If you run a business in Rhode Island, understanding your sales tax obligations is key to staying compliant and avoiding penalties. From retail shops to restaurants, every business that makes taxable sales needs to know what’s taxable, how to collect it, and when to remit it. While Rhode Island doesn’t have local sales taxes like some states, there are specific rules for items like prepared foods and certain beverages, making it important for business owners to stay informed.
Does Rhode Island have sales tax?
Yes, Rhode Island imposes a statewide sales tax that applies to most retail sales, leases, and rentals of tangible personal property, as well as certain services. While the rate is consistent across the state, the amount of tax you collect can vary depending on the type of sale or item being sold. For more information on sales and use tax, visit the State of Rhode Island Division of Taxation.
What is the sales tax in Rhode Island?
The Rhode Island sales tax rate is 7% statewide, and unlike many other states, there are no additional local or municipal sales taxes. Therefore, if you operate in Providence, RI, you’ll only charge the 7% state sales tax on the total sale. This makes Rhode Island’s system simpler to manage for most retailers and service providers.
However, businesses in the hospitality industry, such as hotels, motels, and lodging houses, should note that there’s an additional 6% hotel tax applied on top of the 7% state sales tax. This means lodging operators must carefully calculate and remit both taxes when reporting their sales.
How to calculate Rhode Island sales tax?
Calculating Rhode Island sales tax is simple since there’s only one statewide rate. To find out how much tax to collect, multiply the total sale amount by 7%. For example, if a customer purchases $100 in goods, you’ll charge $7.00 in sales tax for a total of $107.00.
Use our sales tax calculator
If you already have a total amount that includes sales tax and want to figure out how much of that is tax, use our reverse calculadora de impuestos sobre las ventas. It quickly breaks down the pre-tax amount and the tax portion, helping you double-check transactions or reconcile your sales records.
What gets sales taxed in Rhode Island?
In Rhode Island, most retail sales of tangible personal property and certain services are subject to sales tax. This includes everyday purchases like prepared foods, electronics, furniture, and household goods. The state also taxes some services such as telecommunications, cable TV, fabrication, and printing services. Additionally, Rhode Island imposes a use tax on taxable items purchased out of state but brought into Rhode Island for use, storage, or consumption when sales tax wasn’t collected at the time of purchase.
Does Rhode Island have sales tax on food?
In Rhode Island, groceries for home consumption are not subject to sales tax, but there are some notable exceptions. Soda and candy are taxable, so retailers need to be sure to collect tax on these items. Prepared foods, whether consumed on-site or taken to go, are also subject to an additional 1% Local Meals & Beverage Tax. This tax is administered and collected by the Rhode Island Division of Taxation and applies to all meals and beverages sold in the state, regardless of where they are consumed.
For Rhode Island restaurant owners, keeping up with sales tax can be tricky. Between the standard state sales tax, the Local Meals & Beverage Tax, and the different rules for takeout versus dine-in, it’s easy to make mistakes or spend hours on manual calculations. That’s where DAVO by Avalara comes in. DAVO helps businesses by automatically setting aside, filing, and paying their sales tax—ensuring compliance with the state’s 7% sales tax rules and deadlines without manual effort. It integrates with point-of-sale systems so businesses stay accurate and on time with minimal bookkeeping.
This means restaurant owners can spend less time worrying about compliance and more time focusing on serving their customers and growing their business. With accurate, automated tax management, you reduce errors, avoid penalties, and streamline your operations, right at the point of sale.
What is exempt from sales tax in Rhode Island?
In Rhode Island, certain sales are exempt from the state’s sales tax. This includes groceries purchased for home consumption, prescription medications, newspapers and periodicals, and utilities like gas, electricity, and heating fuel for residential use. Sales made for resale are also exempt, provided the buyer presents a valid resale certificate. Additionally, qualifying nonprofit organizations are exempt from collecting sales tax. These exemptions help keep essential goods and services more affordable while providing clear guidance for businesses on what does not need to be taxed.
Rhode Island sales tax on clothing
In Rhode Island, most essential clothing items, including footwear, priced at $250 or less per item, are exempt from sales tax. This means everyday apparel like shirts, jeans, or sneakers generally qualify for the exemption as long as each piece is below the threshold. For example, if you buy five shirts at $60 each, the entire purchase is tax-exempt since each shirt costs less than $250.
However, not all clothing items qualify. Accessories such as jewelry, handbags, and belt buckles, as well as protective and recreational gear like helmets, cleats, or wetsuits, are taxable under Rhode Island law.
DAVO can help clothing retailers in Rhode Island stay compliant by automatically tracking taxable and tax-exempt sales, ensuring that everyday clothing items under $250 are reported correctly while taxable accessories and gear are accurately accounted for. This helps you avoid errors and focus on running your business, not your sales tax.
Rhode Island sales tax holiday
Rhode Island does not have a consistent, annual sales tax holiday, so business owners can’t count on it every year. For example, the state offered a sales tax holiday in 2024, but there was no holiday in 2025. If you’re planning promotions or pricing around holidays, it’s important to check with the Rhode Island Division of Taxation each year to see if a sales tax holiday has been announced.
