waters or air of the state, as defined in chapter 12
2
of title 46 and chapter 23 of title 23, respectively, and that has been certified as approved for that
3
purpose by the director of environmental management. The director of environmental management
4
may certify to a portion of the tangible personal property or supplies acquired for incorporation
5
into those facilities or used and consumed in the operation of those facilities to the extent that that
6
portion has as its primary purpose the control of the pollution or contamination of the waters or air
7
of this state. As used in this subdivision, “facility” means any land, facility, device, building,
8
machinery, or equipment.
9
(16) Camps. From the rental charged for living quarters, or sleeping, or housekeeping
10
accommodations at camps or retreat houses operated by religious, charitable, educational, or other
11
organizations and associations mentioned in subsection (5), or by privately owned and operated
12
summer camps for children.
13
(17) Certain institutions. From the rental charged for living or sleeping quarters in an
14
institution licensed by the state for the hospitalization, custodial, or nursing care of human beings.
15
(18) Educational institutions. From the rental charged by any educational institution for
16
living quarters, or sleeping, or housekeeping accommodations or other rooms or accommodations
17
to any student or teacher necessitated by attendance at an educational institution. “Educational
18
institution” as used in this section means an institution of learning not operated for profit that is
19
empowered to confer diplomas, educational, literary, or academic degrees; that has a regular
20
faculty, curriculum, and organized body of pupils or students in attendance throughout the usual
21
school year; that keeps and furnishes to students and others records required and accepted for
22
entrance to schools of secondary, collegiate, or graduate rank; and no part of the net earnings of
23
which inures to the benefit of any individual.
24
(19) Motor vehicle and adaptive equipment for persons with disabilities.
25
(i) From the sale of: (A) Special adaptations; (B) The component parts of the special
26
adaptations; or (C) A specially adapted motor vehicle; provided that the owner furnishes to the tax
27
administrator an affidavit of a licensed physician to the effect that the specially adapted motor
28
vehicle is necessary to transport a family member with a disability or where the vehicle has been
29
specially adapted to meet the specific needs of the person with a disability. This exemption applies
30
to not more than one motor vehicle owned and registered for personal, noncommercial use.
31
(ii) For the purpose of this subsection the term “special adaptations” includes, but is not
32
limited to: wheelchair lifts, wheelchair carriers, wheelchair ramps, wheelchair securements, hand
33
controls, steering devices, extensions, relocations, and crossovers of operator controls, power-
34
assisted controls, raised tops or dropped floors, raised entry doors, or alternative signaling devices

LC004263 - Page 17 of 31
1
to auditory signals.
2
(iii) From the sale of: (a) Special adaptations, (b) The component parts of the special
3
adaptations, for a “wheelchair accessible taxicab” as defined in § 39-14-1, and/or a “wheelchair
4
accessible public motor vehicle” as defined in § 39-14.1-1.
5
(iv) For the purpose of this subdivision the exemption for a “specially adapted motor
6
vehicle” means a use tax credit not to exceed the amount of use tax that would otherwise be due on
7
the motor vehicle, exclusive of any adaptations. The use tax credit is equal to the cost of the special
8
adaptations, including installation.
9
(20) Heating fuels. From the sale and from the storage, use, or other consumption in this
10
state of every type of heating fuel.
11
(21) Electricity and gas. From the sale and from the storage, use, or other consumption in
12
this state of electricity and gas.
13
(22) Manufacturing machinery and equipment.
14
(i) From the sale and from the storage, use, or other consumption in this state of tools, dies,
15
molds, machinery, equipment (including replacement parts), and related items to the extent used in
16
an industrial plant in connection with the actual manufacture, conversion, or processing of tangible
17
personal property, or to the extent used in connection with the actual manufacture, conversion, or
18
processing of computer software as that term is utilized in industry numbers 7371, 7372, and 7373
19
in the standard industrial classification manual prepared by the Technical Committee on Industrial
20
Classification, Office of Statistical Standards, Executive Office of the President, United States
21
Bureau of the Budget, as revised from time to time, to be sold, or that machinery and equipment
22
used in the furnishing of power to an industrial manufacturing plant. For the purposes of this
23
subdivision, “industrial plant” means a factory at a fixed location primarily engaged in the
24
manufacture, conversion, or processing of tangible personal property to be sold in the regular
25
course of business;
26
(ii) Machinery and equipment and related items are not deemed to be used in connection
27
with the actual manufacture, conversion, or processing of tangible personal property, or in
28
connection with the actual manufacture, conversion, or processing of computer software as that
29
term is utilized in industry numbers 7371, 7372, and 7373 in the standard industrial classification
30
manual prepared by the Technical Committee on Industrial Classification, Office of Statistical
31
Standards, Executive Office of the President, United States Bureau of the Budget, as revised from
32
time to time, to be sold to the extent the property is used in administration or distribution operations;
33
(iii) Machinery and equipment and related items used in connection with the actual
34
manufacture, conversion, or processing of any computer software or any tangible personal property

