Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Rhode Island tax professional before filing.
Rhode Island · USA · Short-term rental taxes
Short-Term Rental Taxes in Rhode Island
Short term rental taxes in Rhode Island rose on January 1, 2026: whole-home stays now owe 7% sales tax, a new 5% whole home tax and a 2% local hotel tax, plus DBR registration and RI income tax.
The 30-Second Answer
- Short term rental tax in Rhode Island is 14% from 2026. Stays of 30 days or less owe 7% sales tax + 2% local hotel tax, plus either the 5% whole home short-term rental tax (entire homes, new from January 1, 2026) or the 5% statewide hotel tax (rooms).
- Register with the DBR before you list. Any short-term rental advertised on a hosting platform must be registered with the Department of Business Regulation, and the registration number and expiry date must appear on the listing. Fines run from $250 to $1,000 depending on how long you go unregistered.
- Airbnb and other hosting platforms collect and remit the sales, hotel and whole home taxes on bookings they take. For direct bookings you need a Rhode Island sales permit (renewed by February 1) and must file monthly by the 20th, including Form RI-8478.
- Rhode Island taxes the net rental profit at 3.75%, 4.75% or 5.99% (2026 brackets, top rate above $186,450). It is reported on the RI-1040 (or RI-1040NR for out-of-state owners), due April 15, 2027.
Deductions
What Rhode Island STR Hosts Can Deduct
Rhode Island income tax starts from federal AGI, so the rental expenses you claim on Schedule E or C reduce your RI-1040 as well.
The sales, hotel and whole home taxes guests pay are not your income or your expense — exclude them from both sides. Split mixed-use costs between rental and personal days (IRC §280A).
Filing Calendar
Key Dates & Filing Calendar
Rhode Island lodging taxes are filed monthly; income tax follows the April calendar.
The whole home tax began on January 1, 2026. If you book directly, check your 2026 invoices charge the 5% whole home tax and the 2% local hotel tax (up from 1%), not the old rates.
RI Division of Taxation — ADV 2025-16 and Whole Home Tax FAQs; The Hotel Industry and Rhode Island Tax (March 2026); R.I. Gen. Laws § 42-63.1-14
Federal & RI Income Tax Treatment
Passive Rental vs. Active Business: Which Applies to Your Rhode Island STR?
The Schedule E vs. Schedule C choice is made federally, and Rhode Island taxes the resulting federal AGI (with its own modifications) at 3.75%–5.99%.
Passive Rental — Schedule E
Standard for most Newport and South County hosts
- Report rents and expenses on Schedule E; the net figure flows through federal AGI to the RI-1040.
- No self-employment tax on net rental income.
- Passive losses are limited; the $25,000 allowance phases out between $100,000 and $150,000 of modified AGI.
- Depreciate the building over 27.5 years and keep any Rhode Island depreciation modifications on file.
No ceiling; RI brackets reach 5.99% above $186,450 of taxable income (2026)
Active Business — Schedule C
For hosts who provide hotel-style services
- Applies when the average stay is 7 days or less and you provide substantial services such as daily cleaning or meals.
- Net profit owes 15.3% self-employment tax, with the Social Security part capped at the $184,500 2026 wage base.
- Losses may offset other income if you materially participate.
- May qualify for the federal §199A QBI deduction; Rhode Island then taxes the resulting income at its own rates.
No ceiling; SE tax applies on top of federal and RI income tax
Depreciation
Depreciation for Rhode Island STR Properties
Depreciation recovers the cost of the building and furnishings over time and is often the deduction that keeps a Rhode Island rental's taxable profit low.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Exclude land value; the municipal assessment's land/building split is a common starting point. |
| Furniture, appliances & linens | 5 years (MACRS) | Federal 100% bonus depreciation is permanent for property acquired after Jan 19, 2025; check Rhode Island's decoupling guidance before copying it to your RI return. |
| Land improvements (decks, fencing, driveways) | 15 years (MACRS) | Items outside the building shell, including outdoor showers and patios. |
| Roof, windows & structural improvements | 27.5 years (straight-line) | Capitalise improvements; only true repairs are deducted in the year paid. |
Rhode Island has published guidance (ADV 2025-20) on which 2025 federal tax law changes it does not follow, so federal and RI depreciation may differ. Keep both schedules if your preparer makes a state modification.
On sale, federal unrecaptured §1250 gain is taxed at up to 25%. Rhode Island includes the gain in the income it taxes at 3.75%–5.99%, so track your RI basis alongside the federal one.
Sales, Hotel & Whole Home Taxes
Rhode Island Lodging Taxes on Short-Term Rentals (2026)
From January 1, 2026, every Rhode Island vacation rental of 30 days or less carries three percentage taxes, all administered by the Division of Taxation.
Rooms rented in a home pay the 5% statewide hotel tax. Entire homes, condos and other dwellings pay the new 5% whole home short-term rental tax instead. Either way, the 7% sales tax and 2% local hotel tax apply on top.
14% on stays of 30 days or less (7% + 5% + 2%)
RI Division of Taxation — ADV 2025-16 (Effective 1/1/26 changes), Whole Home Tax FAQs, Hotel Tax page; Airbnb Help Center article 2327
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb collects and remits 7% sales tax, 2% local hotel tax and the 5% whole home tax (entire homes) | Record rent net of tax; keep Airbnb's tax reports as proof the lodging tax was paid |
| Vrbo / Booking.com / other hosting platforms | Rhode Island law requires hosting platforms to register, collect and remit sales and hotel or whole home tax on the bookings they take | Check each platform's statements show all three taxes; if one is missing, ask the platform before assuming you owe it |
| Direct booking or rental agent | You (or your realtor, if the booking goes through them) collect and file monthly with the Division of Taxation | You need a sales permit, monthly returns by the 20th including the RI-8478, and a record of tax charged per stay |
Rentals of more than 30 consecutive days (or one calendar month) under a documented arrangement are exempt from the hotel and whole home taxes. Towns may have their own STR registration or licensing on top of the state registry — check with your city or town hall.
