Car Sales Tax in Rhode Island

The Rhode Island sales tax rate on cars is 7% across the state.
Written by Cassandra Hamilton
Edited by Pat Roache
The Rhode Island car sales tax is 7% on all vehicle purchases, new or used. This motor vehicle tax is applied to the purchase price or fair retail value of the car.
  • City and county governments in Rhode Island are not allowed to levy any local tax in addition to the state sales tax of 7%.
  • Gifted vehicles and out-of-state purchases are exempt from the Rhode Island sales tax.
  • The Rhode Island sales tax applies after trade-in credit, but before rebates or incentives.

The Rhode Island car tax: 7% statewide

Rhode Island’s statewide sales tax is 7%. It is one of the only states that doesn’t allow local governments to collect sales tax, so you’ll pay a 7% sales tax no matter what county or city you live in. 

Exemptions from Rhode Island car sales tax

There are a few circumstances when a vehicle is exempt from the Rhode Island car sales tax, including the following:
  • Gifting a vehicle to an immediate family member
  • Gifting a vehicle to a non-immediate family member
  • If you are not a resident of Rhode Island
  • If you have a disability
  • If you are a qualifying veteran
Check the
Rhode Island General Laws
for details on all exemptions.

Car trade-ins are not taxed in Rhode Island

Most dealerships allow you to
trade in your old vehicle
for credit toward a replacement. In the state of Rhode Island, you don’t have to pay sales tax on the trade-in value of the car you’re giving up.
For example: If you’re trading in an old
Honda Civic
for a
Toyota RAV4
, for example, you’ll get a $2,000 credit off the new car sticker price of $27,740. You’ll only owe the 7% sales tax on $25,740 of the purchase.
Rebates and incentives are still subject to vehicle tax, so keep that in mind when calculating the total cost of your new car. This means you will pay tax on the full amount of the vehicle before the incentives and discounts.

How to calculate sales tax on a car in Rhode Island

When buying from a dealership: 
  • Multiply 0.07 by the new vehicle’s purchase price after any trade-in credit is applied but before any rebates and incentives.
When buying from a private party: 

How to estimate Rhode Island tax, title, and registration fees

We said earlier that there are added expenses when purchasing a car in Rhode Island. We’ve talked about sales tax, but you’ll also have to pay title and registration fees, plus other fees for transferring plates and a documentation fee.
Here’s what some of those costs look like:
Expense
Average cost
Sales tax
7%
Vehicle registration fee
Min. $45 (based on vehicle weight)
Title fee
$52.50
Plate transfer
$52.50
Documentation fee
Max. $400
You can get more information on the registration and title fees on Rhode Island’s
DMV website
.
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FAQ

Regardless of whether you’re purchasing a new or used vehicle, the sales tax on vehicles in Rhode Island is 7%. However, for used cars purchased from a private party, the sales tax will be calculated based on either the purchase price or the NADA Clean Retail book value—whichever is greater.
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