Sales, Use and International Tax Activity Update - April 2010

Rhode Island Flushes Exemption Dreams for Portable Toilet Provider

Cleaning and maintenance services provided along with rentals of portable sanitation facilities were subject to Rhode Island sales and use tax because the real object of the transaction was the rental of the portable facilities.

The taxpayer rented portable sanitation facilities to customers and provided sanitation services for the units for a separately stated charge per rented unit. The taxpayer provided sanitation services only for the portable sanitation facilities that were rented.

The services were incidental to the rental because the services had no value unless they were purchased along with the rental of the portable sanitation facilities. Further, the rental and the services could not be separately purchased. It was virtually impossible to separate the rental of the facilities from the services necessary to keep them functioning.

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