LC004263 - Page 18 of 31
1
that is not to be sold and that would be exempt under subdivision (7) or this subdivision if purchased
2
from a vendor or machinery and equipment and related items used during any manufacturing,
3
converting, or processing function is exempt under this subdivision even if that operation, function,
4
or purpose is not an integral or essential part of a continuous production flow or manufacturing
5
process;
6
(iv) Where a portion of a group of portable or mobile machinery is used in connection with
7
the actual manufacture, conversion, or processing of computer software or tangible personal
8
property to be sold, as previously defined, that portion, if otherwise qualifying, is exempt under
9
this subdivision even though the machinery in that group is used interchangeably and not otherwise
10
identifiable as to use.
11
(23) Trade-in value of motor vehicles. From the sale and from the storage, use, or other
12
consumption in this state of so much of the purchase price paid for a new or used automobile as is
13
allocated for a trade-in allowance on the automobile of the buyer given in trade to the seller, or of
14
the proceeds applicable only to the automobile as are received from the manufacturer of
15
automobiles for the repurchase of the automobile whether the repurchase was voluntary or not
16
towards the purchase of a new or used automobile by the buyer. For the purpose of this subdivision,
17
the word “automobile” means a private passenger automobile not used for hire and does not refer
18
to any other type of motor vehicle.
19
(24) Precious metal bullion.
20
(i) From the sale and from the storage, use, or other consumption in this state of precious
21
metal bullion, substantially equivalent to a transaction in securities or commodities.
22
(ii) For purposes of this subdivision, “precious metal bullion” means any elementary
23
precious metal that has been put through a process of smelting or refining, including, but not limited
24
to: gold, silver, platinum, rhodium, and chromium, and that is in a state or condition that its value
25
depends upon its content and not upon its form.
26
(iii) The term does not include fabricated precious metal that has been processed or
27
manufactured for some one or more specific and customary industrial, professional, or artistic uses.
28
(25) Commercial vessels. From sales made to a commercial ship, barge, or other vessel of
29
fifty (50) tons burden or over, primarily engaged in interstate or foreign commerce, and from the
30
repair, alteration, or conversion of the vessels, and from the sale of property purchased for the use
31
of the vessels including provisions, supplies, and material for the maintenance and/or repair of the
32
vessels.
33
(26) Commercial fishing vessels. From the sale and from the storage, use, or other
34
consumption in this state of vessels and other watercraft that are in excess of five (5) net tons and

