Rhode Island has a 7% statewide sales and use tax that applies to retail sales of most goods and some services. The sales tax is imposed on the total retail sales price, including any charges for services prior to the sale (e.g. delivery fees).
Some cities and towns in Rhode Island have local option sales taxes in addition to the state tax. Currently, the highest combined state and local sales tax rate in Rhode Island is 8.5%.
Rhode Island sales tax also applies to purchases made over the internet if the seller has nexus in the state. Rhode Island follows destination sourcing rules, meaning the sales tax rate is determined by the location where the product or service is delivered or consumed.
In this comprehensive guide we’ll cover everything you need to know about Rhode Island sales tax, including:
- Rhode Island sales tax calculator
- Taxable and exempt goods and services
- Managing sales tax permits and filing returns
- Responsibilities for online sellers and marketplace facilitators
- Sourcing laws and nexus rules
- Local sales taxes by city/county
- And more!
Whether you are an individual or business owner in Rhode Island, have an online business that delivers to the state, or are just learning about Rhode Island’s sales tax system, this guide has all the essential information to help you understand your obligations.
Rhode Island Sales Tax Calculator
Our Rhode Island sales tax calculator makes it easy to find the sales tax rate and calculate the amount of tax due on a purchase in Rhode Island.
To use the calculator, simply:
- Enter the total purchase price of the item (excluding shipping/handling fees)
- Select the city or town where the purchase will be made from the dropdown menu
- The calculator will show the total sales tax due, including state and local taxes
For example, if you purchase a $100 appliance in Providence, the total sales tax due is $7.00. This includes the 7% state sales tax plus an additional 1% Providence local sales tax, for a total rate of 8%.
You can also enter an address instead of selecting a city/town and the calculator will determine the applicable sales tax rate based on the location.
Check out our Rhode Island sales tax calculator here:
Rhode Island Sales Tax Calculator
Rhode Island Sales Tax Calculator
Our calculator ensures you have the right sales tax rate every time, taking the guess work out of calculating sales tax for purchases made across Rhode Island.
Taxable Goods and Services
Rhode Island sales tax applies to the retail sale, lease, or rental of most goods and some services unless they are specifically exempt. Some examples of taxable items include:
- Clothing and footwear
- Furniture and home furnishings
- Electronics and appliances
- Toys and games
- Prepared food and drinks
- Alcoholic beverages
- Cleaning services
- Automobile purchases and leases
- Hotel occupancy and accommodations
- Digital products like ebooks and software downloads
Some services are exempt from sales tax in Rhode Island, such as:
- Medical and dental services
- Most personal and professional services (legal, accounting, etc.)
- Most educational services provided by schools
Clothing and Footwear
Clothing and footwear purchases are taxable in Rhode Island. The sales tax applies to the total purchase price of any item worn on the body, including:
- All clothing for babies, children, and adults
- Shoes, boots, slippers, sandals
- Accessories like handbags, belts, gloves, hats, scarves, ties, etc.
There are no clothing or footwear exemptions in Rhode Island. All items are taxed at the full state and local rates.
Prepared Food and Beverages
Prepared food and drinks sold in restaurants, delis, coffee shops, food trucks, concession stands, and other foodservice establishments are subject to full state and local sales tax in Rhode Island. This includes items like:
- Restaurant meals
- Take-out food and drinks
- Pizza delivery
- Hot coffee and tea
- Food from the grocery store deli counter
- Meals and snacks at hotels/theaters/ballparks
- Vending machine sales
- Concession stands at fairs, festivals, and amusement parks
Alcoholic beverages are also taxable, including beer, wine, liquor, and mixed drinks sold at bars, restaurants, breweries, wineries, distilleries, liquor stores, etc.
Grocery food that is not prepared or hot (like milk, bread, produce, chips, etc.) is generally exempt from sales tax in Rhode Island. However, many grocery stores sell a mix of taxable prepared foods and non-taxable items.
Rhode Island Sales Tax Exemptions
Some goods and services are exempt from paying sales tax in Rhode Island. Common exemptions include:
Prescription Drugs and Medical Products
Prescription drugs and over-the-counter (OTC) medications for human use are exempt from sales tax in Rhode Island. The exemption also applies to products like insulin, syringes, eyeglasses, contact lenses, prosthetics, mobility enhancing equipment like wheelchairs and walkers, and other medical items.
Non-Profit Organizations
Qualified non-profit organizations are exempt from paying sales tax in Rhode Island on their purchases. The organization must be granted a non-profit exemption certificate by the Rhode Island Division of Taxation. Hospitals, schools, charities, churches, social welfare organizations, and other non-profits may qualify.
Groceries
Most grocery food that is not prepared or heated is exempt from Rhode Island sales tax. This includes items like:
- Fresh fruits and vegetables
- Meat, poultry, fish
- Bread and baked goods
- Cereal, pasta, rice
- Milk, cheese, eggs
- Chips, candy, cookies
- Water and non-alcoholic drinks
Newspapers and Magazines
Sales of newspapers, magazines, and other periodicals are exempt from Rhode Island sales tax. However, subscriptions or downloaded editions may be taxable.
