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HB 8390

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

2026 Regular Session Introduced by Terri Cortvriend and 1 co-sponsor

Expands Rhode Island sales tax to include certain transportation and room-occupancy services, while preserving broad exemptions and adding room-reseller permit rules.

05/07/2026 Committee recommended measure be held for further study
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Bill Summary · HB 8390

HB 8390 (Rhode Island, 2026 Session)
AN ACT RELATING TO TAXATION — SALES AND USE TAXES — LIABILITY AND COMPUTATION

Purpose and overall intent
- The bill amends Rhode Island’s sales and use tax law (Chapter 44-18) to update definitions of services subject to tax, clarify how certain arrangements are taxed, and specify exemptions. It also adds new or expanded exemptions for a wide range of goods and activities. The act takes effect upon passage.

Key provisions and changes

1) Expands the definition and scope of taxable services
- Section 44-18-7.3 expands the list of services considered taxable when performed in Rhode Island. It includes:
- Taxicab and limousine services (dispatched taxi services and limousines).
- Other road transportation services (charter bus service, transportation network companies or TNCs, and other ground passenger transportation).
- Pet care services (excluding veterinary and testing laboratories).
- Room resellers (and travel packages) related to hotel occupancy, with detailed rules on:
- Registration, collection, remittance of sales and use taxes, and hotel taxes.
- How taxes are computed when a room reseller acts as the intermediary for room occupancy.
- Travel packages treated as a single rental/fee for room occupancy, with rules for separately stated portions.
- Investigation, guard, and armored car services.
- Parking services (defined with a specific scope, excluding Middletown municipal beach parking).

2) Comprehensive exemption and special-tax rules maintained or clarified
- 44-18-30 lists numerous exemptions from sales and use taxes. The bill preserves a broad set of exemptions and may influence how they interact with the new service definitions. Notable exemptions (unchanged in structure) include:
- Sales beyond constitutional power, newspapers, school meals, various types of containers, charitable/educational/religious organizations, gasoline, manufacturing purposes, state and political subdivisions, food and food ingredients (with precise limitations on certain items), medicines and medical equipment, prosthetic devices, burial-related items, motor vehicles to nonresidents under certain conditions, and many other specific categories.
- Specific exemptions for: batteries, clothing and footwear (with a staged cap and federal provisions for remote sellers), water for domestic use, textbooks, alcohol, seeds/plants used to grow food, feminine hygiene products, breast pump supplies, renewable energy products, and many specialized equipment and industry-specific exemptions.
- The act provides rules for:
- Nonresident motor vehicle and non-motorized recreational vehicle sales to preserve interstate tax fairness (including tracking records and out-of-state registrations).
- Tax treatment of travel packages and room occupancy transactions to ensure taxes are collected properly by room resellers and hotels.

3) Recordkeeping, permits, and administration
- The bill requires room resellers (and hotels) to obtain permits and to collect and remit taxes as applicable. It also mandates that the tax administrator can promulgate regulations to administer these provisions.

4) Effective date
- The act takes effect upon passage (immediate applicability).

Who is affected

  • Businesses providing taxable services in Rhode Island, including:
    • Transportation providers (taxi, limousine, charter, TNCs, etc.).
    • Room resellers and operators engaged in selling or packaging hotel room occupancy and travel packages.
    • Pet care service providers (excluding veterinary labs).
    • Parking facilities and related operators.
    • Hotels and other lodging operators (in relation to the room reseller framework and tax remittance).
  • Retailers and manufacturers benefiting from existing exemptions (food, medicines, clothing, agricultural inputs, etc.), subject to the specific limits and conditions described in 44-18-30.
  • Consumers purchasing taxable services and goods, including parking, transportation services, and room occupancy when taxed under the revised framework.

Procedural and timeline considerations

  • Introduction: April 1, 2026.
  • Referred to House Finance, with a scheduled hearing/consideration on May 7, 2026.
  • Immediate effective date upon passage (no phase-in period specified).

Notes for readers
- The bill’s most notable operational shift is expanding the definition of taxable services to include certain transportation and room-occupancy-related activities, and clarifying the tax treatment of room resellers and travel packages.
- It preserves and details a broad exemptions framework, including recent and long-standing exemptions, with specific thresholds and conditions (e.g., clothing exemptions tied to remote-seller collection requirements, renewable energy equipment exemptions, and farm-related exemptions).
- The bill emphasizes permit requirements and oversight by the Rhode Island Division of Taxation for room resellers and related lodging activities.

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

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