LC004263 - Page 19 of 31
1
that are used exclusively for “commercial fishing,” as defined in this subdivision, and from the
2
repair, alteration, or conversion of those vessels and other watercraft, and from the sale of property
3
purchased for the use of those vessels and other watercraft including provisions, supplies, and
4
material for the maintenance and/or repair of the vessels and other watercraft and the boats nets,
5
cables, tackle, and other fishing equipment appurtenant to or used in connection with the
6
commercial fishing of the vessels and other watercraft. “Commercial fishing” means taking or
7
attempting to take any fish, shellfish, crustacea, or bait species with the intent of disposing of it for
8
profit or by sale, barter, trade, or in commercial channels. The term does not include subsistence
9
fishing, i.e., the taking for personal use and not for sale or barter; or sport fishing; but shall include
10
vessels and other watercraft with a Rhode Island party and charter boat license issued by the
11
department of environmental management pursuant to § 20-2-27.1 that meet the following criteria:
12
(i) The operator must have a current United States Coast Guard (U.S.C.G.) license to carry
13
passengers for hire; (ii) U.S.C.G. vessel documentation in the coast wide fishery trade; (iii)
14
U.S.C.G. vessel documentation as to proof of Rhode Island home port status or a Rhode Island boat
15
registration to prove Rhode Island home port status; and (iv) The vessel must be used as a
16
commercial passenger carrying fishing vessel to carry passengers for fishing. The vessel must be
17
able to demonstrate that at least fifty percent (50%) of its annual gross income derives from charters
18
or provides documentation of a minimum of one hundred (100) charter trips annually; and (v) The
19
vessel must have a valid Rhode Island party and charter boat license. The tax administrator shall
20
implement the provisions of this subdivision by promulgating rules and regulations relating thereto.
21
(27) Clothing and footwear. From the sales of articles of clothing, including footwear,
22
intended to be worn or carried on or about the human body for sales prior to October 1, 2012.
23
Effective October 1, 2012, the exemption will apply to the sales of articles of clothing, including
24
footwear, intended to be worn or carried on or about the human body up to two hundred and fifty
25
dollars ($250) of the sales price per item. For the purposes of this section, “clothing or footwear”
26
does not include clothing accessories or equipment or special clothing or footwear primarily
27
designed for athletic activity or protective use as these terms are defined in § 44-18-7.1(f). In
28
recognition of the work being performed by the streamlined sales and use tax governing board,
29
upon passage of any federal law that authorizes states to require remote sellers to collect and remit
30
sales and use taxes, this unlimited exemption will apply as it did prior to October 1, 2012. The
31
unlimited exemption on sales of clothing and footwear shall take effect on the date that the state
32
requires remote sellers to collect and remit sales and use taxes.
33
(28) Water for residential use. From the sale and from the storage, use, or other
34
consumption in this state of water furnished for domestic use by occupants of residential premises.

LC004263 - Page 20 of 31
1
(29) Bibles. [Unconstitutional; see Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); see Notes
2
to Decisions.] From the sale and from the storage, use, or other consumption in the state of any
3
canonized scriptures of any tax-exempt nonprofit religious organization including, but not limited
4
to, the Old Testament and the New Testament versions.
5
(30) Boats.
6
(i) From the sale of a boat or vessel to a bona fide nonresident of this state who does not
7
register the boat or vessel in this state or document the boat or vessel with the United States
8
government at a home port within the state, whether the sale or delivery of the boat or vessel is
9
made in this state or elsewhere; provided, that the nonresident transports the boat within thirty (30)
10
days after delivery by the seller outside the state for use thereafter solely outside the state.
11
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may
12
require the seller of the boat or vessel to keep records of the sales to bona fide nonresidents as the
13
tax administrator deems reasonably necessary to substantiate the exemption provided in this
14
subdivision, including the affidavit of the seller that the buyer represented himself or herself to be
15
a bona fide nonresident of this state and of the buyer that he or she is a nonresident of this state.
16
(31) Youth activities equipment. From the sale, storage, use, or other consumption in this
17
state of items for not more than twenty dollars ($20.00) each by nonprofit Rhode Island
18
eleemosynary organizations, for the purposes of youth activities that the organization is formed to
19
sponsor and support; and by accredited elementary and secondary schools for the purposes of the
20
schools or of organized activities of the enrolled students.
21
(32) Farm equipment. From the sale and from the storage or use of machinery and
22
equipment used directly for commercial farming and agricultural production; including, but not
23
limited to: tractors, ploughs, harrows, spreaders, seeders, milking machines, silage conveyors,
24
balers, bulk milk storage tanks, trucks with farm plates, mowers, combines, irrigation equipment,
25
greenhouses and greenhouse coverings, graders and packaging machines, tools and supplies and
26
other farming equipment, including replacement parts appurtenant to or used in connection with
27
commercial farming and tools and supplies used in the repair and maintenance of farming
28
equipment. “Commercial farming” means the keeping or boarding of five (5) or more horses or the
29
production within this state of agricultural products, including, but not limited to, field or orchard
30
crops, livestock, dairy, and poultry, or their products, where the keeping, boarding, or production
31
provides at least two thousand five hundred dollars ($2,500) in annual gross sales to the operator,
32
whether an individual, a group, a partnership, or a corporation for exemptions issued prior to July
33
1, 2002. For exemptions issued or renewed after July 1, 2002, there shall be two (2) levels. Level I
34
shall be based on proof of annual, gross sales from commercial farming of at least twenty-five

