Short Term Rentals
Rhode Island Short Term Rental Regulations
May 28, 2025

Short Term Rentals
Rhode Island Airbnb Taxes 2025: The Complete Guide for Hosts
Starting an Airbnb in Rhode Island? You're entering one of New England's most popular vacation rental markets. From Newport's historic mansions to Block Island's coastal charm, the Ocean State attracts millions of visitors annually. However, success as a host depends on understanding Rhode Island's tax requirements for short-term rentals.
This guide breaks down everything you need to know about Rhode Island Airbnb taxes, compliance requirements, and local regulations to keep your hosting business profitable and legal.
Understanding Rhode Island's Short-Term Rental Tax Structure
Rhode Island operates a multi-tiered tax system for vacation rentals. Unlike some states with simple flat rates, the Ocean State combines state sales tax, lodging taxes, and municipal requirements that vary based on your property type and location.
What Qualifies as a Taxable Short-Term Rental
Rhode Island considers any rental of 30 days or less a short-term rental subject to lodging taxes. This includes:
Traditional Airbnb listings
VRBO properties
HomeAway rentals
Direct booking websites
Any accommodation rented for less than one month
Rhode Island State Tax Requirements for Airbnb Hosts
State Sales Tax: The Foundation
Every short-term rental in Rhode Island must collect 7% state sales tax on:
Base nightly rates
Cleaning fees
Pet fees
Additional service charges
Any other guest fees
This tax applies uniformly across all Rhode Island municipalities and property types.
Rhode Island Hotel Tax: Property-Specific Rates
The state imposes different hotel tax rates depending on how you rent your property:
Shared Property Rentals (Room in Your Home)
When guests rent a bedroom while you occupy other parts of the house:
6% state hotel tax applies
Total state tax burden: 13% (7% sales + 6% hotel)
Entire Property Rentals (Whole House/Apartment)
When guests have exclusive access to the entire property:
1% state hotel tax applies
Total state tax burden: 8% (7% sales + 1% hotel)
This significant rate difference makes whole-property rentals more tax-efficient for both hosts and guests.
How Tax Collection Works in Rhode Island
Platform-Based Collection (Airbnb, VRBO, etc.)
Rhode Island law requires hosting platforms to act as tax collectors. When you list on major platforms:
Automatic Collection: Airbnb, VRBO, and similar sites automatically add applicable taxes to guest reservations
Direct Remittance: Platforms send collected taxes directly to Rhode Island Department of Taxation
Host Relief: You don't need to handle tax collection or filing for platform-based bookings
Direct Booking Tax Obligations
If you accept bookings through your own website, social media, or referrals:
Register with Rhode Island Division of Taxation
Obtain a sales tax permit
Collect applicable taxes from guests
File monthly tax returns
Remit collected taxes by the 20th of each month
Failure to register for direct bookings can result in penalties and back-tax assessments.
Local Tax Requirements: City-by-City Breakdown
Standard Rhode Island Cities and Towns
Most Rhode Island municipalities rely solely on state tax collection. In these areas, your total tax rates are:
Room rentals: 13% (state taxes only)
Whole properties: 8% (state taxes only)
This applies to popular vacation rental destinations including:
Westerly and Watch Hill
Narragansett
Block Island
Providence
Warwick
Bristol
Newport: The High-Tax Exception
Newport, home to famous Gilded Age mansions and a thriving tourism industry, imposes additional municipal lodging taxes:
Newport Room Rental Taxes
7% state sales tax
6% state hotel tax
6% Newport rooms tax
Combined rate: 19%
Newport Whole-Property Taxes
7% state sales tax
1% state hotel tax
1% Newport local tax
Combined rate: 9%
Newport collects its local portions separately from state taxes, requiring hosts to understand dual compliance requirements.
