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S 3084Sales & Use

Taxation - Sales and Use Taxes - Liability and Computation

Allocates rideshare sales tax revenue to a restricted account for funding RIPTA paratransit services and reduces state administrative cost recoveries.

Held for study
Population
Affected
45
Email Legislator
Introduced Mar 13, 2026Committee Senate Finance

Plain-English Summary

This legislation amends Rhode Island tax and finance laws to provide dedicated funding for the Rhode Island Public Transit Authority (RIPTA). Specifically, it mandates that all sales and use tax revenue collected from transportation network companies (like Uber and Lyft) be deposited into a new restricted receipt account. This money is designated exclusively for funding paratransit transportation and the "RIDE Anywhere" program. Additionally, the bill reduces the state's indirect cost recovery rate on restricted accounts from 15% to 10% and explicitly exempts this new RIPTA account from those cost recovery fees.

For younger readers

This new law changes how the state spends some of the tax money it collects. When people pay for rides using apps like Uber or Lyft, they pay a tax. Right now, that money goes into a big pot for the whole state to use. This law says that money must instead go into a special piggy bank just for the bus system (RIPTA). This money will be used specifically to help people who have trouble getting around, like people in wheelchairs, so they can get rides to where they need to go.

Who & Where It Applies

Impacted groups
Paratransit usersElderly residentsDisabled residentsTransportation Network Companies (Uber/Lyft)RIPTA riders
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Secures dedicated, reliable funding for paratransit services, directly benefiting the elderly and disabled communities who rely on public transportation for mobility and independence.
  • Ensures that revenue generated by private transportation corporations is reinvested into public infrastructure, strengthening the social safety net rather than being lost in the general fund.
  • Protecting the transit fund from indirect cost recovery ensures that 100% of the allocated tax revenue goes directly to services for riders rather than administrative overhead.
  • Tying essential public transit funding to the performance of gig-economy corporations (like Uber/Lyft) creates a volatile revenue stream dependent on private sector profits rather than stable progressive taxation.
  • The reduction of the general indirect cost recovery rate from 15% to 10% across various accounts could reduce the General Fund's ability to support other broad social programs and state services.
  • While it funds paratransit, it acts as a piecemeal solution that does not address the larger, systemic underfunding issues facing the entire public transit system.
For Conservatives
  • Implements a user-fee logic where taxes generated by the transportation sector are legally fenced off to pay for transportation needs, preventing the money from being spent on unrelated government programs.
  • Reduces the "indirect cost recovery" rate from 15% to 10%, effectively lowering the amount of money the central state bureaucracy can skim from restricted funds for administrative overhead.
  • Increases transparency by creating a specific restricted receipt account, making it easier to track exactly how much revenue is collected and spent on these specific services.
  • Creates yet another "restricted receipt account," complicating the state budget and reducing the legislature's flexibility to allocate funds where they might be needed most during a fiscal crisis.
  • Effectively subsidizes a government-run transit authority (RIPTA) using revenue derived from private market competitors, potentially distorting the transportation market.
  • By exempting this account from cost recovery, it forces the general taxpayer to subsidize the administrative costs of managing these funds and programs.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 14 additions · 1 deletion

SECTION 1. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes — Liability and Computation" is hereby amended by adding thereto the following section: 44-18-18.3. Rhode Island public transit authority operations allocation.

(a) All sales and use tax revenue collected from transportation network companies, as defined in § 44-18-7.3, shall be deposited in a restricted receipt account for the benefit of the Rhode Island public transit authority for purposes to fund paratransit transportation and RIDE Anywhere.

(b) There is created within the general fund a restricted receipt account known as the “Rhode Island public transit authority account”. Revenue collected from transportation network companies pursuant to subsection (a) of this section shall be deposited into this account and used to fund operations related to paratransit transportation and RIDE Anywhere to the Rhode Island public transit authority.

(c) The account created under this section shall be exempt from the indirect cost recovery provision set forth in § 35-4-27.

