Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 70 - Sales and Use Tax
Part 35 - Cellular Telephone - Sold in Bundled Transactions - Promotional Use by Carriers (280-RICR-20-70-35)
Section 280-RICR-20-70-35.5 - Bundled Transactions

A. It has become a common practice in the cellular telephone industry for dealers to sell cellular telephones to their customers in so-called "bundled" transactions. In these transactions, a dealer gives a purchaser an allowance with respect to the usual retail sales price of the cellular telephones in exchange for the purchaser's agreement to become and to remain a subscriber with a particular cellular phone service carrier for a minimum service period. The carrier, in turn, pays the dealer a set amount on behalf of each new subscriber pursuant to an agreement with the dealer.

B. For sales tax purposes, the sales price of a cellular telephone sold in a "bundled" transaction is the same as the sales price of the telephone sold in an "unbundled" transaction. Therefore, the dealer must compute the sales tax based upon its retail sales price of the cellular phone and the amount received from the carrier pursuant to the agreement with the dealer.