Section 46-15.1-14 - Exemption from taxation(a) The exercise of the powers granted by this chapter shall be in all respects for the benefit of the people of the state, and for the improvement of their health and living conditions, and the purchase, lease, operation, and maintenance of projects by the board under this chapter will constitute the performance of essential governmental functions. The board shall not be required to pay any taxes or assessments upon any property acquired or used by the board hereunder or upon its income, existence, or franchise hereunder, and the bonds and notes issued by the board hereunder and the interest thereon shall be exempt from taxation in the state. Sales to the board hereunder shall not be subject to any sales or similar tax, and the use of property by the board hereunder shall not be subject to any use or similar tax. The lease of property of the board to others hereunder for water supply purposes, contracts for the use by others, and the use thereof by the lessees or others contracting with the board, shall not be subject to any sales, use, or similar tax, and the lessees or other users under the contracts shall not be required to pay any property taxes or assessments on the property except as provided below.(b) Except as to property leased to others, the board shall pay annually from its revenues hereunder, after first providing for debt service and other expenses and reserve requirements required by an applicable trust agreement or bond or note resolution to be met from current revenues, to each city, town, or district, a sum of money, in lieu of property taxes on its property hereunder, equal to any property tax levied on the property by the city, town, or district during the year next preceding the acquisition of the property by the board. As to property leased to others, the lessee shall pay such amount, except to the extent that provision is made in the lease for payment by the board, under the terms set forth in the foregoing sentence.R.I. Gen. Laws § 46-15.1-14