State of Rhode Island - Division of Taxation
Sales and Use Tax
Regulation SU 87-113
Use Tax on Items Purchased from Out-of-State Suppliers — Due Date of Tax
Section 44-18-20 imposes an excise tax on the "storage, use, or other consumption in this state of tangible personal property. . ."
Unlike liability for the sales tax, which the retailer is obliged to pay to the state on or before the 20th day of the month following the month in which the sales are made, liability for the use tax does not arise until a certain event occurs -- that is, until the property which has been purchased outside of Rhode Island is stored, used, or otherwise consumed in this state. Accordingly, in considering USE TAX liability, just how and when such property is paid for by the purchaser is not controlling.
(A) Completed items (e.g. a milling machine, lathe, television set, washing machine, etc.) are used or stored in Rhode Island by the local purchaser thereof upon their delivery into this state. The use tax on such items must therefore be paid on or before the 20th day of the month following the month during which such delivery occurs.
When several completed items have been purchased at the same time from an out-of-state supplier, regardless of how payment therefor is made, and where the cost of each such completed item is either designated or can be determined, and where such items are delivered into Rhode Island at various times over a period of months, then the use tax must be paid by the 20th day of the month following the respective months during which such items were successively delivered into this state. Each such item is regarded as a separate unit.
(B) Uncompleted items usually consist of various component parts delivered into Rhode Island and thereafter assembled before the local purchaser thereof can store, use, or otherwise consume such fully assembled item.
Therefore, regardless of the date of purchase and of the terms for payment, the purchaser would not be obliged to pay the use tax until the 20th day of the month following the month during which delivery into this state of the final shipment of the component parts and completion of the assembly, erection or installation of the machinery or equipment is made.
R. GARY CLARK
DATE: May 1, 1987