State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Rhode-Island (RI)

RI Sales Tax - Name of Tax and General Application:

Rhode Island imposes a tax on retail sales of tangible personal property (other than resale) and certain services in the state. This tax is known as a "sales tax". Additionally, there is a tax imposed on use, storage or consumption of tangible personal property purchased from a retailer in the state. This tax is known as a "use tax" and only applies in situations where no sales tax has been paid.

RI Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Rhode Island imposes nexus when a retailer conducts regular or systematic solicitation of tangible personal property by means of advertising in newspapers, magazines, billboards, brochures, catalogs or other media mailed to or distributed in Rhode Island by telephone, the internet, TV, radio, or other media. As of July 1, 2009, Rhode Island redefined the term "retailer" to include e-commerce businesses that use commissions, referral fees, or other types of compensation to solicit business through an independent contractor; this results in nexus if the cumulative gross receipts as a result of such referrals exceed $5,000 during the previous four quarters. Merely placing an internet advertisement does not result in such a referral.

RI Local Tax - Do Localities Impose Tax?

No, Rhode Island does not impose local sales tax.

RI Resale Certificate Renewal Agreements:

Sales for resale are not taxable and are excluded from the definition of "retail sales." A certificate or other proof is required to establish a sale for resale was made.

RI Resale Certificate Renewal Periods

The state can not request renewal of blanket certificates when there is an ongoing relationship between buyer and seller. An ongoing relationship exists when no more than twelve months passes between transactions.

RI Statute of Limitations

Later of three years from: the date the return was filed or the 15th day of the month following the month in which the return was due.