R.I. Gen. Laws § 44-18.2-2 — Definitions

For the purposes of this chapter:
(1) “Division of taxation” means the Rhode Island department of revenue, division of taxation.
The division may also be referred to in this chapter as the “division of taxation,”
“tax division,” or “division.”
(2) “In-state customer” means a person or persons who makes a purchase of tangible personal
property, prewritten computer software delivered electronically or by load and leave
as defined in § 44-18-7.1(g)(v), vendor-hosted prewritten computer software, specified digital products, and/or taxable
services as defined under § 44-18-1 et seq. for use, storage, and/or other consumption in this state.
(3) “In-state software” means software used by in-state customers on their computers,
smartphones, and other electronic and/or communication devices, including information
or software such as cached files, cached software, or “cookies,” or other data tracking
tools, that are stored on property in this state or distributed within this state,
for the purpose of purchasing tangible personal property, prewritten computer software
delivered electronically or by load and leave, vendor-hosted prewritten computer software,
specified digital products, and/or taxable services.
(4) “Marketplace” means a physical or electronic place including, but not limited to,
a store, booth, internet website, catalog, television or radio broadcast, or a dedicated
sales software application where tangible personal property, prewritten computer software
delivered electronically or by load and leave, vendor-hosted prewritten computer software,
specified digital products, and/or taxable services is/are sold or offered for sale
for delivery in this state regardless of whether the tangible personal property, prewritten
computer software delivered electronically or by load and leave, vendor-hosted prewritten
computer software, or specified digital products have a physical presence in the state.
(5) “Marketplace facilitator” means any person or persons that contracts or otherwise
agrees with a marketplace seller to facilitate for consideration, regardless of whether
deducted as fees from the transaction, the sale of the marketplace seller’s products
through a physical or electronic marketplace operated by the person or persons, and
engages:
(a) Directly or indirectly, through one or more affiliated persons in any of the following:
(i) Transmitting or otherwise communicating the offer or acceptance between the buyer
and seller;
(ii) Owning or operating the infrastructure, electronic or physical, or technology that
brings buyers and sellers together;
(iii) Providing a virtual currency that buyers are allowed or required to use to purchase
products from the seller; or
(iv) Software development or research and development activities related to any of the
activities described in subsection (5)(b), if such activities are directly related
to a physical or electronic marketplace operated by the person or an affiliated person;
and
(b) In any of the following activities with respect to the seller’s products:
(i) Payment processing services;
(ii) Fulfillment or storage services;
(iii) Listing products for sale;
(iv) Setting prices;
(v) Branding sales as those of the marketplace facilitator;
(vi) Order taking;
(vii) Advertising or promotion; or
(viii) Providing customer service or accepting or assisting with returns or exchanges.
(6) “Marketplace seller” means a person, not a related party to a marketplace facilitator,
who has an agreement with a marketplace facilitator and makes retail sales of tangible
personal property, prewritten computer software delivered electronically or by load
and leave, vendor-hosted prewritten computer software, specified digital products,
and/or taxable services through a marketplace owned, operated, or controlled by a
marketplace facilitator, whether or not such person is required to register to collect
and remit sales tax.
(7) “Non-collecting retailer” means any person or persons who meets at least one of the
following criteria:
(A) Uses in-state software to make sales at retail of tangible personal property, prewritten
computer software delivered electronically or by load and leave, and/or taxable services;
or
(B) Sells, leases, or delivers in this state, or participates in any activity in this
state in connection with the selling, leasing, or delivering in this state, of tangible
personal property, prewritten computer software delivered electronically or by load
and leave, and/or taxable services for use, storage, distribution, or consumption
within this state. This includes, but shall not be limited to, any of the following
acts or methods of transacting business:
(i) Engaging in, either directly or indirectly through a referrer, retail sale facilitator,
or other third party, direct response marketing targeted at in-state customers. For
purposes of this subsection, direct response marketing includes, but is not limited
to, sending, transmitting, or broadcasting via flyers, newsletters, telephone calls,
targeted electronic mail, text messages, social media messages, targeted mailings;
collecting, analyzing and utilizing individual data on in-state customers; using information
or software, including cached files, cached software, or “cookies,” or other data
tracking tools, that are stored on property in or distributed within this state; or
taking any other action(s) that use persons, tangible property, intangible property,
digital files or information, or software in this state in an effort to enhance the
probability that the person’s contacts with a potential in-state customer will result
in a sale to that in-state customer;
(ii) Entering into one or more agreements under which a person or persons who has physical
presence in this state refers, either directly or indirectly, potential in-state customers
of tangible personal property, prewritten computer software delivered electronically
or by load and leave, and/or taxable services to the non-collecting retailer for a
fee, commission, or other consideration whether by an internet-based link or an internet
website, or otherwise. An agreement under which a non-collecting retailer purchases
advertisements from a person or persons in this state to be delivered in this state
on television, radio, in print, on the internet or by any other medium in this state,
shall not be considered an agreement under this subsection (ii), unless the advertisement
revenue or a portion thereof paid to the person or persons in this state consists
of a fee, commission, or other consideration that is based in whole or in part upon
sales of tangible personal property, prewritten computer software delivered electronically
or by load and leave, and/or taxable services; or
(iii) Using a retail sale facilitator to sell, lease, or deliver in this state, or participate
in any activity in this state in connection with the selling, leasing, or delivering
in this state, of tangible personal property, prewritten computer software delivered
