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Rhode Island Internet Tax

Rhode Island is also inching towards an Internet tax. Their version of the bill has been added to the 2010 Budget that was passed by the House earlier this week. The conditions are similar to that of  the NY and Hawaii laws but with a lower threshold. The sales threshold in Rhode Island is set at $5,00o in total sales in the previous four quarters from RI Affiliates to RI residents.

Important to mobilize now and contact your legislators. Merchants have already announced they will terminate affiliate.

Over the past year I have outlined several times the actions you should take before an Internet tax law passes in your state. First and foremost is to be prepared. Please see Next Steps for Affiliates and Merchants

Here’s a summary of the bill in Rhode Island, which was passed by House as part of  upcoming budget. (Please note: text is from bill H 6164 budget version is similar)

44-18-15. “Retailer” defined. — (a) “Retailer” includes:
       (1) Every person engaged in the business of making sales at retail, including sales at
 auction of tangible personal property owned by the person or others.
       (2) Every person making sales of tangible personal property through an independent
 contractor or other representative, if the retailer enters into an agreement with a resident of this
 state, under which the resident, for a commission or other consideration, directly or indirectly
refers potential customers, whether by a link on an Internet website or otherwise, to the retailer,
 provided the cumulative gross receipts from sales by the retailer to customers in the state who are
 referred to the retailer by all residents with this type of an agreement with the retailer, is in excess
 of five thousand dollars ($5,000) during the preceding four (4) quarterly periods ending on the
 last day of March, June, September and December. Such retailer shall be presumed to be
 soliciting business through such independent contractor or other representative, which
 presumption may be rebutted by proof that the resident with whom the retailer has an agreement
 did not engage in any solicitation in the state on behalf of the retailer that would satisfy the nexus
 requirement of the United States Constitution during such four (4) quarterly periods.

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