Any business that sells goods or taxable services within the state of Rhode Island to customers located in Rhode Island is required to collect sales tax from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in Rhode Island must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.
Do you need to get a Sales Tax certificate in Rhode Island?
You may need a Sales Tax Certificate if any of the following apply your business:
- You have a physical office or place you conduct
- You sell or ship products to a buyer in Rhode Island
- You have a distribution location such as a storage area or warehouse space
- You have employees physically present in Rhode Island (including independent contractors, Sales persons, representatives, or agents)
- Your business has a 3rd party affiliate located inside the state of Rhode Island
- Your business makes deliveries of merchandise in company owned vehicles
- Your business advertises within the state of Rhode Island
- Your business attends tradeshows within the state of Rhode Island
Your business has economic presence (businesses who make over $100,000 in sales annually or more than 200 transactions) - Your business provides taxable services within the state of Rhode Island
What constitutes taxable services in Rhode Island State?
The majority of service businesses are not taxable in Rhode Island. The exceptions would be a service business that manufactures or creates tangible parts or products.
Why do I need a Sales Tax Certificate to purchase wholesale items for Resale in the State of Rhode Island?
As a wholesale company conducting business in the state of Rhode Island, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.
Do you have to collect Sales Taxes from out of state buyers?
While you may not collect sales taxes from your out of state customers, you are still required to collect their information and report it to Rhode Island.
Do you need to collect sales tax on shipping and handling of merchandise?
If you sell tangible goods in Rhode Island that are taxable than you would charge sales tax on shipping and handling charges as part of the sales price of the merchandise
Is there sales tax on drop shipments in the state of Rhode Island?
A drop shipment is where a seller (most times out of state) sells a product which is then delivered to a consumer by a third-party shipper. In most instances, drop shipments in Alabama are required to have sales tax added
Are there any exemptions to taxable items sold?
Certain specific medical devices, raw materials, newspapers and magazines, and custom downloadable software are tax exempt
Register for a Rhode Island sales/use tax number
Rhode Island state, county, city, & municipal tax rate table