The Rhode Island State Budget Bill recently submitted to the General Assembly for consideration for the fiscal year beginning July 1, 2012 includes amendments to the sales and use tax law. The bill proposes to extend the sales tax to a wide array of services. Outlined below is a list of affected services.

Taxicab and Limousine. Primarily engaged in providing passenger transportation by automobile, van or luxury sedans, not operated over regular routes and on regular schedules. (NAICS #485310 and 485320)

Charter Bus. Charter bus services that meet customers’ road transportation needs and generally do not operate over regular routes and on regular schedules. (NAICS #485510)

All Other Transit and Ground Passenger Transportation. Primarily engaged in operating shuttle services and vanpools, generally providing travel on regular routes and on regular schedules between hotels, airports or other destination points. (NAICS #485999)

General Freight Trucking, Local. Usually provide trucking within a metropolitan area which may cross state lines, generally the trips are same-day return. (NAICS #484110)

Used Household and Office Goods Moving. Primarily engaged in providing local or long-distance trucking of used household, used institutional, or used commercial furniture and equipment; incidental packing and storage activities are often provided. (NAICS #484210)

General Warehousing and Storage. Generally handle goods in containers, such as boxes, barrels, and/or drums, using equipment, such as forklifts, pallets and racks or products. (NAICS #493110)

Refrigerated Warehousing and Storage. The services provided include blast freezing, tempering and modified atmosphere storage: storage of furs for the trade is included. (NAICS #493120)

Farm Products Warehousing and Storage. Primarily engaged in operating bulk farm warehousing and storage facilities, including grain elevators. (NAICS #493130)

Other Warehousing and Storage. Primarily engaged in operating warehousing and storage facilities. (NAICS #493190)

Lessors of Mini-warehouses and Self-Storage Units-Storage Units. Primarily engaged in renting or leasing space for self-storage by providing secure space (i.e., rooms, compartments, lockers, containers, or outdoor space) where clients can store and retrieve their goods. (NAICS #531130)

Pet Care. Primarily engaged in providing pet care services (except veterinary), such as boarding, grooming, sitting and training pets. (NAICA #812910)

Car Washes. Primarily engaged in cleaning and/or waxing automotive vehicles, such as passenger cars, vans, trucks, and trailers (NAICS #811192)

The proposed sales tax changes would require service providers to register, collect and remit 7% sales taxes in the same manner as retailers selling taxable goods under the law. In the coming weeks, the state General Assembly will be discussing and debating the sales tax proposals in conjunction with the overall review of the state budget bill. Affected trade and industry groups are already gearing up to fight these proposals.

If you would like more information, please contact a member of KLR’s State and Local Tax Team.

KLR’s tax professionals are CPAs and attorneys who have specialized training and experience in all matters of Federal, State and Local Tax Issues. Their expertise in tax strategies for individuals and families includes everything from estate gift & trust services, voluntary disclosure issues, transfer pricing, M&A assistance, cost segregation studies and research & development tax credits.