Gasoline
Motor vehicle gasoline and diesel fuel are exempt from Rhode Island sales tax. Aviation gasoline is taxable.
Clothing and Footwear (Children’s)
While adult clothing is taxable, there is a limited exemption for children’s clothing in Rhode Island. Clothing and footwear designed for young children size 0-4X is exempt. Normal sized children’s clothing is taxable.
See the Rhode Island Division of Taxation website for full details on exempt goods and services.
Managing Sales Tax Permits, Filing and Remittance
If you are making taxable retail sales in Rhode Island, you need to register for a sales tax permit, file regular returns, and remit sales tax to the state.
Obtaining a Rhode Island Sales Tax Permit
All retailers engaged in selling taxable goods or services in Rhode Island must register for a sales tax permit with the Rhode Island Division of Taxation. This applies both to in-state sellers as well as out-of-state online sellers with nexus in Rhode Island.
You can easily register online for your Rhode Island sales tax permit. The permit allows you to make tax-exempt wholesale purchases for resale and collect and remit sales tax on retail transactions. The sales tax permit is free – there are no registration costs.
Filing Rhode Island Sales Tax Returns
Rhode Island requires you to file regular sales and use tax returns to report your total gross sales. You can file returns annually, quarterly, monthly, or semi-weekly depending on your sales volume.
Returns are used to report the amount of retail sales subject to Rhode Island sales tax and calculate the sales tax due. You will report gross sales, any exempt sales, calculate the net taxable amount, apply the sales tax rate, and determine the tax due.
Electronic filing is mandatory for most sellers in Rhode Island. You can file your sales tax returns online through the Rhode Island Division of Taxation taxpayer portal. Filing electronically also lets you make your sales tax payments electronically.
Remitting Rhode Island Sales Tax
Along with filing your returns, you must remit the sales tax due to Rhode Island. The tax return shows the amount of sales tax calculated, and this amount must be paid on time when you submit the return. There are a few options for making sales tax payments:
- Pay online when e-filing your return
- Pay by electronic funds withdrawal when e-filing
- Pay by credit card or debit card
- Mail a check or money order with a paper return
The payment deadlines match the filing due dates (monthly, quarterly, etc). Failing to pay on time will result in penalties and interest.
Rhode Island Sales Tax for Online Sellers and Marketplaces
Online sellers and marketplace facilitators like Amazon or Etsy have special sales tax requirements in Rhode Island:
Economic Nexus Sales Tax Rules
Out-of-state sellers shipping taxable goods into Rhode Island may have economic nexus based on their sales volume. Economic nexus means having a significant economic presence in the state despite no physical presence.
Effective June 1, 2021, the economic nexus threshold in Rhode Island is either:
- More than $100,000 in gross sales into Rhode Island, or
- 200 or more separate transactions delivered into Rhode Island
Sellers exceeding this threshold must register for a Rhode Island sales tax permit and begin collecting state (and local) sales tax on applicable sales.
Marketplace Facilitator Tax Collection
Online marketplaces that facilitate sales for third-party sellers may be required to collect and remit Rhode Island sales tax on behalf of those sellers. This marketplace facilitator tax applies to platforms like:
- Amazon
- eBay
- Etsy
- Walmart
- Target
- Other sites that list/sell items for independent sellers
Marketplaces are generally responsible for the sales and use tax obligations of their third-party sellers for sales made via their website or platform. They must handle registration, tax calculation, collection, filing, and remittance.
Mail Order & Internet Sales
Remote sellers delivering taxable goods into Rhode Island must collect sales tax if they have economic or physical nexus with the state. Rhode Island follows destination sourcing – the delivery location of the customer determines which rate to collect.
Sellers must charge state sales tax plus any local district taxes based on the ship-to or bill-to address. Zip code lists should be used to assign the appropriate local rate by jurisdiction. Sellers can simplify collection by charging the 8.5% combined rate on all Rhode Island sales.
Rhode Island Sales Tax Sourcing Laws
Rhode Island follows destination sourcing for determining which tax rate(s) to charge on taxable sales:
- In-state sales – sellers collect sales tax based on the store location for over-the-counter sales. Delivered sales are sourced to the place of delivery.
- Out-of-state/online sales – sellers collect Rhode Island state sales tax plus local rates based on the tax jurisdiction of the delivery address or ship-to location.
Certain sales like vehicles, aircraft, and boats may have different sourcing rules. Sellers should always verify requirements based on their specific transactions.
Rhode Island Sales Tax Nexus
Nexus refers to a seller having sufficient connection or physical presence in a state to be required to register for sales tax. There are several types of nexus rules in Rhode Island:
- Physical nexus – seller has a physical business location, store, warehouse, employees, inventory, or other property in Rhode Island. ALL sellers with physical nexus must register for a Rhode Island Sales Tax Permit.
- Economic nexus – seller exceeds the sales volume threshold of $100,000 or 200 transactions in Rhode Island during the last 12 months. Economic nexus sellers must register and collect sales tax.
