Rhode Island is not a great place for taxes. They have income tax, business tax, estate tax, and really high property taxes. Unlike most states they also tax social security and have a large payroll tax wage base. It’s not a place to move if you’re trying to save.
State Taxes at a Glance – Rhode Island
| Type of Tax | 2023 |
|---|
| Individual Rates | 3.75% to 5.99% |
| Corporate / Business Tax Rates | 7.00% flat tax |
| Gross Receipts Tax | None |
| Sales Tax | 7.00% |
| Property Taxes | 1.43% as a percentage of primary home |
| Estate or Inheritance Tax | Yes – Estate Tax |
State Income Taxes in Rhode Island
The state of Rhode Island does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale with multiple brackets (3). The tax rates range from between 3.75% to 5.99%. The highest bracket starts at $155K.
State Business Taxes in Rhode Island
The state of Rhode Island has a flat corporate income tax rate of 7.00%. The State of Rhode Island recognizes Federal flow-thru entities, such as S-Corporations, LLCs and Partnerships, and are therefore not subject to the corporate tax rate (however they are subject to the individual rate).
Sales and Property Taxes in Rhode Island
Sales Tax – unlike other states, Rhode Island has only a state sales tax and no local sales tax. Its state sales tax is a flat 7.00%. Note: groceries are exempt from sales tax in Rhode Island.
Property Taxes in Rhode Island – the average property tax rate for residential property in the state of Rhode Island is 1.43%, which is well above the national average of 1.08%.
Estate Taxes in Rhode Island
Rhode Island is one of only a few states that has an Estate Tax. The tax based on the amount of net wealth a personal has when they pass away. Important things to keep in mind –
- The first $1,733,264 is exempt from Estate Tax (and is indexed for inflation)
- The tax rate ranges from 0.80% to 16.00%,
Rhode Island DMV fees
Rhode Island’s DMV fees are actually an excise tax you pay to the city or town your automobile is registered in. Since it’s a tax, it’s deductible on your personal tax return.
For your reference, here’s a link to Rhode Island’s DMV website.
Rhode Island Domicile
If you maintain a permanent place of abode for over 183 days, in aggregate, you are considered a Rhode Island resident.
Rhode Island Tax on Social Security Benefits
Rhode Island is one of the few states that assesses state income tax on social security income. However, there are exemptions:
- Married filing jointly and you make less than $111,200
- Single and you make less than $88,975
All others must partially pay tax on social security benefits.
Payroll Taxes in Rhode Island
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Rhode Island has a wage base of $28,200
- Wage Base Note – If your UI has a negative balance, your wage base is increased by $1,500 (i.e. $29,700)
- UI Rates – range from 1.20% to 9.80%
- Schedules – Kansas has multiple rate schedules regarding UI
Rhode Island Business Entities – LLCs
Rhode Island has average costs in regard to opening an LLC. Here are some important facts:
- Rhode Island’s annual LLC fee is $50.
- When you register with the state, you pay a one time fee of $100
- Secretary of State of Rhode Island website – click here
Rhode Island Tax Contact Phone Numbers
Important phone numbers for the Rhode Island Department of Taxation:
- Website: www.tax.ri.gov
- Phone# for Individuals – (401) 574-8829
- Phone# for Businesses – (401) 574-8935