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1
hundred dollars ($2,500) and shall be valid for purchases subject to the exemption provided in this
2
subdivision except for motor vehicles with an excise tax value of five thousand dollars ($5,000) or
3
greater. Level II shall be based on proof of annual gross sales from commercial farming of at least
4
ten thousand dollars ($10,000) or greater and shall be valid for purchases subject to the exemption
5
provided in this subdivision including motor vehicles with an excise tax value of five thousand
6
dollars ($5,000) or greater. For the initial issuance of the exemptions, proof of the requisite amount
7
of annual gross sales from commercial farming shall be required for the prior year; for any renewal
8
of an exemption granted in accordance with this subdivision at either level I or level II, proof of
9
gross annual sales from commercial farming at the requisite amount shall be required for each of
10
the prior two (2) years. Certificates of exemption issued or renewed after July 1, 2002, shall clearly
11
indicate the level of the exemption and be valid for four (4) years after the date of issue. This
12
exemption applies even if the same equipment is used for ancillary uses, or is temporarily used for
13
a non-farming or a non-agricultural purpose, but shall not apply to motor vehicles acquired after
14
July 1, 2002, unless the vehicle is a farm vehicle as defined pursuant to § 31-1-8 and is eligible for
15
registration displaying farm plates as provided for in § 31-3-31.
16
(33) Compressed air. From the sale and from the storage, use, or other consumption in the
17
state of compressed air.
18
(34) Flags. From the sale and from the storage, consumption, or other use in this state of
19
United States, Rhode Island or POW-MIA flags.
20
(35) Motor vehicle and adaptive equipment to certain veterans. From the sale of a motor
21
vehicle and adaptive equipment to and for the use of a veteran with a service-connected loss of or
22
the loss of use of a leg, foot, hand, or arm, or any veteran who is a double amputee, whether service
23
connected or not. The motor vehicle must be purchased by and especially equipped for use by the
24
qualifying veteran. Certificate of exemption or refunds of taxes paid is granted under rules or
25
regulations that the tax administrator may prescribe.
26
(36) Textbooks. From the sale and from the storage, use, or other consumption in this state
27
of textbooks by an “educational institution,” as defined in subsection (18) of this section, and any
28
educational institution within the purview of § 16-63-9(4), and used textbooks by any purveyor.
29
(37) Tangible personal property and supplies used in on-site hazardous waste recycling,
30
reuse, or treatment. From the sale, storage, use, or other consumption in this state of tangible
31
personal property or supplies used or consumed in the operation of equipment, the exclusive
32
function of which is the recycling, reuse, or recovery of materials (other than precious metals, as
33
defined in subdivision (24)(ii) of this section) from the treatment of “hazardous wastes,” as defined
34
in § 23-19.1-4, where the “hazardous wastes” are generated in Rhode Island solely by the same

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1
taxpayer and where the personal property is located at, in, or adjacent to a generating facility of the
2
taxpayer in Rhode Island. The taxpayer shall procure an order from the director of the department
3
of environmental management certifying that the equipment and/or supplies as used or consumed,
4
qualify for the exemption under this subdivision. If any information relating to secret processes or
5
methods of manufacture, production, or treatment is disclosed to the department of environmental
6
management only to procure an order, and is a “trade secret” as defined in § 28-21-10(b), it is not
7
open to public inspection or publicly disclosed unless disclosure is required under chapter 21 of
8
title 28 or chapter 24.4 of title 23.
9
(38) Promotional and product literature of boat manufacturers. From the sale and from the
10
storage, use, or other consumption of promotional and product literature of boat manufacturers
11
shipped to points outside of Rhode Island that either: (i) Accompany the product that is sold; (ii)
12
Are shipped in bulk to out-of-state dealers for use in the sale of the product; or (iii) Are mailed to
13
customers at no charge.
14
(39) Food items paid for by food stamps. From the sale and from the storage, use, or other
15
consumption in this state of eligible food items payment for which is properly made to the retailer
16
in the form of U.S. government food stamps issued in accordance with the Food Stamp Act of 1977,
17
7 U.S.C. § 2011 et seq.
18
(40) Transportation charges. From the sale or hiring of motor carriers as defined in § 39-
19
12-2(12) to haul goods, when the contract or hiring cost is charged by a motor freight tariff filed
20
with the Rhode Island public utilities commission on the number of miles driven or by the number
21
of hours spent on the job.
22
(41) Trade-in value of boats. From the sale and from the storage, use, or other consumption
23
in this state of so much of the purchase price paid for a new or used boat as is allocated for a trade-
24
in allowance on the boat of the buyer given in trade to the seller or of the proceeds applicable only
25
to the boat as are received from an insurance claim as a result of a stolen or damaged boat, towards
26
the purchase of a new or used boat by the buyer.
27
(42) Equipment used for research and development. From the sale and from the storage,
28
use, or other consumption of equipment to the extent used for research and development purposes
29
by a qualifying firm. For the purposes of this subsection, “qualifying firm” means a business for
30
which the use of research and development equipment is an integral part of its operation and
31
“equipment” means scientific equipment, computers, software, and related items.
32
(43) Coins. From the sale and from the other consumption in this state of coins having
33
numismatic or investment value.
34
(44) Farm structure construction materials. Lumber, hardware, and other materials used in

