Rhode Island sales tax for online sellers: nexus, permit and filing

What is the Rhode Island sales tax rate?

The rate is 7% statewide, and Rhode Island has no local sales taxes, so the same rate applies to every delivery address. Groceries are exempt. Software that customers access online has been taxable since October 2018.

When does an online seller have to collect in Rhode Island?

You must collect if you have a physical presence in Rhode Island, such as staff, an office or inventory, or if in the previous calendar year your gross revenue from sales into Rhode Island was $100,000 or more or you made 200 or more transactions. Either test is enough. Some guides add the current year to the test, so register promptly if you pass either figure. Guidance differs on whether sales made through marketplaces count, so check with the Division of Taxation if that would decide the question.

How nexus works in general is covered in physical vs economic nexus and economic nexus explained.

What if you sell on Amazon, eBay or Etsy?

Rhode Island requires marketplace facilitators to collect and remit sales tax on the sales they facilitate, so you do not collect on those orders. Your own website and other direct channels remain your responsibility. See marketplace facilitator laws.

How do you register?

Register online through the Division of Taxation's portal for a sales permit. There is no fee; the former $10 charge was removed in July 2022. The permit is renewed each year at no cost.

What are the steps once you have nexus?

1. Confirm nexus

   Check your presence and your sales into Rhode Island against its threshold.

2. Register before collecting

   With the Rhode Island tax agency, as set out above.

3. Set up your store

   Charge the correct combined rate for each delivery address and product.

4. File and pay

   On the schedule Rhode Island assigns, including zero returns where required.

How are returns filed?

Returns are filed online and are due by the 20th of the month after the period, monthly for most sellers and quarterly for the smallest. Rhode Island also asks for an annual reconciliation after the year ends. A return is required for every period, including periods with no sales.

See how to file a sales tax return.

Why does the 200-transaction test matter?

Because it can be met at a low sales value. A seller of $15 items reaches 200 Rhode Island orders after $3,000 of sales, far below $100,000, and must then register and collect. Many states have dropped their transaction tests, but Rhode Island has kept its own, so count orders as well as dollars.

Is software as a service taxed?

Yes. Rhode Island taxes standard software hosted by the vendor and accessed online, at the full 7%. E-books and digital music and video are treated differently and are generally not taxed. Software revenue counts towards the threshold, so a software seller can have Rhode Island nexus without shipping goods. See sales tax on SaaS.

What else should sellers know?

• Sellers outside the US: the same rules apply wherever the business is based. See selling on Amazon US as a non-resident.
• Late registration: tax you should have collected becomes your own debt. See voluntary disclosure agreements and collected but not remitted.
• Records: keep sales by delivery address, tax collected and any certificates. See exemption certificates and sales tax audits.
• Stopping: returns stay due until the account is closed. See filing frequency and cancelling a sales tax permit.
• Store settings: switch on collection only once you are registered. See Shopify sales tax setup.

This guide is general information. It is not tax or legal advice for your situation.