Rhode Island – Sales Tax Changes

SALT Report 1761 – The Rhode Island Division of Taxation issued a tax advisory regarding the sales and use tax changes that recently took effect.  The tax changes were included in the state’s budget bill that was approved and enacted in June 2012.

The following changes took effect October 1, 2012:

  • The 7% sales and use tax applies to articles of clothing, including footwear, priced at more than $250 per item. For example, if a suit costs $275, the tax rate will be applied only to $25, resulting in a tax of $1.75,
  • The 7% sales and use tax applies to taxicab services, limousine services, charter bus services, and other transit and ground transportation services. Interstate transportation and certain other transportation services remain exempt from the tax, and
  • The 7% sales and use tax applies to pet care services.  This includes boarding, grooming, sitting, and training pets.  However, veterinary and testing laboratories services remain exempt from tax

The following change took effect July 1, 2012

  • The 4% Rhode Island beverage container tax applies to all non-alcoholic drinks for human consumption, excluding milk. The tax applies to all beer, malt beverages, sports drinks, iced teas, and iced coffees. The tax is levied on every case of beverage containers sold by a beverage wholesaler. Previously, the tax only applied to carbonated soft drinks, soda water, mineral water, bottled water, and beer and other malt beverages

For Further Information:

Rhode Island Division of Taxation – Advisory 2012-22

Rhode Island Budget Bill