Rhode Island Tax Guide 2026

Personal income tax

R.I. Gen. Laws §44-30-2.6 establishes 3 brackets: • 3.75% on first $77,450 (single) • 4.75% from $77,450 to $176,050 • 5.99% above $176,050 MFJ brackets are the SAME as single (no marriage adjustment in bracket thresholds — a quirk that creates marriage penalty for two-earner households). Standard deduction: $10,800 single / $21,600 MFJ (indexed; RI uses its own, lower than federal $15k/$30k). Personal exemption: $5,100 per taxpayer/dependent (indexed). No state-level QBI deduction (RI adds back federal §199A). No state-level AMT. Social Security: PARTIAL exemption — fully exempt for filers ≤ full federal retirement age with AGI < $101,000 single / $126,250 MFJ (R.I. Gen. Laws §44-30-12(c)). High-income retirees face partial inclusion. Pension exclusion: up to $20,000 per filer (military, federal, state pensions) — phase-out applies.

Sales tax — clean and uniform

State sales tax 7% (R.I. Gen. Laws §44-18-18). NO LOCAL SALES TAX — clean uniform rate statewide. Special: • Meals & beverage tax: 1% local meals tax (cities) + 7% state sales tax = 8% combined on restaurant meals • Lodging: 5% state hotel tax + 1% local lodging tax + 7% sales tax = 13% combined on hotels (plus possible city/town add-ons) • Rental cars: 6% surcharge + 7% sales tax Groceries: EXEMPT. Prescription drugs: exempt. Clothing: EXEMPT up to $250 per item (clothing tax exemption is a regional anchor — MA and VT have similar; CT and NY tax clothing). Most services: exempt. Economic nexus (R.I. Gen. Laws §44-18.2-3): $100,000 in cumulative sales OR 200 transactions.

RI Estate Tax — the planning trap

R.I. Gen. Laws §44-22-1.1 imposes Rhode Island estate tax on the value of the gross estate ABOVE the exemption. For 2024, the exemption was $1,802,431 (indexed annually; approximately $1.85M+ for 2026 — verify). This is LOW compared to federal $15M exemption ($13.99M for 2025 pre-OBBBA, $15M for 2026 under OBBBA) — meaning a RI resident's $5M estate owes ZERO federal estate tax but significant RI estate tax. Rate structure: graduated 0.8%–16% on the amount ABOVE the exemption, applied via brackets in §44-22-1.1. Example: $5M RI estate, $1.85M exemption → $3.15M taxable to RI → estimated RI estate tax ~$300,000 (varies based on bracket application). Portability: NO RI portability between spouses (federal portability exists; RI does not honor). First-to-die spouse's unused exemption is LOST unless captured in a credit-shelter/bypass trust. No RI inheritance tax (separate concept; RI imposes estate tax on the estate, not on recipients). No RI gift tax. However, RI has a 3-year lookback for gifts (gifts within 3 years of death pulled back into the estate). RI estate tax is a significant planning issue for RI residents with $2M+ estates — many use spousal QTIP trusts, irrevocable life insurance trusts (ILITs), or out-of-state residency planning.

Property tax

Statewide average effective ~1.40% — above national average. Providence County: ~1.62%, Kent (Warwick/East Greenwich): ~1.51%, Newport: ~1.04% (lower because of high-value waterfront concentration), Washington (South County): ~1.13%. Notable cities: • Providence: 1.79% effective (one of highest in New England) • Cranston: 1.92% • East Providence: 1.55% • Warwick: 1.42% • Newport: 1.04% (waterfront dilution) Owner-Occupied Homestead Exemption: locally variable; some cities offer reductions (Providence allows up to 50% reduction on first $300k of assessed value for owner-occupants). Property Tax Relief (statewide, R.I. Gen. Laws §44-33): refundable income tax credit up to $675 for filers with household income < $35,000 (elderly/disabled). Elderly exemption: locally administered; varies. Car tax: RI HAD a personal property tax on vehicles (the 'car tax') that was phased out for tax year 2022+ — for 2026, no statewide car tax.

