Rhode Island Sales Tax Exemptions / Tax Free Items Rhode Island: Sales Tax Handbook

Rhode Island:

What purchases are exempt from the Rhode Island sales tax?

While the Rhode Island sales tax of 7.00% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in Rhode Island.

Sales Tax Exemptions in Rhode Island

In Rhode Island, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers.

Several examples of items that exempt sales tax are printed packages, booklets, letterheads, billheads, manufacturing operations such as mining, and fuel oil and kerosene.

Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for Rhode Island:


Clothing

  EXEMPT

Groceries

  EXEMPT

Prepared Food

  8%

Prescription Drugs

  EXEMPT

OTC Drugs

  7.%

These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.

Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":


Is candy taxable in Rhode Island? Candy is NOT considered a grocery in Rhode Island
Is soda taxable in Rhode Island? Soda is NOT considered a grocery in Rhode Island

Are services, shipping, installation, etc taxable in Rhode Island?

The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the Rhode Island sales tax see the Rhode Island sales taxability FAQ page.


Other tax-exempt items in Rhode Island

This table lists a number of additional categories of goods and services that are exempt from Rhode Island's sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in Rhode Island.

Category Exemption Status
Amazon Purchases
Products on Amazon.com EXEMPT
Clothing
General Clothing EXEMPT *
Food and Meals
Grocery Food EXEMPT
Manufacturing and Machinery
Machinery EXEMPT
Raw Materials EXEMPT
Utilities & Fuel EXEMPT
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Newspapers and Magazines
Newspapers EXEMPT
Occasional Sales
General Occasional Sales EXEMPT *
Optional Maintenance Contracts
General Optional Maintenance Contracts EXEMPT *
Services
Janitorial Services EXEMPT
Software and Digital Products
Custom Software - Delivered on Tangible Media EXEMPT
Custom Software - Downloaded EXEMPT
Digital Products EXEMPT

* See notes in category taxability page for details



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Source: http://www.salestaxhandbook.com/rhode-island/sales-tax-exemptions