Taxi! Rhode Island Sales Tax on Cab Rides
- Apr 22, 2015 | Gail Cole
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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