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More Sales Taxes Taking Effect

Rhode Island adds sales tax to clothing over $250, transportation services, pet care.

Rhode Island tacks on more sales taxes starting today.

The Rhode Island Division of Taxation sent out the following information last week and urged retailers and consumers to take note of the following changes to Rhode Island’s sales tax that take effect today, Oct. 1

  • The 7 percent sales and use tax will apply to articles of clothing, including footwear, priced at more than $250 per item. Only the increment above $250 will be taxed. For example, for a suit that costs $275, the tax rate will be applied only to $25, resulting in a tax of $1.75.
  • The 7 percent sales and use tax will apply to taxicab services, limousine services, charter bus services, and other transit and ground transportation services. Interstate transportation and certain other transportation services will be exempt from the tax.
  •  The 7 percent sales and use tax will apply to pet care services – including boarding, grooming, sitting, and training pets. Veterinary and testing laboratories services will be exempt from the tax.

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

The tax changes were included in a budget bill approved and enacted in June 2012. Their effective date was postponed until Oct. 1 to allow time for implementation, according to the taxation division.

As a result of the changes, some businesses will now be considered retailers under state law: They must register with the Tax Division, pay the annual $10 sales tax permit fee, and file sales and use tax returns with the Tax Division, said Peter McVay associate director of revenue services.

Anyone who has questions about the sales tax changes should call the Tax Division’s Excise Tax section at (401) 574-8955.

pferd October 01, 2012 at 05:39 PM
Throw out every incumbent. WAKE UP RHODE ISLAND. THEY ARE ROBBING YOU BLIND
Gary Morse October 01, 2012 at 06:33 PM
Your taxes are going even higher if you approve Question 7 on the November ballot (affordable housing). Not only will taxpayers have to pay off this bond, but taxpayers will also have to subsidize the property taxes year after year from RI Housing's poorly planned projects. Taxpayers will get hit twice.
KH Parent October 02, 2012 at 08:18 AM
Well, clearly I will go to Mass to buy big ticket clothes items and for dog grooming. I am sure many others will too. RI leaders are so illogical its painful.
Dorothy O'Gara October 02, 2012 at 01:13 PM
If you purchased one item of clothing for $350., the sales tax of 7% would be calculated on the $100. over the $250. which would result in tax in the amount of $7. I do not purchase clothing items in that price category and I really do not believe, given the income level of most Rhode Islanders, that there are many people who are in the position of purchasing articles of clothing that cost over $250. each. Therefore, that particular tax change should not effect many state residents.

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