Updated March 26 at 7:54am

Tax changes go into effect on Monday


PROVIDENCE – The R.I. Division of Taxation is reminding retailers and consumers of three major sales tax changes going into effect on Monday, Oct. 1.

As of Monday, the 7 percent sales and use tax will apply to clothing, including footwear, that’s priced at more than $250 an item.

Only increments greater than $250 will be taxed, so if a wool coat costs $275, the tax rate will be applied to $25 and consumers will pay a tax of $1.75.

In addition, on Monday, the 7 percent sales and use tax will apply to taxi, limousine, charter bus and other ground transportation services. Interstate transportation services are exempt from the 7 percent tax.

Pet care services, including boarding, grooming, sitting and training, will be included in the state’s 7 percent sales and use tax on Monday. Veterinary visits and laboratory testing services are exempt from the tax.

“We’ve been working closely with retailers, accountants, business groups, and others to get the word out about these changes,” state Tax Administrator David M. Sullivan, said in a statement. “We’ve received a lot of cooperation, and we anticipate that the changes will be implemented smoothly.”

The tax changes, which were included in a budget bill approved and enacted in June, were postponed until Oct. 1 to allow time for implementation.

Under the tax changes, some Rhode Island businesses are now considered retailers under state law and must register with the Tax Division.


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More great reasons to incorporate your business in a neighboring state! Way to go, RI GA and Gov! Keep stomping on those small biz owners until they stop setting up shop in the smallest state in the US - where competition is never more than a few minutes across a friendlier state line!...and how exactly does tax revenue increase when small businesses close because they can't compete w/their MA and/or CT neighbors???

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