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S 3133Sales & Use

Taxation - Sales and Use Taxes - Liability and Computation

This bill dedicates tax revenue from rideshare companies to fund RIPTA and exempts these funds from state administrative fees.

Introduced
Population
Affected
35
Email Legislator
Introduced Mar 20, 2026Committee Senate Finance

Plain-English Summary

This legislation mandates that all sales and use tax revenue collected from transportation network companies (rideshare services like Uber and Lyft) be deposited into a dedicated restricted receipt account for the Rhode Island Public Transit Authority (RIPTA). Instead of this money going into the state's general fund, it will be used exclusively to fund RIPTA operations. Furthermore, the bill exempts this specific account from the standard fifteen percent indirect cost recovery charge that the state typically deducts from restricted accounts for administrative expenses.

For younger readers

When people use apps on their phones to get a ride from a driver (like Uber or Lyft), they pay a small tax. Right now, that money goes into a big pot of money for the whole state. This new law says that this specific money must be saved just for the public buses, called RIPTA. It helps pay for the buses that take people to school and work. The law also makes sure the state government doesn't take a cut of that money for other things, so the buses get to keep all of it.

Who & Where It Applies

Impacted groups
RIPTA passengersTransportation Network Companies (Uber/Lyft)RIPTA employeesState Budget OfficeGeneral State Taxpayers
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Secures a dedicated funding stream for public transit, which is essential for low-income residents, the elderly, and people with disabilities who rely on buses for mobility.
  • Supports environmental sustainability by financially bolstering mass transit, which helps reduce the number of individual cars on the road and lowers carbon emissions.
  • Prevents the state from siphoning off transit funds for general administrative costs, ensuring that every dollar collected is used directly for public services.
  • Ties critical public transit funding to the performance of the gig economy (rideshares), which is often criticized for exploiting workers and contributing to traffic congestion.
  • Does not address the need for progressive taxation on wealth or corporations, relying instead on consumption taxes that may affect working-class riders.
  • Creates a scenario where if rideshare usage drops (perhaps due to better transit or economic downturns), funding for public buses would automatically decrease.
For Conservatives
  • Utilizes a "user fee" logic where taxes generated by the transportation sector (rideshares) are used to fund transportation infrastructure, rather than drawing from unrelated tax bases.
  • Increases transparency in government spending by isolating specific revenues in a restricted account rather than allowing them to disappear into the general fund.
  • Accomplishes funding goals without enacting any new taxes or increasing tax rates on businesses or individuals.
  • Reduces the flexibility of the state budget by earmarking funds, making it harder for the government to address other fiscal priorities or emergencies.
  • Subsidizes a public transit authority that many conservatives view as inefficient, rather than forcing the agency to streamline operations and cut costs.
  • Exempts this account from the indirect cost recovery charge, which unfairly shifts the burden of paying for state administrative overhead to other departments and taxpayers.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 12 additions

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: 44-18-18.2. 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.

(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 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%) 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.