The 2016 Rhode Island State Sales Tax
What is the 2016 Rhode Island Sales Tax Rate?
The Rhode Island state sales tax rate is 7%, and the average RI sales tax after local surtaxes is 7%.
- Groceries, clothing and prescription drugs are exempt from the Rhode Island sales tax
- Counties and cities are not allowed to collect local sales taxes
- Rhode Island has no special sales tax jurisdictions with local sales taxes in addition to the state sales tax
- Rhode Island has a lower state sales tax than 59.6% of states
Rhode Island does not allow cities or counties to enact their own sales taxes, and the state sales tax applies to all sales within state jurisdiction with several exemptions. These exemptions include most food, prescription drugs, newspapers and periodicals, and clothing/shoes among other items.
The sales tax was raised 1% in the 1970s and again the early 1990s from 5% to the current rate of 7%. Both raises were supposed to be temporary debt-cancelling measures, but in both cases the raise was later made permanent by the state legislature.
If you are a Rhode Island business owner, you can learn more about how to collect and file your Rhode Island sales tax return at the 2016 Rhode Island Sales Tax Handbook .
Rhode Island Sales Tax Exemptions
Rhode Island doesn't collect sales tax on purchases of most clothing, prescription drugs and groceries. Prepared Food is subject to special sales tax rates under Rhode Island law. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.
Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Rhode Island does not treat candy or soda as groceries, which means they are not subject to reduced grocery sales tax rates. Other items including gasoline, alcohol, and cigarettes are subject to various Rhode Island excise taxes in addition to the sales tax.
In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. Prepared Food is subject to a higher state sales tax then other items. The RI sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Rhode Island's sales tax rates for commonly exempted items are as follows:
$100 Restaurant Dinner
$100 of groceries
$100 in clothes
$100 of consumer products
$8.00 sales tax
$0.00 sales tax
$0.00 sales tax
$7.00 sales tax
Rhode Island Sales Tax Exemption Certificate
Unlike a Value Added Tax (VAT), the Rhode Island sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Rhode Island Sales Tax Exemption Form to buy these goods tax-free.
Companies or individuals who wish to make a qualifying purchase tax-free must have a Rhode Island state sales tax exemption certificate, which can be obtained from the Rhode Island Division of Taxation . On making an exempt purchase, Exemption Certificate holders may submit a completed Rhode Island Sales Tax Exemption Form to the vendor instead of paying sales tax.
Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Rhode Island sales tax code) can be downloaded from the Rhode Island Division of Taxation here .
Rhode Island Sales Tax Calculator
Whenever you make a purchase at a licensed Rhode Island retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Rhode Island sales tax calculator.
Rhode Island Use Tax
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If you buy goods and are not charged the Rhode Island Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 7% sales tax (less any foreign sales tax paid) for these items yourself as the Rhode Island Use Tax.
Your are expected to voluntarily list your liable purchases on a Rhode Island Use Tax Return, which should be attached with payment to your Rhode Island Income Tax Return. Historically, compliance rates with with the Rhode Island Use Tax have been low.
Rhode Island Local Sales Taxes
Rhode Island does not allow local jurisdictions like cities or counties to collect a local sales tax. The Rhode Island state sales tax of 7% is applicable statewide. You can view the sales tax rates for various cities in Rhode Island here.
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