Rhode Island Sales Tax Law Changes Effective October 1, 2011

Thursday, October 06, 2011

Rhode Island has significantly revised several provisions of its sales and use tax laws effective October 1, 2011.

First, Rhode Island has narrowed its exemption for drugs, so that sales of over-the-counter drugs are now generally taxable.

Second, Rhode Island has changed its tax treatment of prewritten software. Previously, electronically downloaded software was not taxable; under the new provisions, Rhode Island taxes sales of electronically downloaded software, including smart phone apps.

Third, Rhode Island now taxes package tours and scenic and sightseeing transportation services, including boat tours, bus or trolley tours, train tours, and helicopter or airplane tours. Persons providing package tours or sightseeing transportation services are now considered to be retailers and are required to register with the state’s tax administrator.

Finally, Rhode Island now includes sales of medical marijuana in the definition of “sales” that are subject to sales tax.

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