Hotel And Lodging Tax In Rhode Island 2026: TOT Rates By City

How Rhode Island's Hotel and Lodging Tax Works

Rhode Island's hotel tax is unusual in that the rate itself barely changes from one city to the next. Instead of letting each town set its own local rate the way most states do, Rhode Island collects a uniform statewide hotel tax and then redistributes the money by formula to the specific tourism region where the hotel sits.

Rhode Island General Laws section 44-18-36.1 sets a 5% state hotel tax and, layered on top of that, a local hotel tax that is currently rising from 1% to 2%, effective January 1, 2026, under the state's 2026 budget legislation. Combined with the state's 7% sales tax, which also applies to hotel charges, a guest renting a room paid a total of 13% through the end of 2025 and pays 14% starting in 2026. The local hotel tax revenue is distributed at least quarterly to the city or town where the hotel is located; the 5% state hotel tax is split by a statutory formula among that city or town, the regional tourism district, and the Rhode Island Commerce Corporation.

Coverage extends to hotels, motels, and short-term rentals; as of the 2026 change, whole-home short-term rentals, previously exempt from the 5% state hotel tax when rented in their entirety, are now also subject to the same combined lodging tax structure as traditional hotel rooms.

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Tax Rates and Extra Fees

Because Rhode Island's combined rate is essentially flat statewide, what actually varies city to city is not the percentage a guest pays but how that money gets divided once it's collected. Rhode Island groups cities and towns into regional tourism districts, and each district has its own statutory revenue split.

The formula itself is the real variation. In the Aquidneck Island and Block Island tourism districts, 45% of the 5% state hotel tax goes to the regional visitors bureau, Discover Newport or the Block Island Tourism Council, 25% goes to the city or town, 25% goes to the Rhode Island Commerce Corporation, and the remaining 5% goes to the Greater Providence-Warwick Convention and Visitors Bureau. Cities inside the statewide district, which does not have its own dedicated regional CVB, see a different split: 25% to the town, 5% to the Providence-Warwick CVB, and 70% to Rhode Island Commerce.

This distribution formula functions like the tourism marketing district assessments other states layer on as a separate charge, except Rhode Island builds the district funding directly into how the existing 5% state hotel tax gets divided rather than adding a visibly separate line item to the guest's bill.

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Collection and Remittance

The guest pays the combined tax at checkout, and the hotel operator is responsible for collecting and remitting it to the Rhode Island Division of Taxation. The local hotel tax portion is distributed to the city or town at least quarterly once the Division has collected it; hotels themselves generally file and remit on the same cadence as their state sales tax obligations.

Short-term rental platforms are affected differently than they were before 2026. Rhode Island's short-term rental tax notice clarifies that whole-home rentals booked through platforms like Airbnb or Vrbo, previously exempt from the state's 5% hotel tax, are now subject to the same combined lodging tax as hotel rooms, which changes what a platform needs to collect on a host's behalf starting with the 2026 tax year.

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Exemptions From Rhode Island's Hotel Tax

Rhode Island's long-stay exemption works differently from a simple day count. Tax applies to the first 30 consecutive days of a rental; anything beyond that is not subject to sales or hotel tax. But the exemption for those first 30 days depends on the paperwork in place from the start: if the occupant has a documented agreement covering a rental period of 12 months or more, the entire stay, including the first 30 days, is exempt. If the documented agreement covers less than 12 months, even if the guest ultimately stays well past 30 days, the first 30 consecutive days are still taxable.

Any break in occupancy resets the clock. If a guest checks out and back in, even briefly, Rhode Island treats that as a new and separate rental, and the 30-day taxable period starts over from the beginning.

