Rhode Island Sales Tax Guide for Businesses
- Sales Tax Rate
- Local Taxes
- Department of Revenue - Division of Taxation
- Tax Line
We wrote this guide for online sellers who want to know if they even have to bother with sales tax in Rhode Island, and if so, how best to tackle the sales tax situation in the Ocean State.
After reading this, you’ll know:
- Do you or don’t you need to collect Rhode Island sales tax?
- Which customers do you collect from?
- How much do you collect?
- What do you do with all the sales tax you’ve collected?
- Way more than you probably ever wanted to know about Rhode Island sales tax!
Do you have sales tax nexus in Rhode Island?
Good news! You only have to begin thinking about Rhode Island sales tax if you have sales tax nexus in Rhode Island.
“Sales tax nexus” is just a fancy way of saying “significant presence” in a state.
Rhode Island considers a seller to have sales tax nexus in the state if you have any of the following in the state:
- An office or place of business
- An employee, representative, contractor, agent, salesperson, etc. present in the state
- Goods in a warehouse, sample room, storage room, etc. present in the state
- Delivery of merchandise to customers in the state in the merchant’s own vehicle(s)
- Attendance at a tradeshow or craft show
- Advertising in the state (see more here, p. 2-3)
- A 3rd party affiliate in the state (due to “ click-through nexus”)
You can click here to read exactly what the Rhode Island Department of Revenue (Rhode Island’s taxing authority) has to say about what constitutes sales tax nexus in Rhode Island (starting on p. 2).
Is what you’re selling even taxable?
You’ve probably read this far because you realized you have sales tax nexus in Rhode Island. Your next step is to determine if what you’re selling is even taxable.
Services in Rhode Island are generally not taxable, though some are. So if you’re a freelance writer or a plumber, you’re in luck and you don’t have to worry about sales tax. Also, the furnishing of telecommunications service and cable television services is taxable in Rhode Island. And be mindful if the service you provide includes creating or manufacturing a product. In that case you may have to deal with the sales tax on products.
Tangible products are taxable in Rhode Island , with a few exceptions. These exceptions include certain clothing and prescription drugs, among other items.
So if you sell hair care items, then charge sales tax to your Rhode Island customers.
But if you’re an oboe teacher, don’t charge sales tax to your Rhode Island customers.
If you have sales tax nexus in Rhode Island and your products are taxable, your next step is to register for a sales tax permit.
How to Register for a Sales Tax Permit in Rhode Island
Sellers with sales tax nexus in Rhode Island must apply for a Rhode Island sales tax permit.
Don’t skip this step! Many states consider it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in Rhode Island.
How to Collect Sales Tax in Rhode Island
So you’ve determined that you have sales tax nexus in Rhode Island and what you’re selling is taxable. And you’re all set and registered for your Rhode Island sales tax permit.
The next step is to determine how much sales tax to collect.
Rhode Island is a destination-based sales tax state. So no matter if you live and run your business in Rhode Island or live outside Rhode Island but have nexus there, you would charge sales tax at the rate of your buyer’s ship-to location.
Fortunately, Rhode Island is one of the few states with no local sales tax rates. That means that you charge 7% sales tax to every buyer in Rhode Island. This goes for sellers who call Rhode Island their home state and sellers who live and operate their businesses in another state, but have Rhode Island sales tax nexus for some reason.
Note: If you operate an eating and/or drinking establishment in Rhode Island, you must collect the 1% Rhode Island meals and beverage tax.
Should you collect sales tax on shipping charges in Rhode Island?
As an online seller, you will most likely need to charge sales tax on shipping charges in Rhode Island.
Read a full explanation of sales tax on shipping in Rhode Island here.
When are Rhode Island Sales Tax Returns Due?
Rhode Island sales tax returns are always due the 20th of the month following the reporting period. You’ll be assigned a sales tax filing frequency when you apply for your Rhode Island sales tax permit.
Most merchants in Rhode Island are required to file a monthly sales tax return, though if your sales tax liability is less than $200 for six consecutive months, you may request to file Rhode Island sales tax quarterly.
To break it down:
2016 Rhode Island Monthly Sales Tax Filing Due Dates
|Taxable Period||Due Date|
|January||February 22, 2016*|
|February||March 21, 2016*|
|March||April 20, 2016|
|April||May 20, 2016|
|May||June 20, 2016|
|June||July 20, 2016|
|July||August 22, 2016*|
|August||September 20, 2016|
|September||October 20, 2016|
|October||November 21, 2016*|
|November||December 20, 2016|
|December||January 20, 2017|
2016 Rhode Island Quarterly Sales Tax Filing Due Dates
|Taxable Period||Due Date|
|Q1 (Jan - Mar)||April 20, 2016|
|Q2 (Apr - Jun)||July 20, 2016|
|Q3 (Jul - Sep)||October 20, 2016|
|Q4 (Oct - Dec)||January 20, 2017|
*indicates a due date pushed back due to a weekend or holiday
How to File Sales Tax in Rhode Island
When it comes time to file sales tax in Rhode Island you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
We’ll walk you through these steps.
How to Calculate How Much Sales Tax You Owe in Rhode Island
Calculating how much sales tax you should remit to the state of Rhode Island is easy with TaxJar’s Rhode Island sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Rhode Island sales tax return will be waiting for you in TaxJar. Start by logging in to TaxJar!
How to File and Pay Sales Tax in Rhode Island
You have three options for filing and paying your Rhode Island sales tax:
- File online - File online at the Rhode Island Division of Taxation.. You can remit your payment through their online system.
- File by mail - You can use the Rhode Island Streamlined Sales Tax Return and file and pay through the mail, though you must file and pay online if your tax liability in the previous year was $200 or more.
- AutoFile - Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.
Other Facts You Should Know about Rhode Island Sales Tax Filing
There are a few more things you should know about sales tax in Rhode Island:
- Late Filing Penalty - 10% of tax due
- Late Payment Penalty - 10% of tax due
Other penalties for fraud or serial offenses include higher penalties and even criminal charges.
Rhode Island requires that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay. Click here for a list of states that require zero sales tax returns.
And that’s it. You’ve mastered Rhode Island sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.
Rhode Island Sales Tax Resources
For more about Rhode Island sales tax, check out the Rhode Island section of the TaxJar blog.