Rhode Island Tax Guide 2025

Explore Rhode Island's 2025 state tax rates for income, sales, property, retirement, and more. Learn how Rhode Island compares nationwide.

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Rhode Island state tax: Overview

Property taxes in Rhode Island can be on the pricey side. Higher-than-average rates, combined with elevated home values, often lead to larger tax bills for homeowners.

That said, there are some positives to note. The sales tax rate is fairly reasonable, which helps keep everyday purchases more affordable. Income tax rates are also relatively low compared to many other states, particularly for individuals with higher earnings. All in all, Rhode Island offers a mix of tax challenges and advantages, depending on your situation.


[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.]

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Rhode Island income tax

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Rhode Island has a graduated state individual income tax rate ranging from 3.75 percent to 5.99 percent.

Rhode Island retirement taxes

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).

  • Tax on Taxable Income: Low of 3.75% (on up to $77,450) and a high of 5.99% (on more than $176,050)
    • Social Security: Partially Taxable (Income requirements apply)
    • Pensions: Partially Taxable
    • 401(k) and IRA Distributions: 401(k) distributions (partially taxable) and IRA distributions (fully taxable)

Rhode Island sales tax

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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?

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In Rhode Island, the average effective property tax rate is 1.05%, 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 tax

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Gasoline

$0.33 per gallon

Diesel

$0.33 per gallon

Source: Sales Tax Handbook


Rhode Island taxes on alcohol and tobacco

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Rhode Island tobacco taxes

Product

Tax Amount

Cigarettes

$3.75 per pack

Other Tobacco Products

80% of wholesale price

Medical Marijuana

7%

Source: Sales Tax Handbook

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Rhode Island alcohol taxes

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 $1,802,431 are subject to the tax. Estate tax rates in Rhode Island range from 0.8% to 16%.

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Katelyn Washington
Former Tax Writer

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.