Rhode Island rental tax has two separate layers: a 14% consumption tax on short-term stays of 30 days or less that you collect from guests and send to the state, and the regular Rhode Island personal income tax on your net rental profit, which tops out at 5.99%. Long-term rentals skip the 14% but still owe the income tax. The 14% figure reflects rates in effect January 1, 2026.
The 14% Short-Term Rental Tax, Broken Down
Any stay of 30 consecutive days or fewer triggers three state-level taxes that add up to 14% of the gross rental charge. What those three taxes are depends on whether you rent the whole dwelling or just a room inside it.
Rent out an entire home, condo, or apartment, and you collect:
- 7% state sales tax on gross receipts1Rhode Island General Assembly. Rhode Island General Laws 44-18-18 – Sales Tax Imposed
- 5% whole-home short-term rental tax, which took effect January 1, 20262Rhode Island Division of Taxation. Hotel Tax
- 2% local hotel tax, up from 1% on the same date3Rhode Island Division of Taxation. Changes to the Taxation of Short-Term Rentals
Rent out a private room while you keep living in the rest of the dwelling, and the 7% sales tax and 2% local hotel tax stay the same, but the middle layer swaps to the 5% state hotel tax instead of the whole-home tax. No stay is ever subject to both the 5% state hotel tax and the 5% whole-home tax; it is one or the other.3Rhode Island Division of Taxation. Changes to the Taxation of Short-Term Rentals The guest pays 14% on top of your listed price either way.
Before 2026, whole-home rentals only owed 8% because entire residential dwellings were exempt from the 5% state hotel tax. The new whole-home tax closed that gap, bringing standalone rentals to the same effective rate as hotel and lodging-house rooms.2Rhode Island Division of Taxation. Hotel Tax
These are pass-through charges. You add them to the guest’s bill and remit them. If you fail to collect the correct amount, you still owe the full tax to Rhode Island out of your own pocket.
Income Tax on Rental Profits
Separately from the consumption taxes, every dollar of net rental income you earn in Rhode Island is subject to the state’s personal income tax. This applies to short-term and long-term rentals alike. Residents report rental income on Form RI-1040; out-of-state owners of Rhode Island property file RI-1040NR for Rhode Island-sourced income.
Rhode Island has three brackets:4Rhode Island General Assembly. Rhode Island General Laws 44-30-2.6 – Rhode Island Taxable Income, Rate of Tax
- 3.75% on taxable income up to $55,000
- 4.75% on taxable income from $55,001 to $125,000
- 5.99% on taxable income above $125,000
These rates apply to your total Rhode Island taxable income, not just the rental side. Rental profits stack on top of wages and other income, so a few thousand dollars of net rental income can push your top dollars into a higher bracket. If you have $80,000 in wages and $30,000 in net rental profit, that rental money is sitting in the 4.75% band and tipping into the 5.99% one.
You deduct ordinary rental expenses — mortgage interest, property taxes, insurance, repairs, depreciation — before calculating taxable profit. Rhode Island generally follows federal rules, so what you claim on federal Schedule E typically flows through to your state return. If your total tax liability is large enough, Rhode Island expects quarterly estimated payments rather than a single payment at filing time.
Registrations You Need Before Collecting Rent
Three separate registrations stand between you and your first paying guest. Skipping any one of them can mean fines or a pulled listing.
Division of Taxation Sales Tax Permit
To legally collect and remit the 7% sales tax and the applicable hotel taxes, you need a Sales Tax Permit from the Rhode Island Division of Taxation. The application asks for your Social Security Number or Federal Employer Identification Number, your legal name, and the address of each rental property. Identify the business type as transient lodging so the Division categorizes the account correctly. Forms are on the Division of Taxation website for download or electronic submission.
Department of Business Regulation Short-Term Rental Registry
If you list on a hosting platform like Airbnb or Vrbo, Rhode Island General Laws § 42-63.1-14 requires registration with the Department of Business Regulation (DBR). Your registration number has to appear on the listing, and the platform must verify it.5Rhode Island General Assembly. Rhode Island General Laws 42-63.1-14 – Short-Term Rental Registration Registrations expire at the end of the calendar year they were issued. If you don’t renew, the platform has to remove your listing within 14 days of being notified by DBR.
