Rhode Island State Tax Guide
Rhode Island state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.
Rhode Island state tax: Overview
Rhode Island state tax is high where property taxes are concerned. The higher-than-average tax rate and home values (compared to other states) can drive up tax bills. However, the sales tax rate in Rhode Island is reasonable, and income tax rates are fairly low compared to many other states, especially for taxpayers with higher incomes.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Rhode Island income taxes
Rhode Island has a graduated state individual income tax rate ranging from 3.75 percent to 5.99 percent.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Rhode Island tax on retirement income: Military and Railroad Retirement benefits are tax-exempt. Social Security retirement benefits are exempt for retirees with a federal adjusted gross income (AGI) below the income thresholds set by the state.
Taxpayers who have reached full retirement age can exclude up to $20,000 of income ($40,000 for joint filers) from annuities and pensions (excluding IRAs).
Rhode Island sales tax
Rhode Island's state sales tax rate is 7%. Localities do not impose additional sales taxes, according to the Tax Foundation.
- Groceries: Exempt
- Clothing less: Exempt
- Prescription drugs: Exempt
How much are Rhode Island property taxes?
In Rhode Island, the average effective property tax rate is 1.23%, which can result in costly tax bills, especially considering the high home values in the state (when compared to other states).
Rhode Island Property Tax Breaks for Retirees
Cities and towns in Rhode Island can offer property tax credits to eligible homeowners. For example, South Kingstown offers a property tax credit of up to $2,472 to retirees age 65 and older that meet the following criteria.
- Homeowners must have owned and resided at a property in South Kingston for the past five years.
- Household income must fall below specified income limits to qualify.
Property tax credit amounts and criteria may vary from town to town. Retirees in Rhode Island should check with the jurisdiction where they live for more information about available tax credits.
Rhode Island gas taxes
Gasoline: $0.33 per gallon.
Diesel: $0.33 per gallon.
Source: Sales Tax Handbook
Rhode Island taxes on alcohol and tobacco
Product | Tax Amount |
---|---|
Cigarettes | $3.75 per pack |
Other Tobacco Products | 80% of wholesale price |
Source: Sales Tax Handbook
Product | Tax Amount |
---|---|
Wine | $1.40 per gallon |
Beer | $0.10 per gallon |
Liquor | $5.40 per gallon |
Source: Sales Tax Handbook
Rhode Island estate and inheritance taxes
Rhode Island doesn't have an inheritance tax, but the state has an estate tax. Only estates valued at more than $1,733,264 are subject to the tax. Estate tax rates in Rhode Island range from 0.8% to 16%.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
-
These Dementia-Friendly Places Welcome Alzheimer's Patients
Dementia-friendly towns, restaurants and cruises can improve the lives of people with dementia by offering experiences that ease their isolation.
By Dawn Fallik Published
-
Five Financial Tips to Help You Plan for the Unexpected
It's impossible to predict the future, but you can still create a financial plan that includes buffers for life's uncertainties.
By Eric Roberge, Certified Financial Planner (CFP) and Investment Adviser Published
-
New 2025 Child Tax Credit Announced: How Much Is It?
Family Tax Credits Explore the new IRS-adjusted amounts for popular family tax credits.
By Gabriella Cruz-Martínez Published
-
Three Ways to Avoid the Mansion Tax
Mansion Tax Some homebuyers have found creative loopholes around the mansion tax, but are they legal?
By Gabriella Cruz-Martínez Published
-
Three Creative Ways to Lower Your Retirement Taxes
Tax Tips You can apply key minimalism concepts for potential tax savings. Here’s how.
By Kate Schubel Published
-
States That Offer a Child Tax Credit in 2024
Child Tax Credit Fifteen states plus the District of Columbia currently offer a child tax credit. Here’s how much you can get.
By Gabriella Cruz-Martínez Last updated
-
Three Tax Reasons to Retire in Panama
Retirement Taxes With low property taxes and tax-free foreign income, this tropical paradise could make you rethink retirement as a U.S. expat.
By Kate Schubel Last updated
-
Is the IRS Coming for Your Gambling Winnings?
Tax Tips The latest tax audit on unreported income points to high-income, high-wealth gamblers. Could
By Kate Schubel Published
-
Best States to Buy Chocolate Candy Tax-Free
State Taxes There’s something spooky this Halloween and it’s not just the ghouls. Find out if your state’s sales tax takes a bite out of sweet savings.
By Kate Schubel Last updated
-
Five Ways Your Boss Can Step Up in the Aftermath of a Hurricane
Tax Relief The IRS offers some tax advantages for employers that financially help their employees during federally declared disasters.
By Gabriella Cruz-Martínez Published