How to manage tax-exempt sales in Rhode Island?
To manage tax-exempt sales in Rhode Island, the customer must provide a completed Rhode Island sales and use tax resale certificate or one of the state-issued exemption certificates dated on or after July 1, 2021. Common examples include: charitable or religious organizations, which must present a Rhode Island Exempt Organization Exemption Certificate (certificates from other states are not valid); manufacturers, who must provide a Manufacturers Exemption Certificate; and farmers, who must show a Farmer Tax Exemption Certificate. Sales to the State of Rhode Island, municipalities, or the federal government are exempt and do not require a certificate. Keep these certificates on file to ensure compliance and to document why tax was not charged.
How to register for a Rhode Island sales tax license?
If you’re making retail sales in Rhode Island, whether you’re a store, restaurant, or online seller, you’ll need to apply for a Rhode Island sales tax permit before doing business in the state. The easiest way to register is through the Rhode Island Taxpayer Portal, where you can also file, pay, and schedule future payments. The portal keeps all your tax accounts in one place, making it simple to stay on top of compliance.
If you prefer, you can also register by completing the Business Application and Registration (BAR) form and emailing it to tax.excise@tax.ri.gov o tax.registration@tax.ri.gov. Keep in mind that sales tax permits expire every June 30, and renewal applications are due by February 1 each year.
Make your sales tax less taxing with DAVO.
How to file sales tax in Rhode Island?
Filing your Rhode Island sales tax return is a straightforward process through the Rhode Island Taxpayer Portal. Most businesses file and pay electronically, which allows you to manage multiple tax accounts, schedule payments, and view your filing history all in one place.
If you prefer to file by mail, paper filing is still available, but the Division of Taxation encourages electronic filing as the faster and more reliable option. Even if you had no sales during a filing period, you must still submit a “zero” return to remain compliant.
Once your return is submitted, you’ll receive a confirmation of your filing and payment directly through the portal.
You’re also required to keep accurate sales tax records for at least three years. This includes sales receipts, purchase invoices, exemption certificates, cash register tapes, and both state and federal tax returns. Any documents that reflect price changes should also be kept on file. In some cases, the Division of Taxation may request records that go back more than three years.
How to pay Rhode Island sales tax?
You can pay your Rhode Island sales tax several ways, depending on what’s most convenient for your business. The Rhode Island Taxpayer Portal is the easiest and most efficient option. It allows you to file and pay in one place, schedule payments in advance, and view your account history. You can make payments with:
- ACH credit
- Credit card (American Express, Discover, MasterCard, Visa)
- Personal or certified check
If you choose to pay by credit card, keep in mind that a small processing fee applies. The fee equals 2% of the tax amount paid plus a $2.00 transaction fee. You’ll see the total fee before confirming your payment, and it’s worth noting that the Rhode Island Division of Taxation does not receive any portion of this fee. If you’re paying by check, be sure to include your account number and filing period to ensure it is applied correctly.
Rhode Island sales tax due dates
Most Rhode Island businesses are required to file sales and use tax returns monthly. However, some smaller retailers may qualify to file quarterly or annually, depending on their average tax liability.
Generally, retailers must file their sales tax return on or before the 20th day of each month for the previous calendar month and pay any tax due. All retailers are required to report sales on an accrual basis, meaning you must report sales in the month the transaction occurs, regardless of when payment is actually received. If you have made no sales during a reporting period, you’re still required to file a return. In that case, simply report “zero sales” and “zero taxes.”
Retailers with a small tax liability may apply for permission to file and remit sales tax quarterly. To qualify, your average sales and use tax liability for six consecutive months must be less than $200 per month. If approved, quarterly returns are due on the last days of July, October, January, and April, covering the activity for the prior three months. Visit Rhode Island’s Division of Taxation’s website for downloadable calendars on sales tax due dates.
Rhode Island does not offer a sales tax discount for filing and paying on time. However, if your business operates in other states, you may still qualify for a vendor or timely filing discount elsewhere. You can check our sales tax discount guide to see which states offer this benefit. With DAVO, any eligible collection allowance in other states is automatically claimed and returned to your business in full, sometimes even covering the entire cost of your DAVO subscription.
Rhode Island sales tax penalties
If you file or pay your Rhode Island sales tax late, a penalty of 10% of the tax due will apply. In addition, interest is charged on the unpaid balance at the current rate, but it will never be less than 12% per year.
How DAVO can help manage Rhode Island sales tax
Running a restaurant, retail shop, or small business in Rhode Island is already a full-time job. The last thing you want to worry about is whether your sales tax is filed correctly and on time. DAVO handles that for you, automatically setting aside your daily sales tax, filing your returns, and making payments so you stay compliant with the Rhode Island Division of Taxation, garantizado,.
Whether you’re in Providence, Warwick, or a smaller town, DAVO makes it simple to manage sales tax for your local business. That means no more juggling spreadsheets, worrying about deadlines, or risking penalties. Just more time to focus on your customers, your menu, or your storefront.
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Rhode Island Department of Taxation Information:
(401) 574-8829