Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 10 - Withholding Tax
Part 1 - Withholding Tax on the Sale of Real Property by Nonresidents (280-RICR-20-10-1)
Section 280-RICR-20-10-1.5 - Definitions

A. "Nonresident corporation" means, for purposes of this regulation, a corporation that is neither incorporated in this state nor authorized by the Secretary of State, Board of Bank Incorporation or Insurance Division of the Department of Business Regulation to do business in this state.

B. "Nonresident individual" means an individual who does not meet the definition of "resident individual" under R.I. Gen. Laws § 44-30-5. That section defines "resident individual" as one who is domiciled in this state or as one who is not domiciled in this state but maintains a permanent place of abode in this state and is in this state for an aggregate of more than one hundred eighty three (183) days of the taxable year, unless the individual is in the Armed Forces of the United States. If up to and including the closing date of sale an individual is a resident of this state but intends to move to another state immediately after the closing, that individual shall be deemed a resident individual for purposes of R.I. Gen. Laws § 44-30-71.3 only.

C. "Nonresident partnership" means a partnership in which any one of its partners is a nonresident individual, estate, trust or corporation.

D. "Nonresident estate or trust" shall be determined in accordance with the provisions of R.I. Gen. Laws § 44-30-5.

E. "Total amount paid" means the net proceeds of the sale actually paid to the nonresident seller including the fair market value of any property transferred to the seller.

F. "Net proceeds" means the amount actually paid to the seller at the closing, i.e., the total sales price less mortgages, liens and selling expenses such as real estate commissions, attorney's fees, real estate conveyance tax stamps and termite, heating, radon, or other inspection fees required of the seller. Only mortgages and liens on the property being sold may be deducted from the sales price.

G. "Gain" means, in general, the excess of sales price over the seller's cost or other basis as determined in accordance with the Internal Revenue Code sections and applicable Rhode Island tax law and pertaining to the seller and to the seller's tax year in which the sale occurs.

H. "Gain method" means that special method by which withholding is made for a nonresident seller when the nonresident seller has not only filed an election with the Division of Taxation (Form RI 71.3 Election) to have withholding based on gain but also has received a Certificate of Withholding Due (Form RI 71.3 Certificate) from the Division of Taxation for presentation at the closing. Refer to the Compliance provisions below.

I. "Tax-exempt organization" means the seller is exempt from taxation by Rhode Island charter or by specific authorization as a tax-exempt organization under Internal Revenue Code section 501(c) . Nonresident organizations holding IRC 501(c) status but which have unrelated business income tax due for this transaction, are subject to the provisions of R.I. Gen. Laws § 44-30-71.3.