Rhode Island Tax Division Rejects Sales Tax Exemption for Nonprofit Hospital

The Rhode Island Division of Taxation issued a final decision and order rejecting and modifying the Hearing Officer’s recommendation to grant a sales and use tax exemption certificate to taxpayer. The dispute centered on whether taxpayer, a nonprofit hospital service corporation and nonprofit medical service corporation, operated exclusively for charitable purposes as required for the exemption. While taxpayer argued that its enabling statutes and mission demonstrated its exclusive charitable purpose, the Tax Administrator found that taxpayer failed to prove by competent evidence that it operated exclusively for charitable purposes, as its operations mirrored for-profit health insurance carriers by collecting premiums, ...