The sales tax rate in Rhode Island is 7%, which is higher than the 6.25% rate in Massachusetts, which is a nearby state. However, some goods in Rhode Island are not subject to sales tax. Let’s examine the specifics of RI’s sales tax exemptions as well as some associated issues. What is not subject to taxes in Rhode Island?
1. Clothing and footwear: Sales tax is not applicable to clothing and footwear priced under $250.
3. Prescription and nonprescription medications: Prescription and nonprescription medications that are sold with a prescription are exempt from sales tax.
5. Motor vehicles: In Rhode Island, the sale of motor vehicles—including cars, trucks, and motorcycles—is not subject to sales tax. What is Rhode Island’s usage tax?
Items purchased outside of Rhode Island but utilized inside the state are subject to use tax. In Rhode Island, the use tax rate is also 7%, the same as the state’s sales tax. For instance, you must pay use tax if you buy a taxable item online from a merchant who does not charge sales tax in Rhode Island.
The Massachusetts sales tax rate is 6.25%, but if you live in Rhode Island and buy something there, you must also pay the Rhode Island use tax. Do certificates for Rhode Island’s sales tax exemptions expire?
Certificates of exemption from the sales tax in Rhode Island never expire. However, it is the buyer’s duty to confirm that they are still qualified for the exemption. The buyer must inform the vendor and start paying sales tax on their goods if they are no longer qualified for the exemption.
In conclusion, a number of things, including clothing and footwear, food and consumables, prescription and over-the-counter medications, medical equipment, and motor vehicles, are free from sales tax in Rhode Island. Items bought outside of Rhode Island but utilized inside the state are likewise subject to use tax. Rhode Island residents must pay use tax on out-of-state purchases; Massachusetts’ sales tax is 6.25%. Last but not least, certificates for the exemption from the sales tax in Rhode Island never expire, but it is the buyer’s responsibility to confirm that they qualify.