Dissecting the Rhode Island Economic Nexus Sales Tax

Prior to the South Dakota v. Wayfair, Inc. decision, Rhode Island had already enacted legislation related to economic nexus and remote sellers. Effective August 17, 2017, remote sellers needed to comply with certain registration or notice requirements depending on whether the seller qualified as a “non-collecting retailer,” a “retail sale facilitator,” or a “referrer.” Depending on the status designation, sellers had to either register, collect and remit Rhode Island sales tax, or notify consumers that they may owe the tax. Following Wayfair, new legislation was put in place to better align with the outcome of the case. From July 1, 2019, remote sellers, marketplace facilitators, and referrers must register with the Rhode Island Division of Taxation and collect and remit Rhode Island sales tax. This new legislation removed the notice requirement option and made mandatory the registration option. We have highlighted the main points below.

Source: SOVOS

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