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1
the new construction of farm structures, including production facilities such as, but not limited to:
2
farrowing sheds, free stall and stanchion barns, milking parlors, silos, poultry barns, laying houses,
3
fruit and vegetable storages, rooting cellars, propagation rooms, greenhouses, packing rooms,
4
machinery storage, seasonal farm worker housing, certified farm markets, bunker and trench silos,
5
feed storage sheds, and any other structures used in connection with commercial farming.
6
(45) Telecommunications carrier access service. Carrier access service or
7
telecommunications service when purchased by a telecommunications company from another
8
telecommunications company to facilitate the provision of telecommunications service.
9
(46) Boats or vessels brought into the state exclusively for winter storage, maintenance,
10
repair, or sale. Notwithstanding the provisions of §§ 44-18-10, 44-18-11 and 44-18-20, the tax
11
imposed by § 44-18-20 is not applicable for the period commencing on the first day of October in
12
any year up to and including the 30th day of April next succeeding with respect to the use of any
13
boat or vessel within this state exclusively for purposes of: (i) Delivery of the vessel to a facility in
14
this state for storage, including dry storage and storage in water by means of apparatus preventing
15
ice damage to the hull, maintenance, or repair; (ii) The actual process of storage, maintenance, or
16
repair of the boat or vessel; or (iii) Storage for the purpose of selling the boat or vessel.
17
(47) Jewelry display product. From the sale and from the storage, use, or other
18
consumption in this state of tangible personal property used to display any jewelry product;
19
provided that title to the jewelry display product is transferred by the jewelry manufacturer or seller
20
and that the jewelry display product is shipped out of state for use solely outside the state and is not
21
returned to the jewelry manufacturer or seller.
22
(48) Boats or vessels generally. Notwithstanding the provisions of this chapter, the tax
23
imposed by §§ 44-18-20 and 44-18-18 shall not apply with respect to the sale and to the storage,
24
use, or other consumption in this state of any new or used boat. The exemption provided for in this
25
subdivision does not apply after October 1, 1993, unless prior to October 1, 1993, the federal ten
26
percent (10%) surcharge on luxury boats is repealed.
27
(49) Banks and regulated investment companies interstate toll-free calls. Notwithstanding
28
the provisions of this chapter, the tax imposed by this chapter does not apply to the furnishing of
29
interstate and international, toll-free terminating telecommunication service that is used directly
30
and exclusively by or for the benefit of an eligible company as defined in this subdivision; provided
31
that an eligible company employs on average during the calendar year no less than five hundred
32
(500) “full-time equivalent employees” as that term is defined in § 42-64.5-2. For purposes of this
33
section, an “eligible company” means a “regulated investment company” as that term is defined in
34
the Internal Revenue Code of 1986, 26 U.S.C. § 851, or a corporation to the extent the service is

