Rhode Island Use Tax may apply when you purchase taxable goods or services for use, storage, or consumption in Rhode Island and Rhode Island sales tax was not collected at the time of purchase.
Pathway to this entry is:
Rhode Island State Return > Use Tax
What Is Rhode Island Use Tax?
Use tax is a tax on taxable purchases when Rhode Island sales tax was not charged by the seller.
Common situations where use tax may apply include:
- Online purchases where Rhode Island sales tax was not collected.
- Purchases from out-of-state retailers.
- Mail-order purchases.
- Purchases made while traveling outside Rhode Island and brought back into the state.
- Taxable services purchased without Rhode Island sales tax being charged.
If Rhode Island sales tax was paid on the purchase, use tax is generally not due.
How Do I Calculate My Rhode Island Use Tax?
The program provides two methods for calculating use tax:
Option 1 - Actual Use Tax Due
Select this option if you know the actual amount of taxable purchases made during the year on which Rhode Island sales tax was not paid.
Choose Actual Use Tax Due and enter the amount of taxable purchases subject to use tax.
This option is generally appropriate if you have maintained records of your purchases throughout the year.
Option 2 - Rhode Island Use Tax Lookup Table
Select this option if you do not know the exact amount of use tax due.
The Rhode Island Use Tax Lookup Table provides an estimated use tax amount based on your income and filing information.
This option may be easier for taxpayers who made only occasional untaxed purchases and do not have complete purchase records available.
Certification of Use Tax Amount
After completing the use tax section, you will be asked:
Do you certify that the use tax amount is accurate?
You must review the amount calculated or entered and certify that it is accurate before completing the return.
Which Option Should I Choose?
Use Actual Use Tax Due When:
- You tracked your purchases during the year.
- You know the exact amount of taxable purchases.
- You want to report the actual use tax owed.
Use the Lookup Table When:
- You do not know the exact amount of use tax due.
- You made routine consumer purchases and want to use Rhode Island's estimated calculation method.
- You do not have complete records of all taxable purchases.
What Purchases Are Commonly Subject to Use Tax?
Examples of purchases that may be subject to use tax include:
- Electronics purchased online.
- Furniture purchased from an out-of-state seller.
- Household goods purchased without Rhode Island sales tax.
- Taxable services purchased from businesses that did not collect Rhode Island sales tax.
- Items purchased while traveling and brought back for use in Rhode Island.
How Does Use Tax Affect My Return?
Rhode Island Use Tax may:
- Increase the amount owed with the return.
- Reduce a Rhode Island refund.
- Satisfy Rhode Island's requirement to pay tax on taxable purchases when sales tax was not collected by the seller.
Important Information
- Rhode Island Use Tax applies only to taxable purchases where Rhode Island sales tax was not paid.
- You may calculate use tax using either the Actual Use Tax Due method or the Rhode Island Use Tax Lookup Table.
- The Actual Use Tax Due method generally provides the most accurate calculation when complete purchase records are available.
- Large purchases may require reporting the actual use tax due, even if the lookup table is used for other purchases.
- You should retain receipts and records supporting any use tax reported on your return.
Additional Information
Review your online purchases, out-of-state purchases, and taxable services before completing the Use Tax section. If Rhode Island sales tax was not collected on taxable purchases, use tax may be due on those transactions.