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

Current through June 14, 2024
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.