Section 280-RICR-20-70-21.7 - Taxation of Rentals and Leases of Tangible Personal Property (Excluding Motor Vehicles)A. The receipts or proceeds derived from the rental or lease of tangible personal property are subject to sales and use tax.B. The tax shall be computed on the gross amount of the lease or rental without any allowance for service, maintenance, insurance, property taxes, etc., whether paid by the lessor or lessee.C. Each period for which a rental or lease charge is made shall be considered a complete sale for the purpose of the imposition, collection and payment of sales or use tax. Sales tax shall be computed based on the section relating to "General Sourcing Rules".D. Service providers such as linen and towel suppliers are the taxable consumers of linens, towels, etc., provided to their customers, including out of state customers or exempt organizations, since the essential character of this type of business operation is the furnishing of the recurring service of laundering or cleaning such articles. No tax is due on the payments received from the customer for this service, however the sales or use tax is payable at the time of purchase of the property used in rendering the service. E. The transactions described in §§ 27.5(C)(1) through (2) of this Part are considered financing arrangements and therefore the periodic payments shall be excluded from sales and use tax regardless of whether a transaction is characterized as a lease or rental under generally accepted accounting principles, the Internal Revenue Code, the Uniform Commercial Code, or other provisions of federal, state or local law. The tangible personal property in such transactions is subject to sales and use tax at the time of purchase.280 R.I. Code R. § 280-RICR-20-70-21.7