Platforms
Airbnb Tax in Rhode Island: What Platforms Collect
Rhode Island law requires hosting platforms to register, collect and remit the lodging taxes, and to report listings to the DBR. Income reporting to the IRS follows federal thresholds.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K above $20,000 and 200 transactions; 1099-MISC for other payments of $2,000+ | Yes — 7% sales tax, 2% local hotel tax, and 5% whole home tax (entire homes) or 5% statewide hotel tax | Earnings and tax reports in the host dashboard; 1099s by January 31 |
| Vrbo | Form 1099-K at the same federal thresholds | Required by Rhode Island's hosting platform rules for bookings it takes — confirm all three taxes appear on your payout statements | Annual payout summary in the owner dashboard |
| Booking.com | Varies by payment model | Same hosting platform obligation applies; check how tax is shown when the guest pays the property directly | Payout and invoice statements in the extranet |
| Direct / realtor bookings | No third-party reporting; you report all income | No platform — you or the realtor collect and remit monthly | Your own ledger and RI-8478 filings |
Listing on Several Platforms?
Every platform listing needs the same DBR registration number shown. Each platform remits tax only on its own bookings, and each 1099-K covers one platform — combine all channels, including direct stays, on your Schedule E or C and your RI-1040.
US Reporting — 1099-K, Not DAC7
DAC7 is an EU directive and does not apply in Rhode Island. US platforms report payouts on Form 1099-K when a host passes $20,000 and 200 transactions in the year. Separately, Rhode Island requires platforms to report listings and registration numbers to the DBR each quarter.
RI Division of Taxation — The Hotel Industry and Rhode Island Tax (March 2026); Airbnb Help Center article 2327; R.I. Gen. Laws § 42-63.1-14
Illustrative P&L: A Rhode Island Whole-Home Rental
Example: a whole-home rental earning $42,000 in rents (excluding the 14% taxes guests paid). For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
Three agencies can ask about a Rhode Island rental: the Division of Taxation, the DBR, and the IRS. Keep records that satisfy all three.
| Keep | How long | Why |
|---|---|---|
| Booking log by channel with rent and each tax charged | At least 3 years after filing | Shows which stays a platform remitted on and supports your monthly returns |
| Sales permit, monthly sales returns and RI-8478 filings | At least 3 years | Evidence for Division of Taxation reviews of direct bookings |
| DBR registration certificate and renewal dates | While the property is listed | Listings need a current number; unregistered listings face $250–$1,000 fines |
| Expense receipts and platform 1099s | At least 3 years (6 if income is understated by 25%+) | IRS audit window; the RI-1040 starts from the same federal figures |
| Purchase documents and depreciation schedules | Until 3 years after you sell | Needed to calculate basis and depreciation recapture on sale |
Rhode Island receives quarterly listing data from platforms, including registration numbers and occupancy. Make sure your own records match what the platforms report.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Educational content only. Rates and rules checked against the RI Division of Taxation, DBR, the RI General Laws and Airbnb's help pages in September 2026. Confirm current requirements before filing.
- RI Division of Taxation — ADV 2025-16: Changes to the taxation of short-term rentals — 5% whole home tax and 2% local hotel tax from Jan 1, 2026. https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-08/ADV_2025_16_taxation_of_short-term_rentals.pdf
- RI Division of Taxation — Whole Home Short-term Rental Tax FAQs — Scope, collection, BAR registration, monthly RI-8478 filing, 30-day exemption. https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-12/FAQs%20Whole%20Home%20Tax%20Final.pdf
- RI Division of Taxation — The Hotel Industry and Rhode Island Tax (March 2026) — Hosting platform obligations, sales permit renewal by Feb 1, 20th-of-month returns. https://tax.ri.gov/sites/g/files/xkgbur541/files/2026-03/The%20Hotel%20Industry%20and%20Rhode%20Island%20Tax%20-%20March%202026.pdf
- RI Department of Business Regulation — Short-Term Rentals — Registration of rentals listed on hosting platforms. https://dbr.ri.gov/real-estate-and-commercial-licensing/short-term-rentals
- R.I. Gen. Laws § 42-63.1-14 — Registration requirement, $250/$500/$1,000 fines, registration number on listings, platform reporting. https://webserver.rilegislature.gov/Statutes/TITLE42/42-63.1/42-63.1-14_42-63.1-14.htm
- RI Division of Taxation — ADV 2025-22: 2026 inflation adjustments — 2026 income tax brackets (3.75% / 4.75% / 5.99%) and standard deductions. https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-11/ADV_2025_22_Inflation_Adjustments.pdf
- RI Division of Taxation — ADV 2025-20: H.R. 1 decoupling guidance — Federal 2025 tax law provisions Rhode Island does not follow. https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-10/ADV_2025_20_H.R._1_RI-Decoupling-Guidance.pdf
- Airbnb Help Center — Occupancy tax in Rhode Island — Taxes Airbnb collects and remits in Rhode Island. https://www.airbnb.com/help/article/2327
Questions
Frequently Asked Questions — Rhode Island STR Taxes
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