Taxes in Rhode Island

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Lauren Hamer
Sr. Editor

Lauren is a Certified Financial Education Instructor℠ (CFEI®) with more than a decade of experience covering senior-related issues, retirement planning, personal finance, and consumer protection. She is passionate about helping seniors and their families make informed decisions. Her work has been published on Credible, Angi, ConsumerAffairs, and more.
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Rhode Island - State

Like many New England states, property taxes in Rhode Island are high. But the state introduced a few tax reform laws that could benefit retirees in 2023 and thereafter. Below, we explain various Rhode Island state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.

For information regarding taxes in other states, see Retirement Taxes by State.

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Rhode Island Tax Rates

State Sales Tax7%
Avg State/Local Sales Tax7%
Gas Tax$0.38 per gallon
Diesel Tax$0.38 per gallon
Cigarette Tax$4.25 per pack
Income Tax5.99%
Effective Tax Rate:4.75%
Property Tax1.23%
Social Security TaxPartial
Medical/Dental Deduction:None
Federal Income Tax Deduction:None
Retirement TaxPartial
State Taxes in Rhode Island

Rhode Island State Taxes Explained

Rhode Island Sales Tax

7%. Groceries, some clothing, precious metal bullion, some burial-related items and prescription and over-the-counter drugs are exempt. The tax on clothing applies to each sale of apparel and footwear totaling more than $250.

Rhode Island Income Taxes

Top rate of 5.99% (on taxable income over $181,650).

Rhode Island Property Taxes

Rhode Island’s average effective property tax rate is 1.23%, and some rural communities also collect fire district taxes. The median-value Rhode Island home is $470,000 , which would incur $5,781 in taxes annually.

For tax years beginning on or after January 1, 2025, residents can exclude up to $25,000 of their federally taxable retirement income from pensions, annuities, and 401(k) plans from state taxable income, up from $20,000 in 2023. Also, taxpayers can subtract any military service pension benefits. Out-of-state government pensions are fully taxed.

Rhode Island Retirement Taxes

For tax years beginning on or after January 1, 2023, residents can exclude up to $20,000 of their federally taxable retirement income from pensions, annuities, and 401(k) plans from state taxable income, up from $15,000 in 2022. Also, taxpayers can subtract any military service pension benefits. Out-of-state government pensions are fully taxed.

Rhode Island Estate and Inheritance Taxes

Rhode Island’s estate tax rate is as high as 16% imposed on estate values over $1.8 million.

The gross value of an estate is determined by the combined total of cash, real estate, vehicles, certificates of deposit, investment accounts, life insurance proceeds, retirement accounts and personal property.

For further information, visit the Rhode Island Division of Taxation.