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RI Self (Managed) Audit Program – for Use Tax

The Rhode Island Division of Taxation is mailing letters to 9,600 businesses and individuals stating that they have been selected and may qualify for a voluntary self-audit program.  This self-audit program provides a participant with the opportunity to perform an examination of their records (with supervision from the RI Division of Taxation) and report and pay any previously unreported Use tax liability, be subject to no penalties and have a reduced interest rate.  Also, while a normal sales and use tax examination covers six years, participants in the self-audit program only examine three years.

What is Use Tax?

shutterstock_295531268If you purchase tangible personal property without paying sales tax (i.e., the item was purchased online or in another state), Use tax is imposed for the use, consumption, or storage of the property in Rhode Island.  The Use tax rate in Rhode Island is 7%; however, if you paid 5% sales tax to another state with the initial purchase of the property you would only owe the 2% difference to Rhode Island.

Is the program for all taxpayers?

Currently, the program is only available to non-retailers (businesses and individuals).  As such, sales tax permit holders are excluded from the program.  You are also excluded from the program if you: (a) are currently under audit by the Tax Division, (b) have been audited by the Tax Division within the five-year period immediately preceding your application, (c) have an appeal pending with the Tax Division, or (d) have been in federal bankruptcy or state receivership proceedings.

Do I need to receive a letter from the Division of Taxation to participate?

No.  Most non-retailers are eligible to participate.  You do not need to receive a letter to participate.

Can I get more information about the program?

The “Self-Audits” section of the Rhode Island Division of Taxation’s website contains additional information, including FAQs and an application for the program.  Their website address is:

What should I do?

If you have any questions, please contact your Sansiveri professional at 401-331-0500.