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Rhode Island Sales Tax Changes, July 2015


 Numerous sales tax changes are now in effect in Rhode Island.

Numerous sales tax changes took effect in Rhode Island on July 1, 2015.

New exemptions

All sales of heating fuel are now exempt from sales and use tax, including heating fuel used for and by businesses. Prior to July 1, the exemption was only for residential heating and heating used in the manufacturing process.

All sales of electricity and gas are now exempt from sales and use tax. As with heating fuel, the exemption previously applied only to residential and manufacturing uses. Learn more.

The temporary sales tax exemption provided for wines and spirits sold at package stores and liquor stores has been made permanent. In addition, the excise tax rates on numerous alcoholic beverages (including malt beverages, certain still wines, and spirits with alcohol measuring more than 30 proof) are extended.

Short-term lodging

Sales tax permits are now required for anyone renting out “an entire house, an entire beach cottage, an entire condominium, an entire apartment, or other such accommodation, for a period of 30 days or less.” The 7% Rhode Island sales tax and the 1% local hotel tax applies to short term rentals unless a written contract for the rental was signed prior to July 1, 2015.

The tax rate is higher for short-term room rentals:

  • 7% sales tax
  • 5% statewide hotel tax
  • 1% local hotel tax

No sales or hotel tax applies to room rentals when the provider and the tenant signed a written contract for the rental prior to July 1, 2015.

In addition to property owners, room resellers are also required to register for a sales tax permit with the Division of Taxation and collect and remit the combined 13% sales and hotel taxes on each transaction. Room resellers may “claim a credit for the amount it was charged by the hotel in Rhode Island sales and use tax, statewide hotel tax, and local hotel tax.”

Please see the departmental notice regarding sales and hotel tax on vacation homes, rooms, and other dwellings. Property owners and businesses are also invited to participate in a series of seminars on the subject. Additional information.

To help simplify lodging tax compliance, consider an automated solution.

Other

Cigarette tax increases by 25 cents per pack, effective August 1, 2015.

The gas tax increased from 32 cents to 33 cents a gallon, effective July 1, 2015.

Sales tax rules, rates and regulations are fluid and change frequently. To make sure sure you are up to date, consider automating your sales tax processes. Learn more.


Gail Cole
Avalara Author
Gail Cole
Gail Cole
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.