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1
provided, directly or indirectly, to or on behalf of a regulated investment company, an employee
2
benefit plan, a retirement plan or a pension plan, or a state-chartered bank.
3
(50) Mobile and manufactured homes generally. From the sale and from the storage, use,
4
or other consumption in this state of mobile and/or manufactured homes as defined and subject to
5
taxation pursuant to the provisions of chapter 44 of title 31.
6
(51) Manufacturing business reconstruction materials.
7
(i) From the sale and from the storage, use, or other consumption in this state of lumber,
8
hardware, and other building materials used in the reconstruction of a manufacturing business
9
facility that suffers a disaster, as defined in this subdivision, in this state. “Disaster” means any
10
occurrence, natural or otherwise, that results in the destruction of sixty percent (60%) or more of
11
an operating manufacturing business facility within this state. “Disaster” does not include any
12
damage resulting from the willful act of the owner of the manufacturing business facility.
13
(ii) Manufacturing business facility includes, but is not limited to, the structures housing
14
the production and administrative facilities.
15
(iii) In the event a manufacturer has more than one manufacturing site in this state, the sixty
16
percent (60%) provision applies to the damages suffered at that one site.
17
(iv) To the extent that the costs of the reconstruction materials are reimbursed by insurance,
18
this exemption does not apply.
19
(52) Tangible personal property and supplies used in the processing or preparation of floral
20
products and floral arrangements. From the sale, storage, use, or other consumption in this state of
21
tangible personal property or supplies purchased by florists, garden centers, or other like producers
22
or vendors of flowers, plants, floral products, and natural and artificial floral arrangements that are
23
ultimately sold with flowers, plants, floral products, and natural and artificial floral arrangements
24
or are otherwise used in the decoration, fabrication, creation, processing, or preparation of flowers,
25
plants, floral products, or natural and artificial floral arrangements, including descriptive labels,
26
stickers, and cards affixed to the flower, plant, floral product, or arrangement, artificial flowers,
27
spray materials, floral paint and tint, plant shine, flower food, insecticide, and fertilizers.
28
(53) Horse food products. From the sale and from the storage, use, or other consumption
29
in this state of horse food products purchased by a person engaged in the business of the boarding
30
of horses.
31
(54) Non-motorized recreational vehicles sold to nonresidents.
32
(i) From the sale, subsequent to June 30, 2003, of a non-motorized recreational vehicle to
33
a bona fide nonresident of this state who does not register the non-motorized recreational vehicle
34
in this state, whether the sale or delivery of the non-motorized recreational vehicle is made in this

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1
state or at the place of residence of the nonresident; provided that a non-motorized recreational
2
vehicle sold to a bona fide nonresident whose state of residence does not allow a like exemption to
3
its nonresidents is not exempt from the tax imposed under § 44-18-20; provided, further, that in
4
that event the bona fide nonresident pays a tax to Rhode Island on the sale at a rate equal to the rate
5
that would be imposed in his or her state of residence not to exceed the rate that would have been
6
imposed under § 44-18-20. Notwithstanding any other provisions of law, a licensed, non-motorized
7
recreational vehicle dealer shall add and collect the tax required under this subdivision and remit
8
the tax to the tax administrator under the provisions of chapters 18 and 19 of this title. Provided,
9
that when a Rhode Island licensed, non-motorized recreational vehicle dealer is required to add and
10
collect the sales and use tax on the sale of a non-motorized recreational vehicle to a bona fide
11
nonresident as provided in this section, the dealer in computing the tax takes into consideration the
12
law of the state of the nonresident as it relates to the trade-in of motor vehicles.
13
(ii) The tax administrator, in addition to the provisions of §§ 44-19-27 and 44-19-28, may
14
require any licensed, non-motorized recreational vehicle dealer to keep records of sales to bona fide
15
nonresidents as the tax administrator deems reasonably necessary to substantiate the exemption
16
provided in this subdivision, including the affidavit of a licensed, non-motorized recreational
17
vehicle dealer that the purchaser of the non-motorized recreational vehicle was the holder of, and
18
had in his or her possession a valid out-of-state non-motorized recreational vehicle registration or
19
a valid out-of-state driver’s license.
20
(iii) Any nonresident who registers a non-motorized recreational vehicle in this state within
21
ninety (90) days of the date of its sale to him or her is deemed to have purchased the non-motorized
22
recreational vehicle for use, storage, or other consumption in this state, and is subject to, and liable
23
for, the use tax imposed under the provisions of § 44-18-20.
24
(iv) “Non-motorized recreational vehicle” means any portable dwelling designed and
25
constructed to be used as a temporary dwelling for travel, camping, recreational, and vacation use
26
that is eligible to be registered for highway use, including, but not limited to, “pick-up coaches” or
27
“pick-up campers,” “travel trailers,” and “tent trailers” as those terms are defined in chapter 1 of
28
title 31.
29
(55) Sprinkler and fire alarm systems in existing buildings. From the sale in this state of
30
sprinkler and fire alarm systems; emergency lighting and alarm systems; and the materials
31
necessary and attendant to the installation of those systems that are required in buildings and
32
occupancies existing therein in July 2003 in order to comply with any additional requirements for
33
such buildings arising directly from the enactment of the Comprehensive Fire Safety Act of 2003
34
and that are not required by any other provision of law or ordinance or regulation adopted pursuant

