Current through September 18, 2024
A.
Each person before obtaining an original or transfer registration for any
article or commodity in this state, which article or commodity is required to
be licensed or registered in the state, shall furnish evidence satisfactory to
the Tax Administrator that any tax due has been paid. The sales or use tax on
any motor vehicle and/or recreational vehicle requiring registration by the
Registry of Motor Vehicles shall not be added by the retailer to the sale price
or charge but shall be paid directly by the purchaser to the Tax
Administrator.
B. Retailers making
sales of vehicles not requiring registration by the Registry of Motor Vehicles
are required to add and collect the tax.
1.
EXAMPLE: A retailer selling farm tractors, construction vehicles, trail bikes,
motor bikes, or the like, would be required to add and collect the sales
tax.
C. Prior to
registration the sales transaction and purported use have to be segregated into
one of the following three categories:
1.
Sales made by Rhode Island motor vehicle dealers;
2. Sales made by persons other than a Rhode
Island motor vehicle dealer; or
3.
Purchases of motor vehicles for exempt use irrespective of from whom it was
purchased.
D. Sales made
by Rhode Island Motor Vehicle Dealers
1.
Registration requirements for dealers are the same as for any
retailer.
2. Although the dealer
cannot add the tax to the sales price except when required on a sale to a
nonresident (see §28.24 of this Part) the monthly return filing
requirements are the same as any other retailer except the dealer may deduct
the amount of gross receipts derived from sales of motor vehicles from the
total gross receipts, provided, the dealer can substantiate these amounts as
mentioned below.
3. Each dealer at
the time a motor vehicle is sold prepares the details of the sales transaction
on such form as the Tax Administrator may prescribe. The presently prescribed
multiple four-part form is entitled "Dealer's Statement of Sale-Motor Vehicle,
Purchaser's Tax Return (T- 336-1)." The Tax Administrator requires the
signatures of the purchaser and the dealer or his or her authorized
agent.
4. The first two copies are
given to the purchaser by the dealer for presentation with motor vehicle
registration forms at the Division of Motor Vehicles.
5. The Division of Taxation's copy is then
submitted with the dealer's quarterly reconciliation sales and use tax return.
The total sales price of all individual copies submitted must equal the
deduction amount taken for sales of motor vehicles. The dealer maintains the
final copy with its records.
6.
Forms have to be prepared for all sales including those sales to other motor
vehicle dealers which are considered sales for resale and those sales to bona
fide nonresidents whether taxable or not.
7. When a dealer is required to collect tax
from a nonresident, refer to §28.24 of this Part for procedures relating
to §§
28.10(D)(4) and
(5) of this Part above.
E. Out-of-State Motor Vehicle Dealer Sales
1. The use tax applies to the sale price of
automobiles delivered at a factory or place of business in another state for
use in this state. The sale price in this case is the amount actually agreed to
be paid for the goods even though such amount is less than the list price at a
Rhode Island seller's place of business. If the sales contract is entered into
with a Rhode Island automobile dealer, under the law the purchaser must
nevertheless pay the sales or use tax due directly to the Tax Administrator or
his/her agent.
2. If the
automobile is purchased directly from the factory or dealer in another state or
from any other person for use in this state, the purchaser must make payment of
the tax to the Tax Administrator or his/her agent as a condition precedent to
obtaining a registration for the motor vehicle.
3. The purchaser shall prepare a Use Tax
Return-Motor Vehicles form (T- 334-1) for presentation with motor vehicle
registration forms at the Registry of Motor Vehicles.
4. A bill of sale or copy thereof
substantiating the selling price must also be shown.
F. Purchases Exempt from the Tax
1. A Sales or Use Tax Exemption Certificate
-- Motor Vehicles (Form T- 333-1) shall be prepared and all reasons for
claimed exemption shall be stated.
2. The Exemption Certificate with any
affidavit form or other substantiating data required by the Tax Administrator
must be presented with motor vehicle registration forms at the Division of
Motor Vehicles.
G. Any
tax form or exemption form presented at the Registry of Motor Vehicles must be
approved by the Tax Administrator or his/her authorized representative prior to
the issuance of a motor vehicle registration.
