Rhode Island Vehicle Sales Tax & Fees [+Calculator]
Buying a new or used car can be an exciting experience and a big accomplishment. But that purchase can come at a higher price than you may think.
On top of the purchase price of your car, there are always other fees including the state sales tax, registration and title fees, and even fees charged by the dealership.
If you’re budgeting for a new car, take a look at the Rhode Island vehicle sales taxes and fees to factor into the total price.
Table of Contents
- How Much Is the Car Sales Tax in Rhode Island?
- How to Calculate Sales Tax on a Car in Rhode Island
- Rhode Island Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which City Has the Highest Tax? Which City Has the Lowest?
- Car Sales Tax for Trade-Ins in Rhode Island
- Car Sales Tax on Private Sales in Rhode Island
- Tax on Rebates & Dealer Incentives
- Other Taxes & Fees in Rhode Island
- When Sales Tax Is Exempt in Rhode Island
- Rhode Island EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in Rhode Island?
The car sales tax at any dealership in Rhode Island is 7% of the purchase price minus any trade-ins (per the Rhode Island DMV site.)
For instance, if your new or used car costs $35,000, you can expect to pay $2,450 in state sales tax. This does not include trade-ins, rebates, or additional fees.
How to Calculate Sales Tax on a Car in Rhode Island
To calculate how much you need to expect to pay in state sales tax on your car, just use this simple formula.
First, take the purchase price for your vehicle. Deduct the value of any trade-ins or rebates you have (note that Rhode Island does not tax you on rebates or trade-ins).
Once you have that number, multiply it by 7% to get the cost of the state sales tax on your new vehicle.
Calculate Sales Tax in Rhode Island Example:
- Initial Car Price: $50,000
- Sales Tax Rate: 7%
- Trade-In Amount: $6,000
- Rebate/Incetive Amount: $1,000
Sales Tax = ($50,000 - $6,000 - $1,000) * .07
Sales Tax = $3,010
Rhode Island Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, you will have to pay the 7% state tax on used cars as well.
Which City Has the Highest Tax? Which City Has the Lowest?
Rhode Island is one of the few states that do not have any local or county tax; they have a flat statewide 7% rate for car purchases.
Therefore, there is no highest or lowest county in Rhode Island, you can expect to pay the same tax anywhere in the state.
Car Sales Tax for Trade-Ins in Rhode Island
There is no car sales tax charged for trade-ins in the state of Rhode Island.
For example, if you purchase a car that costs $30,000 and your trade-in is valued at $6,000, you will only pay the 7% sales tax on the $24,000 price tag.
Car Sales Tax on Private Sales in Rhode Island
The car sales tax on private sales in Rhode Island is a little bit different.
If the vehicle is 7 years old or less, sales tax is 7% of the NADA Clean Retail book value or sale price, whichever is greater.
If the vehicle is somewhere between 8 and 29 years old, sales tax is 7% of the sale price, provided the vehicle is not on the CPI list.
If the vehicle in the private sale is considered a CPI (or “car of personal interest”), the sales tax is 7% of the NADA Clean Retail book value and/or Black Book CPI or purchase price, whichever is greater.
Tax on Rebates & Dealer Incentives
There are no taxes on rebates or dealer incentives in the state of Rhode Island.
For example, if you are purchasing a car at $50,000 that offers a $5,000 rebate, you will only be taxed on the $45,000 that you actually pay for the car.
Other Taxes & Fees in Rhode Island
There are some other taxes and fees to take into account when purchasing that new-to-you car in the state of Rhode Island. These include the following categories:
Every state’s DMV has different fees associated with the purchase of a new car. Here are some charges you can expect from the Rhode Island DMV.
- Passenger Vehicle Registration: Based on vehicle weight (prorated) plus $2.50 plus $15 DOT charge per year
- Replacement of Registration Plate: $22.50 (one-way plate) $42.50 (two-way plate)
- Title Fee: $52.50
Dealership fees can include document fees, which is what the dealership charges you to cover things like legal documents and other paperwork.
Though there isn’t a regulation on this and dealerships can technically charge what they want, the average dealership fee in the state of Rhode Island is $220.
When Sales Tax Is Exempt in Rhode Island
Unfortunately, there aren’t many ways to get out of paying Rhode Island’s vehicle taxes.
There are a few reasons why a vehicle may be exempt from sales tax altogether including:
- If the car was gifted (with a signed letter of gift)
- If the car is leased (the tax will be included in your monthly payment)
Rhode Island EV Rebates & Incentives
At this time, Rhode Island has suspended all EV (electric vehicle) rebates and incentives due to a lack of funding.
However, you can still take advantage of the federal EV tax credit.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
Frequently Asked Questions
What is the sales tax on cars purchased in Rhode Island?
Sales tax on cars purchased in Rhode Island is 7% after rebates and trade-ins.
Do I have to pay sales tax on a used car in Rhode Island?
Yes, you still have to pay the 7% tax on all cars purchased in Rhode Island, including pre-owned or used cars.
Do I have to pay sales tax on a gifted car in Rhode Island?
No, you do not have to pay sales tax on a gifted car in Rhode Island, provided that you have filled out a signed letter of gift.
How much is registration in Rhode Island?
Passenger vehicle registration in Rhode Island is based on vehicle weight (prorated by date) plus $2.50 plus $15 DOT charge per year. The vehicle weight chart can be found on Rhode Island’s DMV website.
Does a trade-in reduce sales tax in Rhode Island?
Yes, a trade-in is subtracted from the total taxable amount of the price of the car.
How can I avoid paying sales tax in Rhode Island?
You can avoid paying a sales tax on a car in Rhode Island by being gifted the vehicle.