Emerging Local Tax Trends
While Newport remains the primary exception, other Rhode Island tourist destinations are considering local lodging taxes. Stay informed about potential changes in:
South Kingstown (including Matunuck Beach)
Charlestown
Little Compton
Jamestown
Real-World Tax Calculations for Rhode Island Airbnb
Example 1: Warwick Whole-House Rental
Booking Details:
Property: 3-bedroom house near T.F. Green Airport
Rate: $180 per night
Stay: 4 nights
Cleaning fee: $75
Pet fee: $25
Tax Calculation:
Rental subtotal: ($180 × 4) + $75 + $25 = $820
State sales tax (7%): $820 × 0.07 = $57.40
State hotel tax (1%): $820 × 0.01 = $8.20
Total taxes: $65.60
Guest pays: $885.60
Example 2: Newport Mansion Room Rental
Booking Details:
Property: Historic mansion bedroom
Rate: $350 per night
Stay: 2 nights
No additional fees
Tax Calculation:
Rental subtotal: $350 × 2 = $700
State sales tax (7%): $700 × 0.07 = $49.00
State hotel tax (6%): $700 × 0.06 = $42.00
Newport rooms tax (6%): $700 × 0.06 = $42.00
Total taxes: $133.00
Guest pays: $833.00
Rhode Island Airbnb Compliance Checklist
For Platform-Only Hosts (Airbnb/VRBO)
✅ Verify your platform collects all applicable taxes
✅ Check guest receipts show correct tax amounts
✅ Keep records of all bookings and tax collections
✅ Monitor local tax law changes in your municipality
For Direct Booking Hosts
✅ Register with Rhode Island Division of Taxation
✅ Obtain sales tax permit
✅ Set up monthly filing schedule
✅ Implement tax collection system for guests
✅ Maintain detailed booking and payment records
✅ File returns by the 20th of each month
For All Rhode Island Hosts
✅ Understand your property's tax classification (room vs. whole property)
✅ Stay updated on local municipal requirements
✅ Consider consulting a tax professional for complex situations
✅ Keep documentation for potential audits
Common Rhode Island Airbnb Tax Mistakes to Avoid
Misclassifying Your Property Type
The difference between room (13%/19%) and whole-property (8%/9%) tax rates is substantial. Ensure accurate classification to avoid overcharging guests or underpaying taxes.
Ignoring Direct Booking Requirements
Many hosts incorrectly assume platform tax collection covers all scenarios. Direct bookings require separate registration and compliance.
Overlooking Local Requirements
While most Rhode Island cities don't impose additional taxes, failing to research your specific municipality can lead to compliance issues.
Poor Record Keeping
Whether using platforms or handling direct bookings, maintain detailed records of all transactions, taxes collected, and guest information.
Resources for Rhode Island Airbnb Hosts
Official Government Resources
Rhode Island Division of Taxation: tax.ri.gov
Business Registration: Apply for tax permits online
Municipal Offices: Contact your city/town clerk for local requirements
Professional Support
Consult a CPA familiar with Rhode Island lodging taxes
Consider vacation rental management companies for compliance assistance
Join local host groups for regulatory updates
The Bottom Line on Rhode Island Airbnb Taxes
Rhode Island's vacation rental tax system balances state revenue needs with local community requirements. While the multi-tiered structure may seem complex, most hosts find compliance manageable thanks to platform-based collection systems.
Key points to remember:
State taxes apply universally: 7% sales tax plus 1-6% hotel tax
Local taxes are rare: Only Newport currently imposes additional rates
Property type matters: Whole-property rentals enjoy lower tax rates
Platform collection simplifies compliance: Airbnb and VRBO handle most requirements automatically
Success as a Rhode Island Airbnb host depends on understanding these requirements, maintaining compliance, and staying informed about regulatory changes. The taxes you collect support the infrastructure and services that make Rhode Island an attractive destination, benefiting both your business and the broader tourism economy.
This guide provides general information about Rhode Island short-term rental taxes as of May 2025. Tax laws can change frequently. Always verify current requirements with the Rhode Island Division of Taxation and your local municipality before making business decisions.