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

2026 Regular Session Introduced by Karen Alzate and 9 co-sponsors

HB 8197 creates an immediate sales and use tax exemption in Rhode Island for new or used bicycles and bicycle parts.

04/14/2026 Committee recommended measure be held for further study

Summary of HB 8197 (Rhode Island, 2026) – AN ACT RELATING TO TAXATION — SALES AND USE TAXES — LIABILITY AND COMPUTATION

Date Introduced: February 27, 2026
Committee: House Finance
Sponsors: Handy, Chippendale, Cortvriend, Boylan, Cotter, Alzate, McGaw, Tanzi, McNamara, Place (with co-sponsor Alzate)

Purpose and Intent
- The bill operates within Rhode Island’s sales and use tax framework to amend Section 44-18-30. Its stated explanation at the end indicates a primary policy goal: to exempt new or used bicycles and bicycle parts from Rhode Island sales and use tax, with the exemption taking effect upon passage.

Key Provisions and Changes
- Amendment to 44-18-30: The bill adds an exclusion from the sales and use tax for:
- New or used bicycles and bicycle parts.
- Other existing exemptions in the statute remain in place (the bill reaffirms the set of numerous exemptions already listed in 44-18-30, but the actionable new provision is the bicycle exemption).
- Effective Date: The act takes effect upon passage (immediate effect once enacted).

Who/What Would Be Affected
- Individuals and businesses purchasing new or used bicycles or bicycle parts in Rhode Island would be exempt from the state’s sales and use tax.
- The exemption would apply to both in-state transactions and, depending on implementation, potentially to out-of-state purchases delivered into the state, subject to standard tax administration rules.
- Bicycle manufacturers, retailers, and distributors could see changes in pricing, invoicing, and exemption documentation processes to reflect the new tax relief.

Procedural and Timeline Considerations
- Status: As of the action history, the bill was referred to House Finance and later recommended to be held for further study (April 14, 2026). This indicates it was not advanced to a full vote at that time and may undergo further committee review.
- Implementation: The act provides that the exemption “shall take effect upon passage,” meaning once enacted, the exemption would be in force without a delayed phase-in or additional regulatory rulemaking, unless other sections of the code require separate guidance.

Context and Notes
- The bill text is comprehensive in listing many exemptions and specifics for other categories (e.g., newspapers, school meals, medical equipment, etc.). The notable addition is the explicit exemption for bicycles and bicycle parts.
- The measure does not modify tax rates or the base tax structure beyond creating this new exemption.

Bottom Line
- HB 8197 adds a targeted tax exemption for bicycles and bicycle parts, effective immediately upon enactment. If enacted, Rhode Island would not collect sales or use tax on bicycle purchases and related parts, aligning with broader policies encouraging cycling. The bill’s progress stalled in committee as of the latest activity, indicating potential further considerations before any final passage.