Rhode Island is a destination-based state (sales are taxed where the buyer is located).
- Sales tax is charged on the retail sale or lease of goods and some services
- For manufacturers, purchases used for production aren’t taxed
- For distributors, items purchased for resale aren’t taxed
Except under special circumstances, businesses are required to file online at the Business Tax Filings website.
The Rhode Island sales tax rate is 7%.
In addition to the sales tax, there is also a 6% hotel tax on the rental of accommodations.
Food classified as a meal and beverage and sold by an eating or drinking establishment is taxed at the 7% state rate plus an additional 1% local meals rate.
Food items sold for home consumption are generally exempt from all sales tax.
Business activities that establish a tax presence in the state include:
- Maintaining a business location in Rhode Island, including any type of office or warehouse
- Having employees or representatives who solicit and accept orders in Rhode Island
- Selling through advertising in newspapers and other periodicals, billboards, brochures, catalogs and similar advertising material mailed to or distributed within the state to residents of the state
Online activities that establish nexus in Rhode Island include:
- Having an affiliate or referral relationship with a contractor or representative in the state
- Sales from these referrals exceed $5,000 during each of the prior 4 quarters
Economic nexus in Rhode Island:
- According to state law, out-of-state sellers whose sales into Rhode Island exceed $100,000 or 200 separate transactions in the immediately preceding calendar year are required to register, collect, and remit sales tax to Rhode Island or comply with notice and report requirements described on pg. 69 in this document.
- Effective date: August 17, 2017
Find out more about nexus in Rhode Island in this guide for remote sellers or sales tax regulation document.
Sales tax returns are to be filed on a monthly basis on or before the 20th day of the month following the end of the reporting period.
If your tax liability for 6 consecutive months has averaged less than $200 per month, you can apply in writing to the Tax Administrator to change your filing status to quarterly.
You can register for a retail sales permit at the state’s Online Registration Service by filing a Business Application and Registration Form along with the $10 fee. A $10 renewable fee is required each year.
You can also register either by mail or in person at:
Division of Taxation
One Capitol Hill
Providence, RI 02908
There is a late filing penalty of 10% of the tax due. Interest at the current rate is also calculated on the underpayment of tax, but not less than 12%.
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