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1
to that act. The exemption provided in this subdivision shall expire on December 31, 2008.
2
(56) Aircraft. Notwithstanding the provisions of this chapter, the tax imposed by §§ 44-
3
18-18 and 44-18-20 shall not apply with respect to the sale and to the storage, use, or other
4
consumption in this state of any new or used aircraft or aircraft parts.
5
(57) Renewable energy products. Notwithstanding any other provisions of Rhode Island
6
general laws, the following products shall also be exempt from sales tax: solar photovoltaic
7
modules or panels, or any module or panel that generates electricity from light; solar thermal
8
collectors, including, but not limited to, those manufactured with flat glass plates, extruded plastic,
9
sheet metal, and/or evacuated tubes; geothermal heat pumps, including both water-to-water and
10
water-to-air type pumps; wind turbines; towers used to mount wind turbines if specified by or sold
11
by a wind turbine manufacturer; DC to AC inverters that interconnect with utility power lines; and
12
manufactured mounting racks and ballast pans for solar collector, module, or panel installation. Not
13
to include materials that could be fabricated into such racks; monitoring and control equipment, if
14
specified or supplied by a manufacturer of solar thermal, solar photovoltaic, geothermal, or wind
15
energy systems or if required by law or regulation for such systems but not to include pumps, fans
16
or plumbing or electrical fixtures unless shipped from the manufacturer affixed to, or an integral
17
part of, another item specified on this list; and solar storage tanks that are part of a solar domestic
18
hot water system or a solar space heating system. If the tank comes with an external heat exchanger
19
it shall also be tax exempt, but a standard hot water tank is not exempt from state sales tax.
20
(58) Returned property. The amount charged for property returned by customers upon
21
rescission of the contract of sale when the entire amount exclusive of handling charges paid for the
22
property is refunded in either cash or credit, and where the property is returned within one hundred
23
twenty (120) days from the date of delivery.
24
(59) Dietary supplements. From the sale and from the storage, use, or other consumption
25
of dietary supplements as defined in § 44-18-7.1(l)(v), sold on prescriptions.
26
(60) Blood. From the sale and from the storage, use, or other consumption of human blood.
27
(61) Agricultural products for human consumption. From the sale and from the storage,
28
use, or other consumption of livestock and poultry of the kinds of products that ordinarily constitute
29
food for human consumption and of livestock of the kind the products of which ordinarily constitute
30
fibers for human use.
31
(62) Diesel emission control technology. From the sale and use of diesel retrofit
32
technology that is required by § 31-47.3-4.
33
(63) Feed for certain animals used in commercial farming. From the sale of feed for
34
animals as described in subsection (61) of this section.

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1
(64) Alcoholic beverages. From the sale and storage, use, or other consumption in this
2
state by a Class A licensee of alcoholic beverages, as defined in § 44-18-7.1, excluding beer and
3
malt beverages; provided, further, notwithstanding § 6-13-1 or any other general or public law to
4
the contrary, alcoholic beverages, as defined in § 44-18-7.1, shall not be subject to minimum
5
markup.
6
(65) Seeds and plants used to grow food and food ingredients. From the sale, storage, use,
7
or other consumption in this state of seeds and plants used to grow food and food ingredients as
8
defined in § 44-18-7.1(l)(i). “Seeds and plants used to grow food and food ingredients” shall not
9
include marijuana seeds or plants.
10
(66) Feminine hygiene products. From the sale and from the storage, use, or other
11
consumption of tampons, panty liners, menstrual cups, sanitary napkins, and other similar products
12
the principal use of which is feminine hygiene in connection with the menstrual cycle.
13
(67) “Breast pump collection and storage supplies” means items of tangible personal
14
property used in conjunction with a breast pump to collect milk expressed from a human breast and
15
to store collected milk until it is ready for consumption. “Breast pump collection and storage
16
supplies” include, but are not limited to, breast shields and breast shield connectors; breast pump
17
tubes and tubing adaptors; breast pump valves and membranes; backflow protectors and backflow
18
protector adaptors; bottles and bottle caps specific to the operation of the breast pump; breast milk
19
storage bags; and related items sold as part of a breast pump kit pre-packaged by the breast pump
20
manufacturer. “Breast pump collection and storage supplies” does not include: bottles and bottle
21
caps not specific to the operation of the breast pump; breast pump travel bags and other similar
22
carrying accessories, including ice packs, labels, and other similar products, unless sold as part of
23
a breast pump kit pre-packed by the breast pump manufacturer; breast pump cleaning supplies,
24
unless sold as part of a breast pump kit pre-packaged by the breast pump manufacturer; nursing
25
bras, bra pads, breast shells, and other similar products; and creams, ointments, and other similar
26
products that relieve breastfeeding-related symptoms or conditions of the breasts or nipples.
27
(68) Trade-in value of motorcycles. From the sale and from the storage, use, or other
28
consumption in this state of so much of the purchase price paid for a new or used motorcycle as is
29
allocated for a trade-in allowance on the motorcycle of the buyer given in trade to the seller, or of
30
the proceeds applicable only to the motorcycle as are received from the manufacturer of
31
motorcycles for the repurchase of the motorcycle whether the repurchase was voluntary or not
32
towards the purchase of a new or used motorcycle by the buyer. For the purpose of this subsection,
33
the word “motorcycle” means a motorcycle not used for hire and does not refer to any other type
34
of motor vehicle.