Business considerations

Corporate income tax: 7% flat (R.I. Gen. Laws §44-11-2). Minimum tax $400/year for all entities. LLC fee: $400/year minimum (R.I. Gen. Laws §7-16-67) — one of the higher minimum LLC fees nationally. Plus $50 annual report. Apportionment: single-sales factor for most industries (post-2016 reform). PTET: RI enacted PTET via H 7059A of 2019 — entity-level election at flat 5.99% (top individual rate); refundable credit to owners. Modest federal SALT-cap benefit. Unemployment tax: 1.1%–9.7% on $29,200 wage base. Real Estate Conveyance Tax: $2.30 per $500 of consideration (effective 0.46%) (R.I. Gen. Laws §44-25). No gift tax. No franchise tax beyond the corporate minimum. Rhode Island combines moderate personal income tax (5.99% top) with HIGH estate tax exposure (low $1.85M exemption) and HIGH property tax (1.40%+ average). The state's small geographic footprint means cross-border arbitrage with MA, CT is common — particularly for estate planning (many high-net-worth RI residents establish FL or NH residency to avoid the estate tax).

Worked example: Vincent Lombardi, Providence-based mortgage broker (MFJ, 2026, age 55)

Vincent and his wife together earn $310,000 (Vincent self-employed $200k; wife W-2 $110k). Own a $475k Providence home (homestead). Vincent's estate (incl. business interest, home, investment accounts) totals $4.2M as of estate-planning date.

Federal: SE tax + ordinary income tax on combined $310k + §199A 20% QBI (mortgage brokerage = SSTB; phases out above $383,900 MFJ 2026 — under threshold so likely gets full or partial QBI). Rhode Island: Federal AGI (after half-SE): ~$300,000 Less standard deduction: $21,600 MFJ Less personal exemptions (2 × $5,100): $10,200 Less federal QBI add-back: +$40,000 (RI adds back) RI taxable: $300,000 − $21,600 − $10,200 = $268,200 (before QBI add-back; add it back if it was deducted federally → effectively no net change here as we don't subtract) Tax (2026 brackets, MFJ uses single brackets due to no marriage adjustment): First $77,450 × 3.75% = $2,904 Next $98,600 × 4.75% = $4,684 Above $176,050 ($92,150) × 5.99% = $5,520 Total: $13,108 Property tax on $475k Providence home @ 1.79% (or after homestead reduction, somewhat lower): ~$8,505/yr. ESTATE PLANNING: Vincent's $4.2M estate exceeds RI exemption $1.85M → ~$2.35M taxable Estimated RI estate tax: ~$200,000–$240,000 (graduated rate 0.8%–16%) Federal estate tax: $0 (well under $15M exemption) Without RI estate planning, his heirs face $200k+ RI estate tax that would be $0 in NH, MA (under the $2M MA exemption), or FL. Common planning: spousal credit-shelter trust to capture both exemptions ($1.85M each); ILITs for life insurance; possible residency change to NH or FL. Total annual RI burden: ~$13,108 income tax + ~$8,505 property + LARGE latent estate tax exposure.

Statute references

• Personal income tax (3-bracket, top 5.99%) — R.I. Gen. Laws §44-30-2.6
• Social Security/pension partial exemption — R.I. Gen. Laws §44-30-12(c)
• Sales tax 7% — R.I. Gen. Laws §44-18-18
• Economic nexus (Wayfair) — R.I. Gen. Laws §44-18.2-3
• Corporate income tax 7% — R.I. Gen. Laws §44-11-2
• RI Estate Tax — R.I. Gen. Laws §44-22-1.1
• Property Tax Relief credit — R.I. Gen. Laws §44-33
• LLC annual fee $400 — R.I. Gen. Laws §7-16-67
• Real Estate Conveyance Tax — R.I. Gen. Laws §44-25

Related pages

• State Tax Comparison →
• Estate Tax Calculator →
• PTET Analyzer →