electronically or by load and leave, and/or taxable services for use, storage, or
consumption in this state;
(C) Uses a sales process that includes listing, branding, or selling tangible personal
property, prewritten computer software delivered electronically or by load and leave,
and/or taxable services for sale, soliciting, processing orders, fulfilling orders,
providing customer service and/or accepting or assisting with returns or exchanges
occurring in this state, regardless of whether that part of the process has been subcontracted
to an affiliate or third party. The sales process for which the in-state customer
is charged not more than the basic charge for shipping and handling as used in this
subsection shall not include shipping via a common carrier or the United States mail;
(D) Offers its tangible personal property, prewritten computer software delivered electronically
or by load and leave, and/or taxable services for sale through one or more retail
sale facilitators that has physical presence in this state;
(E) Is related to a person that has physical presence in this state, and such related
person with a physical presence in this state:
(i) Sells tangible personal property, prewritten computer software delivered electronically
or by load and leave, and/or taxable services that are the same or substantially similar
to that sold by a non-collecting retailer under a business name that is the same or
substantially similar to that of the non-collecting retailer;
(ii) Maintains an office, distribution facility, salesroom, warehouse, storage place, or
other similar place of business in this state to facilitate the delivery of tangible
personal property, prewritten computer software delivered electronically or by load
and leave, and/or taxable services sold by the non-collecting retailer;
(iii) Uses, with consent or knowledge of the non-collecting retailer, trademarks, service
marks, or trade names in this state that are the same or substantially similar to
those used by the non-collecting retailer;
(iv) Delivers or has delivered (except for delivery by common carrier or United States
mail for which the in-state customer is charged not more than the basic charge for
shipping and handling), installs, or assembles tangible personal property in this
state, or performs maintenance or repair services on tangible personal property in
this state, which tangible personal property is sold to in-state customers by the
non-collecting retailer;
(v) Facilitates the delivery of tangible personal property purchased from a non-collecting
retailer but delivered in this state by allowing an in-state customer to pick up the
tangible personal property at an office distribution facility, salesroom, warehouse,
storage place, or other similar place of business maintained in this state; or
(vi) Shares management, business systems, business practices, computer resources, communication
systems, payroll, personnel, or other such business resources and activities with
the non-collecting retailer, and/or engages in intercompany transactions with the
non-collecting retailer, either or both of which relate to the activities that establish
or maintain the non-collecting retailer’s market in this state.
(F) Any person or persons who meets at least one of the criteria in subsections (7)(A)
— (7)(E) above shall be presumed to be a non-collecting retailer.
(G) The term “non-collecting retailer” will no longer apply to any entity that meets the
definition of this subsection effective ninety (90) days after March 29, 2019, at
which time such entity shall be classified as a “remote seller” as referenced in § 44-18-15.2.
(8) “Person” means person as defined in § 44-18-6.
(9) “Referrer” means every person who:
(A) Contracts or otherwise agrees with a retailer to list and/or advertise for sale in
this state tangible personal property, prewritten computer software delivered electronically
or by load and leave, vendor-hosted prewritten computer software, and/or taxable services
in any forum, including, but not limited to, a catalog or internet website;
(B) Receives a fee, commission, and/or other consideration from a retailer for the listing
and/or advertisement;
(C) Transfers, via in-state software, internet link, or otherwise, an in-state customer
to the retailer or the retailer’s employee, affiliate, or website to complete a purchase;
and
(D) Does not collect payments from the in-state customer for the transaction.
(E) A person or persons who engages in the activity set forth in all of the activities
set forth in subsections (9)(A) — (9)(D) above shall be presumed to be a referrer.
(10) “Related” means:
(A) Having a relationship with the non-collecting retailer within the meaning of the internal
revenue code of 1986 as amended; or
(B) Having one or more ownership relationships and a purpose of having the ownership relationship
is to avoid the application of this chapter.
(11) A “retail sale” or “sale at retail” means any retail sale or sale at retail as defined
in § 44-18-8.
(12) “Retail sale facilitator” means any person or persons that facilitates a sale by a
retailer by engaging in the following types of activities:
(A) Using in-state software to make sales at retail of tangible personal property, prewritten
computer software delivered electronically or by load and leave, and/or taxable services;
or
(B) Contracting or otherwise agreeing with a retailer to list and/or advertise for sale
tangible personal property, prewritten computer software delivered electronically
or by load and leave, and/or taxable services in any forum, including, but not limited
to, a catalog or internet website; and
(C) Either directly or indirectly through agreements or arrangements with third parties,
collecting payments from the in-state customer and transmitting those payments to
a retailer. A person or persons may be a retail sale facilitator regardless of whether
they deduct any fees from the transaction. The division may define in regulation circumstances
under which a retail sale facilitator shall be deemed to facilitate a retail sale.
(D) A person or persons who engages in the type of activity set forth in subsection (12)(A)
above or both of the types of activities set forth in subsections (12)(B) and (12)(C)
above shall be presumed to be a retail sale facilitator.
(E) The term “retail sale facilitator” will no longer apply to any entity that meets the
definition of this subsection effective ninety (90) days after March 29, 2019, at
which time such entity shall be classified as a “marketplace facilitator” as referenced
above in subsection (5) of this section.
(13) A “retailer” means retailer as defined in § 44-18-15.
(14) Specified digital products refers to the same term as defined in § 44-18-7.1(x) effective July 1, 2019.
(15) “State” means the State of Rhode Island.
(16) “Streamlined agreement” means the Streamlined Sales and Use Tax Agreement as referenced
in § 44-18.1-1 et seq.
(17) “Vendor-hosted prewritten computer software” refers to the same term as defined in
§ 44-18-7.1(g)(vii) effective October 1, 2018.