Sales Tax Obligations of Purchasers in Rhode Island

April 13, 2006

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Rhode Island imposes various requirements on purchasers doing business in Rhode Island. We recommend that you go through the items below to help you with the most frequently asked questions concerning purchasers and sales and use tax issues.

Tax exemption certificates. An exemption certificate may be issued by a purchaser of a nontaxable item. The exemption certificate may be based on the type of transaction (such as a resale exemption) or on the item itself.

Resale exemptions. In Rhode Island sales for resale are not subject to sales and use tax. The burden of proving that a sale of tangible personal property is not a sale at retail is upon the seller unless the seller takes in good faith from you a certificate that states that the property is purchased for resale.

Resale exemption certificate. A resale exemption certificate must include the following information:

your name and signature as the purchaser
your address
the general character of the property sold by you in the regular course of business
the number of the seller's permit held by you

Blanket resale certificates. A blanket resale certificate must include the information noted above for the resale exemption, plus the certificate should be marked "Blanket Certificate." A blanket certificate describing the property is good until revoked in writing. However, the seller should periodically verify that you continue to hold a valid permit to make sales at retail. The seller may rely on a resale certificate over three years old, but at the risk of it being disallowed if the purchaser no longer holds a permit to make sales at retail.

Purchases from out-of-state vendors. In Rhode Island property brought into the state on which a sales or use tax has been paid in another state equal to or in excess of the Rhode Island tax is not subject to tax in Rhode Island.