Rhode Island § 44-3-29 - Property Subject to Taxation

§ 44-3-29. Exemption and/or valuation freeze of wholesaler’s inventory.

(a)(1) The city council or town council of any municipality may, by ordinance, wholly or partially exempt from taxation and/or freeze the valuation of stock in trade or inventory of wholesalers for a period of twenty-five (25) years.

(2) “Inventory” or “stock in trade” means and includes the merchandise kept on hand for sale in the normal and regular course of wholesale business.

(3)(i) “Wholesaler” means and includes a person, partnership, corporation, or other business entity engaged in the business of selling goods for subsequent resale by its customers. Except as provided in subsection (b) of this section, no distinction is drawn between:

(A) A wholesaler all or a portion of the sales of which are sales to one or more customers affiliated with the wholesaler, and

(B) A wholesaler the sales of which are exclusively sales to customers not affiliated with the wholesaler.

(ii) A wholesaler is considered affiliated with customers if it controls, is controlled by, or is under common control with the customers.

(b) 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 assessors 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 under this section, that proportion of inventory or stock in trade of the wholesaler which is 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 not 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.

(c) The city council or the town council of any municipality may, by ordinance, establish the application and/or verification procedures for taxpayers to avail themselves of the benefit of any exemption or valuation freeze permitted under this section as the city council or the town council deemed necessary.

(d) Nothing in this section is deemed to permit the exemption or stabilization for any wholesaler or commercial concern relocating from one city or town within the state of Rhode Island to another.