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SB 2684

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

2026 Regular Session Introduced by Jake Bissaillon and 5 co-sponsors

Expands RI sales tax to more services (transport, room resellers, travel packages) and Requires permits, tax collection on these and clarifies bundled travel taxation.

05/07/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2684

Summary of SB 2684 (Rhode Island, 2026) – Taxation, Sales and Use Taxes – Liability and Computation

Main purpose and intent

SB 2684 is an act to modify Rhode Island’s sales and use tax framework, with a focus on expanding the list of services taxed, clarifying who must collect and remit the tax, and updating exemptions and definitions. The bill updates sections 44-18-7.3 and 44-18-30 to define new service categories subject to tax, outlines how room resellers and travel packages are treated for tax purposes, and reiterates various exemptions. A notable effect is the explicit inclusion of certain transportation-related services and room-reseller arrangements in the tax net, while preserving existing exemptions.

Key provisions and changes

  • Expanded definition of “Services” (44-18-7.3):

    • Reiterates that services are activities performed for a fee for a third party in Rhode Island.
    • Adds and enumerates specific services to be treated as taxable services, including:
    • Taxicab and limousine services (dispatchers and limousines).
    • Other road transportation services (charter bus, transportation network companies , and other ground passenger transportation).
    • Pet care services (excluding veterinary and testing labs).
    • Room resellers/resellers involved in booking hotel occupancy (see below).
    • Travel packages (room plus other travel components bundled for a single price).
    • Investigation/guard/armored car services.
    • Parking services (defined with a time-based threshold).
    • Requires these service providers to obtain a Rhode Island sales tax permit, register, and collect/remit tax.

  • Room reseller and travel package specifics (44-18-7.3(c)-(d) and (b)(4)):

    • Room resellers or resellers that act as intermediaries in hotel bookings must collect and remit sales/use tax and hotel tax on amounts paid by occupants, with taxes applied to the occupant’s total charges after accounting for amounts paid to the hotel by the reseller.
    • Travel packages (room bundled with other travel components) are taxed on the single combined amount unless separately stated on the invoice, in which case tax applies to the separately stated portion only if its value is deemed reasonable by the tax administrator.
    • Rules governing how the value of bundled travel components is determined are provided (based on books and records).

  • Permitting and compliance:

    • Hotels and room resellers must operate under permits issued by the tax administrator.

  • Exemption and tax base clarifications (44-18-30):

    • Maintains existing exemptions (e.g., newspapers, food, drugs, medical devices, clothing, etc.) but lists many nuanced exemptions, including for certain equipment, fuel, and specific sectors (e.g., government contracts, non-profit institutions, educational institutions, etc.).
    • Retains special provisions for motor vehicles sold to nonresidents, fishing vessels, and various agricultural, manufacturing, and environmental exemptions, with detailed criteria.

  • Broad scope of taxable and exempt items:

    • The bill includes specific NAICS codes and defines many categories to ensure clarity in what constitutes a taxable service versus an exempt item.
    • Expands the scope of services taxed, particularly in transportation and lodging-related contexts.

Who would be affected

  • Taxpayers and businesses:

    • Taxicab, limousine, charter, TNCs, and other transportation providers.
    • Room resellers and hotels (and entities facilitating hotel bookings) that collect lodging taxes.
    • Sellers offering bundled travel packages, including hotels and ancillary services.
    • Other service-based industries listed as taxable (e.g., certain pet care services, investigation/guard services, parking operators).

  • Consumers:

    • Patrons paying for the newly categorized taxable services, including parking charges for one hour or less (which would now be taxed under the bill’s expansion).

  • Tax administration:

    • Rhode Island Division of Taxation, responsible for permits, registration, and enforcement, as well as promulgation of rules and regulations under chapter 35 of title 42.

Procedural/timeline highlights

  • Effective date: The act would take effect upon passage.
  • Legislative process: Introduced February 27, 2026; referred to Senate Finance; scheduled for hearing/consideration in May 2026.
  • Regulatory guidance: The tax administrator is authorized to promulgate necessary rules to implement the provisions.

Notes

  • The accompanying explanation indicates the act’s specific intended exemption: one-hour-or-less parking space charges would be exempt from sales tax if enacted, aligning with the policy goal stated in the explanation, though the main body focuses on broader service taxation and room resellers.

Overall, SB 2684 modernizes and expands Rhode Island’s sales tax base on services, clarifies complex room-travel packaging taxation, and strengthens compliance requirements for affected businesses, while preserving numerous existing exemptions.

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

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