Rhode Island has a 7% state sales tax rate and does not levy local sales taxes. The sale of food and food ingredients purchased for human consumption is exempt from sales tax in Rhode Island. However, items not considered food or food ingredients are subject to sales and use tax. As a Rhode Island business owner, you must collect and file your Rhode Island sales tax return.
Sales Tax Collection and Administration
Rhode Island has taken steps to simplify its sales tax rules and administration process. The Rhode Island Sales Tax is administered by the Rhode Island Division of Taxation.
Tax Responsibilities for Business Owners
As a business owner selling taxable goods or services in Rhode Island, you act as an agent of the state by collecting tax from purchasers and passing it along to the tax authority. Any sales tax collected belongs to Rhode Island, not you. You must manage the taxes to remain compliant with state and local laws.
Local Taxes in Rhode Island
Rhode Island does not have local sales or use taxes, but cities, towns, and counties may have discretionary taxes like a food and beverage tax. The state levies a 1% local meals and beverage tax on prepared meals and beverages sold in eating establishments. The business collects and remits the tax to the Rhode Island Division of Taxation.