Up until October 1, 2012, purchasing clothing in Rhode Island is exempt from sales tax. After October 1, 2012, a threshold will be implemented in Rhode Island for clothing purchases.
Per Rhode Island General Laws, “…the exemption will apply to the sales of articles of clothing, including footwear, intended to be worn or carried on or about the human body up to two hundred and fifty dollars ($250) of the sales price per item.”
Reasons For Implementing The Threshold
By instituting a threshold amount above which an item of clothing or footwear becomes taxable, the State will no longer be in compliance with the Streamlined Sales and Use Tax Agreement (SSUTA) causing the State to forego the receipt of sales tax collected by remote sellers that are signatories to the SSUTA. The enacted FY 2013 budget includes additional sales tax revenues of $10.7 million from the expansion of the sales tax to these items and a reduction of $1.4 million in sales tax revenue due to non-compliance with the SSUTA. The net impact of the approved sales tax base expansion by the General Assembly is an increase in revenue in FY 2013 of $9.4 million.
Items Affected By The Threshold
Clothing is defined to be “…all human wearing apparel suitable for general use.” Examples include:
- Baby receiving blankets
- Ear muffs
- Formal wear
- Garters and garter belts
- Wedding apparel
Not included as clothing: individually sold belt buckles and costume masks, patches, emblems, sewing equipment and supplies and sewing material.
- Clothing accessories or equipment such as briefcases, jewelry, sunglasses, watches and wigs.
- Protective equipment such as breathing masks, hard hats, helmets, protective gloves, safety glasses and tool belts.
- Sports or recreational equipment such as ballet shoes, baseball gloves, life preservers, shoulder pads, ski boots and wetsuits.
Rhode Island currently does not have a sales tax holiday for clothing or back-to-school items, but find out what states do….
Read more about caps and thresholds