PROVIDENCE, R.I. (WPRI) — A number of tax changes took effect in Rhode Island on Oct. 1.
The state’s Division of Taxation posted about the updates on its website, saying the changes were approved by the General Assembly last session.
Here’s a breakdown:
Sales tax on short-term parking
The state’s 7% sales tax will be applied to all parking services where the duration is under a month. According to the division of taxation, short-term parking includes garages, paid event parking, paid beach parking and parking spaces operated by cities and towns.
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Definition of tobacco products expanded
The definition of other tobacco products (OTP) has been expanded to include all products that contain nicotine, including tobacco-free nicotine pouches like Zyn and Velo. The tax rate on the wholesale cost of these products will now be 80%.
Tax increase on real estate sales
Tier 1 and tier 2 of the Real Estate Conveyance Tax will increase from $2.30 to $3.75 per each $500 of a real estate purchase. This tax also applies to transfers made by “acquired real estate companies.”
Upcoming tax changes
Starting on Jan. 1, 2026, Rhode Island’s local hotel tax will go from 1% to 2%. There will also be a new 5% tax on short-term rentals of “entire dwellings.”
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