SECTION 2. Section 35-4-27 of the General Laws in Chapter 35-4 entitled "State Funds" is hereby amended to read as follows: 35-4-27. Indirect cost recoveries on restricted receipt accounts. Indirect cost recoveries of fifteen percent (15%) ten percent (10%) of cash receipts shall be transferred from all restricted receipt accounts, to be recorded as general revenues in the general fund. However, there shall be no transfer from cash receipts with restrictions received exclusively:

(1) From contributions from nonprofit charitable organizations; (2) From the assessment of indirect cost-recovery rates on federal grant funds; or (3) Through transfers from state agencies to the department of administration for the payment of debt service. These indirect cost recoveries shall be applied to all accounts, unless prohibited by federal law or regulation, court order, or court settlement. The following restricted receipt accounts shall not be subject to the provisions of this section: Executive Office of Health and Human Services HIV Care Grant Drug Rebates Health System Transformation Project Rhode Island Statewide Opioid Abatement Account HCBS Support-ARPA HCBS Admin Support-ARPA Department of Human Services Organ Transplant Fund Veterans’ home — Restricted account Veterans’ home — Resident benefits Pharmaceutical Rebates Account Demand Side Management Grants Veteran’s Cemetery Memorial Fund Donations — New Veterans’ Home Construction Commodity Supplemental Food Program-Claims Department of Health Pandemic medications and equipment account Miscellaneous Donations/Grants from Non-Profits State Loan Repayment Match Healthcare Information Technology Department of Behavioral Healthcare, Developmental Disabilities and Hospitals Eleanor Slater non-Medicaid third-party payor account Hospital Medicare Part D Receipts RICLAS Group Home Operations Group Home Facility Improvement Fund Commission on the Deaf and Hard of Hearing Emergency and public communication access account Department of Environmental Management National heritage revolving fund Environmental response fund II Underground storage tanks registration fees De Coppet Estate Fund Rhode Island Historical Preservation and Heritage Commission Historic preservation revolving loan fund Historic Preservation loan fund — Interest revenue Department of Public Safety E-911 Uniform Emergency Telephone System Forfeited property — Retained Forfeitures — Federal Forfeited property — Gambling Donation — Polygraph and Law Enforcement Training Rhode Island State Firefighter’s League Training Account Fire Academy Training Fees Account Attorney General Forfeiture of property Federal forfeitures Attorney General multi-state account Forfeited property — Gambling Department of Administration Health Insurance Market Integrity Fund RI Health Benefits Exchange Information Technology restricted receipt account Restore and replacement — Insurance coverage Convention Center Authority rental payments Investment Receipts — TANS OPEB System Restricted Receipt Account Grants Management Administration Office of Energy Resources OER Reconciliation Funding RGGI Executive Climate Change Coordinating Council Projects Electric Vehicle Charging Stations Operating and Maintenance Account Clean Transportation Programs Department of Housing Housing Resources and Homelessness Restricted Receipt Account Housing Production Fund Low-Income Housing Tax Credit Fund Department of Revenue Car Rental Tax/Surcharge-Warwick Share DMV Modernization Project Jobs Tax Credit Redemption Fund Legislature Audit of federal assisted programs Department of Children, Youth and Families Children’s Trust Accounts — SSI Military Staff RI Military Family Relief Fund RI National Guard Counterdrug Program Treasury Admin. Expenses — State Retirement System Retirement — Treasury Investment Options Defined Contribution — Administration - RR Violent Crimes Compensation — Refunds Treasury Research Fellowship Business Regulation Banking Division Reimbursement Account Office of the Health Insurance Commissioner Reimbursement Account Securities Division Reimbursement Account Commercial Licensing and Racing and Athletics Division Reimbursement Account Insurance Division Reimbursement Account Historic Preservation Tax Credit Account Rhode Island Cannabis Control Commission Marijuana Trust Fund Social Equity Assistance Fund Judiciary Arbitration Fund Restricted Receipt Account Third-Party Grants RI Judiciary Technology Surcharge Account Department of Elementary and Secondary Education Statewide Student Transportation Services Account School for the Deaf Fee-for-Service Account School for the Deaf — School Breakfast and Lunch Program Davies Career and Technical School Local Education Aid Account Davies — National School Breakfast & Lunch Program School Construction Services Office of the Postsecondary Commissioner Tuition Savings Program Fund Higher Education and Industry Center IGT STEM Scholarships Department of Labor and Training Job Development Fund Contractor Training Restricted Receipt Account Workers’ Compensation Administrative Account Rhode Island Council on the Arts Governors’ Portrait Donation Fund Statewide records management system account Rhode Island public transit authority account

SECTION 3. This act shall take effect on July 1, 2026.