News & Events

Updated Rhode Island Sales Tax Reporting Requirements

-by Cody Lange, Senior Tax Specialist

Under new Rhode Island legislation, there are certain requirements for “non-collection retailers”, “referrers”, and “retail sale facilitators” with regards to collecting and reporting sales tax. These rules will apply to any taxpayer who in the immediately preceding calendar year had (1) over $100,000 of taxable sales of tangible personal, property, software or taxable services delivered into RI or (2) over 200 of such sales transactions in Rhode Island.

Sales Tax Reporting RequirementsNon-Collecting Retailer
Starting September 1, 2017, “non-collection retailers” will either need to register with the state to collect and remit sales and use tax on all taxable sales to Rhode Island or provide certain notices to customers that inform them of their sales tax responsibility regarding that purchase. These notices include the following:

  • Certain notices on the company’s website
  • Certain checkout notices to the customers at the time of purchase
  • Certain notice to customers within 48 hours of purchase
  • Annual notice by January 31, for all customers who have cumulative purchases of over $100 for the year
  • Annual attestation to the Division of Taxation that the above requirements have been met

Retail Sales Facilitator
A retail sales facilitator is any person who facilitates a sale by a retailer using in-state software to make retail sales or by contracting with a retailer to list or advertise for sale, taxable retail sales in any forum such as the internet and collecting payments from the in-state customer and transmitting them to the retailer.

Starting January 15, 2018 “retail sales facilitators” must:

  • Annually provide to the Division of Taxation a list of names/addresses of retailers for whom you collected Rhode Island sales tax; and
  • Annually provide to the Division of Taxation a list of names/addresses of retailers for whom you did not collect Rhode Island sales tax

Referrer
A referrer is a person who lists or advertises products for sale in Rhode Island for a retailer in any forum including an internet website in exchange for compensation. In addition a referrer is a person who transfers a customer to the retailer (or their website) to complete a purchase, but does not actually collect payment on the transaction. A referrer is subject to these rules if it has the minimum level of sales dollars (noted above) AND receives more than $10,000 in a calendar year of compensation for services as a referrer.

Beginning September 1, 2017 “referrers” must notify retailers that their sales may be subject to Rhode Island sales and use tax.

These three separate classifications are defined in the statute. The definitions are broad and very technical but it is very important for business to know which classification they fall into and what their new reporting requirements are as the penalties for non-compliance start at $10,000. If you have any questions on whether or not your business may be affected by these provisions please call us at 401-331-0500.

Notices mentioned above can be found at: www.tax.ri.gov/notice or http://www.tax.ri.gov/Non-collecting%20retailers/index.php.