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HB 5476

AN ACT RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND COMPUTATION

2025 Regular Session Introduced by Grace Diaz and 1 co-sponsor

HB 5476 ends the hotel tax exemption for whole-unit short-term rentals, making entire-home bookings subject to 5% state plus 1% local hotel tax starting Jan 1, 2026.

05/01/2025 Committee recommended measure be held for further study
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Bill Summary · HB 5476

Bill Summary — HB 5476 (2025)

Title: AN ACT RELATING TO TAXATION -- SALES AND USE TAXES -- LIABILITY AND COMPUTATION
Introduced: February 12, 2025 (House Finance)
Effective date (if enacted): January 1, 2026
Current status: 05/01/2025 — Committee recommended measure be held for further study

Purpose

HB 5476 would amend Rhode Island’s hotel tax statute (§ 44-18-36.1) to remove the existing exemption that excludes houses, condominiums, or other resident dwellings from the state hotel tax when they are rented in their entirety. The bill’s intent is to subject whole-unit short‑term rentals to the same hotel tax rules as hotels, travel packages, and room resellers.

Key provisions

  • Removes the exemption in § 44-18-36.1(a) for “a house, condominium, or other resident dwelling … rented in its entirety.” After enactment, those rentals would be subject to the hotel tax.
  • Leaves the hotel tax rates unchanged:
    • State hotel tax: 5% on total consideration charged for occupancy.
    • Local hotel tax: 1% (levied in addition to the state tax).
  • Clarifies that the hotel tax is in addition to any sales tax and continues to be administered and collected by the Division of Taxation under chapters 18 and 19 of Title 44.
  • Retains the special provision allowing the city of Newport to collect the subsection (a) tax from hotels located in the city, with existing reporting, collection, and lien authorities unchanged.
  • Effective date specified as January 1, 2026.

Who would be affected

  • Owners/operators of whole-unit short‑term rentals (e.g., single-family homes, condos, entire apartments listed on platforms such as Airbnb/VRBO) — they would be required to collect/remit the hotel tax.
  • Guests/occupants of those rentals — would pay the additional hotel tax (5% state + potentially 1% local).
  • Online travel agencies, resellers, and room resellers involved in booking whole-unit rentals may have additional collection and remittance responsibilities.
  • Municipalities and the Division of Taxation (administration, distribution, and enforcement).

Administrative and fiscal implications

  • Expands the hotel tax base; expected to increase state and local tax receipts (no revenue estimate included in the bill text).
  • Collection and reporting procedures remain with the Division of Taxation, except Newport retains collection/reporting authority for its jurisdiction as currently provided.
  • Compliance requirements and potential enforcement actions (penalties, liens) apply as under current hotel tax law.

Legislative status and timeline

  • Filed: 03/14/2025 (read first time 04/07/2025; referred to subcommittee/workforce and House Finance).
  • Public hearing schedule adjusted and later withdrawn; on 05/01/2025 the committee recommended the measure be held for further study.
  • If enacted as written, provisions would take effect January 1, 2026 (applying to stays beginning on or after that date).

Compiled from official sources — confirm details with the bill’s official record.

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