Rhode Island: Sales Tax Handbook
What purchases are taxable in Rhode Island?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Rhode Island sales tax.
Contents1.) Taxability of Goods and Services
- General Rhode Island taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in Rhode Island?
All tangible products within Rhode Island are taxable with the exception of prescription drugs and hair care products. In addition. teachers should also not charge sales tax to Rhode Island customers.
This means that an individual in the state of Rhode Island who sells books would be required to charge sales tax, but an individual who sells hair products would not.
Are services subject to sales tax in Rhode Island?
In general, services in Rhode Island are not taxable unless you are a plumber or writer. On the other hand, if you offer furnishing of telecommunication services and cable television services then you will be exempted from Tax. Also, if your services fall under manufacturing or creating a product then you have to deal with sales tax on that product.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in Rhode Island?
You will definitely have to part with shipping charges once you are in Rhode Island. In most cases, they consider shipping charges as part of the sales price of the item. That means that, if the item is taxable then shipping is taxable too.Top
Are drop shipments subject to sales tax in Rhode Island?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Rhode Island, drop shipments are generally subject to state sales taxes.
Section 2: Taxability of Various Items in Rhode Island
This table shows the taxability of various goods and services in Rhode Island. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||EXEMPT|
|General Clothing||EXEMPT *|
|Food and Meals|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE *|
|Manufacturing and Machinery|
|Utilities & Fuel||EXEMPT|
|Medical Goods and Services|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Motor Vehicles||TAXABLE *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||EXEMPT *|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||TAXABLE|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Transportation Services||TAXABLE *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
|Customization of Canned Software||TAXABLE|
|General Trade-Ins||TAXABLE *|
|Vending Machine Sales|
* See notes in category taxability page for details
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