- Affiliate nexus – seller has ties to Rhode Island through local affiliates, agents, or resellers promoting their products/brand. Affiliate nexus can trigger sales tax obligations.
Out-of-state sellers should analyze if they have nexus that requires them to register with Rhode Island tax authorities and adhere to all compliance rules for filing, collecting, and remitting state (and local) sales tax.
Rhode Island Local Sales Taxes
In addition to the 7% Rhode Island state sales tax, some cities and towns impose local sales and use taxes that sellers must collect on taxable sales sourced within their borders.
Local sales tax rates range from 0.25% to 1.5% depending on the municipality. Some major RI cities and their local tax rates include:
| City | Combined Tax Rate |
|---|---|
| Providence | 8% |
| Pawtucket | 8.5% |
| Warwick | 8% |
| Cranston | 7% |
| Newport | 7% |
Sellers can use our Rhode Island sales tax lookup tool to find the combined state and local rate to collect based on any address.
Some local jurisdictions in Rhode Island also apply additional taxes on restaurant meals, hotels, and other transactions. Check the Rhode Island Division of Taxation for more details on local rates.
How to Register for a Rhode Island Sales Tax Permit
Registering for a Rhode Island sales tax permit is easy – you can complete the entire application online at the Division of Taxation website:
- Obtain a RI business tax ID number. If you don’t already have one, you’ll first need to acquire a Rhode Island Taxpayer Identification Number (TID). You can get this ID number as part of registering for your sales permit.
- Complete online sales tax registration. File Form BAR-1 online to register for your Rhode Island sales tax permit. You’ll need some basic business information and your new RI ID number.
- Receive sales tax permit. Your Rhode Island sales tax permit should be issued right away after registering online. You can download, save, and print your sales tax certificate.
- Collect and remit sales tax. Once registered, you can begin charging, collecting, reporting, and paying Rhode Island state sales tax plus any local rates on taxable sales.
- Renew annually. Rhode Island sales tax permits must be renewed each year. You will receive a notice when your renewal is due.
Sales Tax Exemption Certificates
The Rhode Island Division of Taxation issues several types of sales tax exemption certificates to allow tax-exempt organizations and resellers to make wholesale purchases without paying sales tax:
- Sales tax resale certificates – provide to suppliers to purchase inventory or raw materials for resale tax-free.
- Exempt purchase certificates – used by farmers, commercial fishermen, non-profit organizations, churches, and other exempt groups to make tax-exempt purchases.
- Multiple points of use certificates – for businesses purchasing items for both resale and taxable business use in Rhode Island and other states.
- Direct pay permits – issued to allow qualified taxpayers to self-report and pay use tax directly to the state rather than to vendors.
As a seller, you should retain any exemption certificates received from customers to substantiate why sales tax was not collected. Only accept valid, current certificates in the seller’s name.
Rhode Island Sales Tax Questions & Answers
Here are answers to some frequently asked questions about Rhode Island sales tax:
1. What is the sales tax rate in Rhode Island?
The Rhode Island sales tax rate is 7% statewide. Some cities and towns have additional local sales taxes ranging from 0.25% to 1.5%. Combined state and local rates can be up to 8.5%.
2. What items are exempt from sales tax in Rhode Island?
Common tax-exempt items in Rhode Island include prescription medications, many groceries, newspapers/magazines, clothing for young children, gasoline, and goods purchased for resale. Services are generally not taxable unless specifically enumerated.
3. I sell taxable products online to Rhode Island customers. When do I need to register and collect sales tax?
Out-of-state sellers must collect Rhode Island sales tax once they exceed $100,000 in gross RI sales or have 200 or more separate transactions delivered into the state within the last 12 months. This is based on economic nexus. You can register online.
4. Are sales of clothes and shoes taxable in Rhode Island?
Yes, all sales of clothing and footwear are taxable in Rhode Island, for both children and adults. The state does not have a clothing sales tax holiday. Accessories are also taxable.
5. Is sales tax charged on restaurant meals in Rhode Island?
Yes, prepared meals, drinks, and food from restaurants, delis, coffee shops, food trucks, caterers and other food service establishments are subject to the full Rhode Island sales tax rate, including any local taxes. The tax is based on the total bill.
6. Do I need to collect local sales taxes on sales shipped to Rhode Island cities?
If you are an online or remote seller, you must collect both the 7% state sales tax plus any applicable local sales taxes based on the ship-to or delivery address of orders in Rhode Island. Use zip code tables to assign the correct local rate.
7. Where can I get more information on Rhode Island sales tax laws and regulations?
The Rhode Island Division of Taxation website at tax.ri.gov provides full details and resources on sales and use tax requirements, including registration, tax rates, filing sales tax returns, paying sales tax, and exemptions.
Conclusion
Understanding Rhode Island’s sales tax system is key for anyone selling taxable goods or services in the state. While the sales tax rate may seem straightforward at first glance, properly adhering to Rhode Island’s requirements also means diving into economic nexus rules, managing sales tax permits, sourcing sales correctly, integrating with sales tax software, and addressing many other considerations.
By reading this guide, you now know the critical aspects of Rhode Island sales tax
