R.I. Gen. Laws § 44-3-29.1 — Wholesale and retail inventory tax phase out

(a) Beginning July 1, 1999, the city council or town council of any municipality shall,
by ordinance, phase out, over a ten (10) year period, the stock in trade or inventory
tax of wholesalers and retailers. The rate schedule to be implemented by the cities
and towns is established in this section.
(b) “Inventory”, as it refers to wholesalers, “stock in trade”, as it refers to wholesalers,
and “wholesaler” have the same meaning as defined in § 44-3-19.
(c) “Inventory”, as it refers to retailers, “stock in trade”, as it refers to retailers,
and “retailer” have the same meaning as defined in § 44-3-40.
(d) The rate schedule for the ten (10) year phase out of the wholesale and retail inventory
tax is as follows:
Year
Maximum Tax Rate
FY 1999
set by local officials
FY 2000
ninety percent (90%) of FY 1999 rate
FY 2001
eighty percent (80%) of FY 1999 rate
FY 2002
seventy percent (70%) of FY 1999 rate
FY 2003
sixty percent (60%) of FY 1999 rate
FY 2004
fifty percent (50%) of FY 1999 rate
FY 2005
forty percent (40%) of FY 1999 rate
FY 2006
thirty percent (30%) of FY 1999 rate
FY 2007
twenty percent (20%) of FY 1999 rate
FY 2008
ten percent (10%) of FY 1999 rate
FY 2009
no tax authorized
(e) In the event that a wholesaler sold inventory or stock in trade both at wholesale
and at retail in the preceding calendar year, the tax assessor of the municipality
shall assess on the same basis as a retailer’s inventory or stock in trade as of December
31 of that year, to the extent permitted by applicable law, notwithstanding any freeze
of assessed valuation or exemption permitted pursuant to § 44-5-12(c), that proportion of inventory or stock in trade of the wholesaler which are equal
to the percentage of the wholesaler’s total sales during the preceding calendar year
that were at retail. For the purposes of this paragraph, “sales at retail” do include
sales to employees of the wholesaler or to employees of its affiliates. If retail
sales are less than one percent (1%) of total sales during the year, it is deemed
that no sales were made at retail during the year. All sales of a wholesaler to a
customer, which is an affiliated entity, are deemed to be retail sales for the purposes
of this subsection if more than half of the dollar volume of the sales of the affiliated
entity is made within the municipality.
(f) For purposes of this section, a wholesaler is considered affiliated with customers
if it controls, or is under common control with the customers.
(g) In the event that a wholesaler or retailer subject to the inventory tax commences
operations in a particular city or town after fiscal year 1999, the tax assessor for
that municipality shall determine what would have been the value of the inventory
as of December 1998, adjusting the inventory value to fiscal year 1999 using the changes
in the consumer price index — all urban consumers (CPI-U) published by the Bureau
of Labor Statistics of the United States Department of Labor. The director of the
department of revenue shall annually publish an adjustment schedule.
(h) This section also applies to motor vehicle dealers, as defined in § 31-5-5.
(i) The assent of two-thirds (â
”) of the members elected to each house of the general assembly
is required to repeal or amend this section.