The State of Connecticut and Commonwealth of
Massachusetts do not assess a tangible property tax on wholesale inventory.
At present there are no wholesalers in the Town of Portsmouth; therefore,
the Town derives no revenue from the wholesale inventory tax. A guarantee
of exemption from wholesale inventory taxes is expected to induce
businesses having wholesale inventories to locate in Portsmouth, resulting
in an increased tax base and an increased level of employment. In
order to provide such an inducement, it is necessary to provide an
exemption pursuant to R.I.G.L. § 44-3-29, as amended, for
a period of 25 years.
As used in this article, the following terms
shall have the meanings indicated:
INVENTORY or STOCK-IN-TRADE
Includes the merchandise kept on hand by a wholesaler for
sale in the normal and regular course of a wholesale business.
WHOLESALER
Includes a person, partnership, corporation or other business
entity engaged in the business of selling goods for subsequent resale
by its customers. Except as provided herein, no distinction shall
be drawn between a wholesaler, all or a portion of the sales of which
are sales to one or more customers affiliated with the wholesaler,
and a wholesaler, the sales of which are exclusively sales to customers
not affiliated with such wholesaler. A wholesaler shall be considered
affiliated with customers if it controls, is controlled by or is under
common control with the customers.
In the event that a wholesaler sold inventory
or stock-in-trade both at wholesale and at retail in the preceding
calendar year, the Tax Assessor shall assess on the same basis as
the retailer's inventory or stock-in-trade as of December 31 of such
year, to the extent permitted by applicable law, notwithstanding any
exemption permitted hereunder, that proportion of inventory or stock-in-trade
of such wholesaler which shall be equal to the percentage of such
wholesaler's total sales during the preceding calendar year that were
at retail. For the purposes of this section, sales at retail shall
not include sales to employees of the wholesaler or to employees of
its affiliates. If retail sales are less than 1% of total sales during
such year, it shall be deemed that no sales were made at retail during
such year. All sales of a wholesaler to a customer which is an affiliated
entity shall be deemed to be retail sales for the purpose of this
section if more than half of the dollar volume of the sales of such
affiliated entity is made within the Town of Portsmouth.
The exemption provided in this article shall
not be granted to any wholesaler or commercial concern relocating
from any other Rhode Island municipality to the Town of Portsmouth,
unless said municipality has an ordinance exempting wholesale inventories
from taxation.
This article shall be effective with respect
to the tax assessments to be made as of December 31, 1993, and thereafter,
and any exemption from tax contained herein may not be repealed with
respect to tax assessments to be made prior to December 31, 2018,
provided that the foregoing shall not preclude or restrict amendments
to procedural or definitional portions of this article to take account
of changes in law or circumstances or better to carry out the intentions
of the Town Council. All ordinances or portions thereof inconsistent
herewith are hereby repealed.