Yes, there is sales tax in Rhode Island: a flat 7% statewide rate on most retail purchases of tangible goods, unchanged since 1990.1Rhode Island General Assembly. Rhode Island Code 44-18-18 – Sales Tax Imposed Cities and towns cannot add their own sales tax on top, so the rate in Providence is the same as the rate in Westerly or Narragansett.2Rhode Island Division of Taxation. Sales and Use Tax That makes the math predictable, but several big categories of spending work differently: some purchases are completely tax-free, while hotel stays and restaurant meals carry extra levies on top of the 7%.
What the 7% Applies To
The 7% rate applies to the gross receipts from retail sales of tangible personal property. It is collected by the retailer at the register and remitted to the Rhode Island Division of Taxation. The tax is calculated on the full purchase price before any manufacturer coupons, but after store discounts that actually reduce what you pay.
Several services also fall under the 7% rate. Local, interstate, and international phone service is taxable, along with cellular service, paging, and specialized mobile radio.3Rhode Island Division of Taxation. Telecommunications Service Regulation SU 09-129 Prepaid calling services and prepaid wireless are specifically excluded from that definition.4Rhode Island Division of Taxation. Advisory – Telecommunications Service Electricity, gas, and water delivered to a commercial or industrial customer are also generally taxable, which can matter if you run a small business out of a mixed-use space.2Rhode Island Division of Taxation. Sales and Use Tax
What’s Exempt from Rhode Island Sales Tax
The exemption list is long. The ones most shoppers run into involve food, clothing, medicine, and home utilities.
Groceries
Food and food ingredients bought for home consumption are exempt.5Rhode Island Division of Taxation. Regulation SU 09-59 – Food and Food Ingredients Fresh produce, meat, dairy, bread, and packaged goods from the grocery store are all tax-free. Prepared meals from restaurants, delis, and caterers do not qualify and are handled separately below.
Clothing and Footwear Under $250 per Item
Clothing and footwear priced at $250 or less per item are completely exempt. If a single item costs more than $250, the tax applies only to the amount above that threshold.6Cornell Law Institute. 280 RICR 20-70-6.6 – Taxation of Clothing and Essential Clothing A $300 jacket generates tax on $50, so $3.50 instead of $21. The rule applies per item, meaning two $200 shirts in the same transaction are both fully exempt.
Prescription and Over-the-Counter Drugs
Prescription drugs are exempt. So are over-the-counter drugs that carry a “Drug Facts” label as required by federal regulation, which covers pain relievers, antacids, cough medicine, and antiseptics.7Rhode Island Division of Taxation. Advisory – Medicines, Drugs, Over-the-Counter Drugs Prosthetic devices and durable medical equipment are exempt too. Grooming and hygiene products that aren’t drugs stay taxable.
Feminine Hygiene Products
Tampons, sanitary napkins, menstrual cups, panty liners, and similar products have been exempt since October 2019. Breast pump collection and storage supplies are also exempt.
Other Common Exemptions
- Newspapers and textbooks are fully exempt.
- Heating fuels for residential use, including fuel oil and propane, are exempt.
- Residential electricity, gas, and water are exempt.
- Dietary supplements are exempt, which is less common than it sounds; many states tax them.
- On a car purchase, the 7% applies only to the net price after a dealer trade-in allowance is subtracted.8Rhode Island Division of Motor Vehicles. Sales Tax
Hotels and Short-Term Rentals
Lodging is where the total tax climbs well above 7%. A hotel room is subject to the 7% sales tax, a separate 5% statewide hotel tax, and a local hotel tax that increased from 1% to 2% effective January 1, 2026, for a combined rate of 14%.9Rhode Island Division of Taxation. Hotel Tax
Short-term rentals of entire houses and apartments now face the same structure. As of January 2026, whole-dwelling rentals through platforms like Airbnb and Vrbo are subject to the 7% sales tax, the 5% statewide tax, and the 2% local hotel tax. The previous combined rate on whole-house rentals was just 8%, so this was a significant jump.9Rhode Island Division of Taxation. Hotel Tax
Restaurant Meals: 8% Total
Prepared meals from restaurants, food trucks, bars, and any eating or drinking establishment carry the 7% sales tax plus a 1% local meals and beverage tax. The Division of Taxation administers both, so the combined 8% shows up as a single line on your receipt or two separate ones, depending on the register.10Rhode Island Division of Taxation. Meals and Beverage Tax It’s a noticeable gap from the 0% you pay on groceries at the store next door.
Online Purchases and Use Tax
Most online orders delivered to Rhode Island already have the 7% built in. Out-of-state retailers must collect and remit the tax if, in the prior calendar year, they had $100,000 or more in gross revenue from sales into the state or 200 or more separate transactions delivered into the state.11Rhode Island General Assembly. Rhode Island Code 44-18.2-3 – Remote Sellers, Marketplace Facilitators, and Referrers Marketplace facilitators like Amazon, eBay, and Walmart.com handle collection for sales made through their platforms.12Rhode Island Division of Taxation. Remote Sellers
When a seller doesn’t collect, the obligation shifts to you. Rhode Island charges a 7% use tax on anything you buy from an out-of-state retailer that would have been taxable if purchased in state.13Rhode Island General Assembly. Rhode Island Code 44-18-20 – Use Tax Imposed Individuals report and pay it once a year on the Rhode Island personal income tax return using Form T-205P.14Rhode Island Division of Taxation. Understanding Rhode Island Use Tax It comes up less often than it used to, because the major online retailers now collect at checkout, but it still applies to purchases from smaller vendors that fall below the collection thresholds.