Operating unregistered is costly. Civil penalties start at $250 for the first 30 days of non-compliance, climb to $500 for days 31 through 60, and reach $1,000 past the 60-day mark.6Rhode Island Department of Business Regulation. Short-Term Rentals Frequently Asked Questions
Department of Health Rental Registry
Every landlord — short-term and long-term — must register each rental unit with the Rhode Island Department of Health. The registry collects your name or business entity, address, email, phone number, and identifying details for each unit. Pre-1978 properties must also submit a valid Certificate of Lead Conformance or proof of exemption. Initial registration is due within 30 days of acquiring a rental or signing a new tenant, and every landlord has to re-register or confirm information by October 1 each year.7Rhode Island General Assembly. Rhode Island General Laws 34-18-58 – Rental Property Registration
Filing and Paying the Consumption Taxes
Sales and hotel tax returns are due monthly. File and pay by the 20th of the month following the rental activity, so taxes collected in January are due by February 20.8Rhode Island Division of Taxation. Sales and Use Tax The Rhode Island Taxpayer Portal is the main way to submit returns and pay electronically.9Rhode Island Division of Taxation. RI Division of Taxation Self-Service Taxpayer Portal Paper filing with a check or money order is also allowed.
Miss the deadline and you owe interest on top of the tax. Rhode Island charges delinquent interest at prime plus two points, with a 12% annual floor. Sales tax carries a tougher rule because the state treats it as a trust fund tax you collected on its behalf: the minimum rate for late sales tax is 18% per year.10Rhode Island General Assembly. Rhode Island General Laws 44-1-7 – Interest on Delinquent Payments
Some hosting platforms collect and remit certain Rhode Island taxes for you. Check your platform’s tax documentation to see which taxes it handles and which ones you still owe. A platform might remit the 7% sales tax while leaving the hotel tax or the whole-home tax to you. Both double-paying and underpaying create audit problems, so sort this out before your first stay rather than after.
Long-Term Rentals: What Changes
If your tenant signs for more than 30 consecutive days, the 7% sales tax, 5% hotel or whole-home tax, and 2% local hotel tax do not apply. The stay is treated as housing, not lodging.1Rhode Island General Assembly. Rhode Island General Laws 44-18-18 – Sales Tax Imposed You still owe state income tax on net rental profit at the brackets above, you still have to register with the Department of Health, and the lead rules below still apply.7Rhode Island General Assembly. Rhode Island General Laws 34-18-58 – Rental Property Registration The only thing that falls off at day 31 is the 14%.
Lead Certificate for Pre-1978 Properties
Rhode Island’s Lead Hazard Mitigation Law adds a compliance layer for any rental property built before 1978. You need a Certificate of Lead Conformance (CLC) before renting the unit, and the certificate must be renewed every two years.11Rhode Island Department of Health. Lead Hazard Mitigation Program12Cornell Law School. 216 RICR 50-15-5.3 – Inspection Types
Getting the certificate means hiring a licensed lead inspector. If the property fails, you have 30 calendar days to fix the hazards and schedule a reinspection. For a continuing tenant who hasn’t changed, you can skip the full reinspection and submit a notarized Affidavit of Completion of Visual Inspection instead, but only after completing a three-hour lead awareness class. That affidavit is good for two years or until the tenant moves out, whichever comes first.11Rhode Island Department of Health. Lead Hazard Mitigation Program
A few property types are exempt: units with a full Lead-Safe or current Conditional Lead-Safe Certificate, temporary or seasonal housing rented to the same tenant for no more than 100 days per calendar year, and housing designated for residents age 62 or older.11Rhode Island Department of Health. Lead Hazard Mitigation Program
Rhode Island offers a personal income tax credit against lead remediation costs, up to $1,500 per unit for mitigation and up to $5,000 per unit for full abatement, claimed on Form RI-6238 and capped at three units total.13Cornell Law School. 280 RICR 20-20-4.8 – Credit Calculation Keep your CLCs and affidavits for at least five years in case of audit.