Here’s a fun fact. Cab fare in Rhode Island is subject to Rhode Island sales tax. However, if the taxi leaves the state at any point during the journey, the fare is exempt.
This is because it would be a “violation of interstate commerce provisions of the U.S. Constitution” to charge sales tax on an interstate trip.
In other words, Rhode Island sales tax cannot be charged on a trip that begins and ends in Rhode Island if the cab takes a detour through a neighboring state along the way. Read more about it in the April 2015 Division of Taxation newsletter.
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Avalara Author
Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.