Rhode Island Sales Tax Rates

How to register for sales tax in Rhode Island

You have two options to register for a sales tax permit in Rhode Island:

1. Online: This is the faster and recommended method. Visit the Rhode Island Division of Taxation’s Business Application and Registration (BAR) system
   1. Click “Create a new user” and follow the instructions
2. Mail: Download and complete the “Business Application and Registration Form” from the RI Division of Taxation website. Mail the completed form along with a $10 fee.

Here’s what you’ll generally need to have on hand to register online:

• Personal identification info (SSN, address, etc.)
• Business identification info (EIN, address, etc.)
• Business entity type (sole-proprietor, LLC, etc.)
• Date you began doing business in Rhode Island
• Description of your business activity

How to collect sales tax in Rhode Island

Here’s how to collect sales tax in Rhode Island:

1. Collect the Tax:
   • Once you’ve identified a taxable item and determined the rate based on the customer’s location, you need to collect the sales tax at the point of sale.
   • Most point-of-sale systems can automatically calculate and collect the tax.
   • If you don’t have a system, you’ll need to manually add the tax to the customer’s total.
2. Keep Records:
   • It’s crucial to maintain accurate records of all your sales transactions. This includes the total sales amount, the sales tax collected for each transaction, and the customer’s location.
   • These records will be vital when you file your sales tax return.

How to get a sales tax permit/license in Rhode Island?

You have two options to register for a sales tax permit (also called a seller’s permit) in Rhode Island:

1. Online: This is the faster and recommended method. Here’s what you need to do:

• Visit the Rhode Island Division of Taxation’s Business Application and Registration (BAR) system and complete the online application.

2. Mail:

• Download and complete the “Business Application and Registration Form” from the RI Division of Taxation website. Mail the completed form along with a $10 fee.

When are Rhode Island’s sales tax returns due?

Rhode Island’s sales tax returns are due on the 20th day of the month following the reporting period.

If the due date falls on a weekend or holiday, the filing is then due on the next business day.

Is anyone exempt from sales tax in Rhode Island?

In Rhode Island, there are certain categories of purchases and customers that are exempt from paying sales tax. Here’s a breakdown:

Exempt Purchases:

• Groceries (exceptions): Most non-prepared food items like fruits, vegetables, and grains are exempt. However, prepared foods, restaurant meals, and alcoholic beverages are taxable.
• Prescription drugs and medical supplies: These are generally exempt, but some durable medical equipment might be taxable.
• Farm equipment: This includes machinery and tools used for agricultural production.
• Certain services: Generally, services aren’t taxable in Rhode Island. Exceptions include installation or repair services related to tangible personal property (e.g., installing flooring).

Exempt Customers:

• Government agencies: Federal, state, and local government purchases are typically exempt.
• Certain non-profit organizations: Qualified non-profits may be exempt if the purchase is used for their exempt purpose and they have a sales tax exemption certificate.
• Merchants purchasing for resale: Businesses with a valid resale certificate can purchase goods without paying sales tax, as they will collect it when they sell the item