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Common Mistakes Hotels Make With TOT Compliance

• Assuming the local hotel tax is still 1%. Rhode Island's local hotel tax rose from 1% to 2% effective January 1, 2026, bringing the statewide combined rate from 13% to 14%; a property still charging the old rate is under-collecting on every booking.
• Treating a 12-month lease and a month-to-month stay the same way. Only a documented agreement for 12 months or more exempts the first 30 days of a long stay; a shorter-term agreement still owes tax on those first 30 days even if the guest eventually stays much longer.
• Not resetting the exemption clock after a break in occupancy. A guest who checks out and back in, even for a short gap, starts a new 30-day taxable period under Rhode Island rules, and carrying forward credit from the prior stay is a compliance error.
• Assuming whole-home short-term rentals are still exempt. Whole-home rentals lost their exemption from the state's 5% hotel tax as part of the 2026 short-term rental tax changes, and treating them as exempt under the old rule now under-collects tax on every whole-home booking.
• Not accounting for the tourism district revenue split in reporting. Because the 5% state hotel tax is divided by formula among the town, the regional tourism district, and Rhode Island Commerce, a property's own books should reflect the tax collected at the combined rate, not attempt to separately track the district's share, which the Division of Taxation handles after collection.
• Not retraining front desk staff after the January 2026 rate change. A jump from 13% to 14% is small enough that a front desk team can miss it entirely if the property management system wasn't updated at the same time the new rate took effect.

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Where A PMS Fits Into TOT Compliance

None of this is about software untangling Rhode Island's tourism district formulas, since the Division of Taxation handles that redistribution after the fact. What a PMS can do is make sure a property is charging the current combined rate, the new 14% that took effect January 1, 2026, rather than the 13% it replaced, and that whole-home short-term rental bookings are taxed under the same rules as traditional hotel rooms now that the old whole-home exemption no longer applies. Configuring tax codes around the actual 30-day and 12-month rules, rather than a generic 30-day cutoff, also helps a property correctly tax a stay that started on a short-term agreement but ran long, and revenue reports by date range let an operator confirm the rate change was applied consistently across every booking made on or after the effective date.

Frequently Asked Questions

1. Does Rhode Island have a statewide hotel tax rate?

Yes, and unlike most states it is essentially the only rate. Rhode Island combines a 7% state sales tax, a 5% state hotel tax, and a 2% local hotel tax for a total of 14% as of January 1, 2026, and that combined rate applies almost uniformly across the state rather than varying city by city.

2. What is Rhode Island's hotel tax?

Rhode Island's hotel tax is a 5% state-level charge under Rhode Island General Laws section 44-18-36.1, plus a 2% local hotel tax that is distributed to the city or town where the hotel is located. Hotel tax, lodging tax, occupancy tax, and bed tax all describe this same charge.

3. What is Rhode Island's lodging tax?

Rhode Island's lodging tax is the same charge as its hotel tax: a combined 7% state hotel tax, and 2% local hotel tax on top of the 7% state sales tax that also applies to hotel and short-term rental charges.

4. How long does a guest need to stay in Rhode Island to be exempt from lodging tax?

The exemption depends on the lease term, not just the day count. A stay beyond 30 consecutive days is generally not taxed, but the first 30 days are only exempt if the guest has a documented agreement for 12 months or more; a shorter agreement means the first 30 days are taxed even if the guest stays much longer.

5. Does Rhode Island require hotels to disclose all fees upfront?

No Rhode Island-specific all-in pricing law for hotel fees has been identified. Federal Trade Commission rules require booking sites to display mandatory fees as part of the total price, but Rhode Island has not been confirmed to have its own separate statute on the subject.

6. Who is responsible for filing and remitting Rhode Island's lodging tax?

The hotel or short-term rental operator collects the combined tax from guests and remits it to the Rhode Island Division of Taxation, which then distributes the local hotel tax portion to the city or town at least quarterly and divides the state hotel tax among the town, the regional tourism district, and the Rhode Island Commerce Corporation by statutory formula.

7. Why doesn't Rhode Island's hotel tax rate vary much between cities the way it does in other states?

Rhode Island collects its hotel tax at a uniform statewide rate rather than letting individual cities set their own local rate. What varies by location is how the state's share gets redistributed afterward: Newport and Block Island's tourism districts receive 45% of the state hotel tax generated locally, while cities in the statewide district see a different split favoring the Rhode Island Commerce Corporation.