LC004263 - Page 28 of 31
1

(69) Qualified data center equipment. From the sale and from the storage, use, or other
2
consumption in this state, qualified data center equipment as defined in § 42-64-3 and as certified
3
pursuant to § 42-64-43(c).
4
SECTION 4. Section 39-26.9-2 of the General Laws in Chapter 39-26.9 entitled "Labor
5
Standards in Renewable Energy Projects" is hereby amended to read as follows:
6

39-26.9-2. Definitions.
7
For the purposes of this chapter:
8
(1) “Approved apprenticeship program” or “apprenticeship program” means an
9
apprenticeship program that has been approved by the U.S. Department of Labor, or by a
10
recognized state apprenticeship agency, pursuant to 29 C.F.R. Parts 29 and 30; however, such
11
programs shall not include those that have obtained only provisional approval status. The required
12
apprenticeship programs may either be programs that have specifically allocated funding and are
13
subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.
14
(“ERISA”), or non-ERISA programs financed by general funds of employers.
15
(2) “Covered project” means a
qualified data center pursuant to § 42-64-3 or a
renewable
16
energy project
that
, which renewable energy project
:
17
(i) Utilizes renewable energy resources;
18
(ii) Is situated on land;
19
(iii) Is situated on or in water;
20
(iv) Has a construction commencement date on or after April 1, 2023;
21
(v) Has a total nameplate capacity of one megawatt (1 MW) or more in aggregate size; and
22
(vi) Is constructed and/or operated pursuant to chapter 26.1, 26.4, or 26.6 of this title.
23
(3) “Department” means the department of labor and training.
24
(4) “Director” means the director of the department of labor and training.
25
(5) “Labor organization” means any organization that exists and is constituted for the
26
purpose, in whole or in part, of collective bargaining, or of dealing with employers concerning
27
grievances, terms or conditions of employment, or of other mutual aid or protection and that is not
28
a company union as defined in § 28-7-3.
29
(6) “Labor peace agreement” means an agreement between an entity and a labor
30
organization that, at a minimum, protects the state’s proprietary interest by prohibiting labor
31
organizations and members from engaging in picketing, work stoppages, boycotts, and any other
32
economic interference during the deployment of a covered project. This agreement means that the
33
applicant has agreed not to disrupt efforts by the labor organizations to communicate with, and
34
attempt to organize and represent, the applicant’s employees. This requirement shall not be

LC004263 - Page 29 of 31
1
applicable to maintenance work performed on renewable energy solar projects
or qualified data
2
centers pursuant to § 42-64-3
.
3
(7) “Renewable energy project” means the construction, installation, use, maintenance,
4
operation, changing, or retiring of a renewable energy resource.
5
(8) “Renewable energy resources” means any renewable power generation source listed in
6
§ 39-26-5(a).
7
SECTION 5. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND COMMERCE
CORPORATION
***
1
This act would establish property, tangible, sales and use tax exemptions as incentives for
2
the location of qualified data centers in Rhode Island upon a minimum qualified investment of two
3
hundred million dollars ($200,000,000) in a designated enterprise zone and four hundred million
4
dollars ($400,000,000) in a non-enterprise zone. The application requirements and approval process
5
would be in a form and manner prescribed by the Rhode Island commerce corporation.
6
This act would take effect upon passage.
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