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.]
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 income tax
Rhode Island has a graduated state individual income tax rate ranging from 3.75 percent to 5.99 percent.
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 tax
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
-
What You Should Know About Assisted LivingIf you decide that an assisted-living community is right for you or your loved one, take these steps to make sure that its fees, services and quality of care fit your needs.
-
How One Widow Nearly Missed Out on $213,000 in Social SecurityLosing your partner often means losing 30% to 50% of your household income. This financial adviser emphasizes that planning ahead and understanding the rules surrounding survivor benefits can help.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers QualifyTax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
Ten Cheapest Places To Live in New YorkProperty Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.
-
‘My Etsy Shop is Dead’: Vendors Cry for Help Amid Trump’s TariffsTariffs Small businesses are struggling to thrive as they absorb the Trump administration’s new wave of tariffs.
-
Three Things Star Wars Fans Taught Me About TaxTax Tips May the force be with you and your taxes this Star Wars Day 2025.
-
Retirees: Don’t Miss These Valuable State Tax Breaks in 2025Retirement Planning Selecting the right state for retirement can significantly impact your financial well-being.
-
10 Cheapest Places To Live in FloridaProperty Tax Make your Florida vacation spot a place for daily living — these counties have the lowest property tax bills in the state.
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax RefundsTax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
