01-10-2026, 11:04 PM
New Year, New Taxes 
The Rhode Island Division of Taxation reminds taxpayers and tax professionals that changes enacted during the 2025 legislative session will impact short-term rentals. In Rhode Island, short-term rentals include all rentals of lodging where the rental period is 30 consecutive days or fewer. Two changes impacting such short-term rentals will go into effect January 1, 2026.
1. All short-term rentals, including hotels, in Rhode Island are subject to a 1% “local” hotel tax. Effective January 1, 2026, Rhode Island’s local hotel tax rate will increase from 1% to 2%.
2. In addition to the increase in the local hotel tax rate from 1% to 2%, a new whole home short-term rental tax on residential dwellings will go into effect on January 1, 2026.
Beginning January 1, 2026, a new 5% tax will apply to the short-term rental of a residential dwelling rented in its entirety.
The tax is calculated based on the total charge for a short-term rental of a residential dwelling rented in its entirety. Generally, rentals that will be subject to the tax are short-term rentals including houses, condos, mobile homes, and other residential dwellings, and will include vacation rentals and/or rentals offered through online hosting platforms.
Source: https://tax.ri.gov/sites/g/files/xkgbur5...entals.pdf
The Rhode Island Division of Taxation reminds taxpayers and tax professionals that changes enacted during the 2025 legislative session will impact short-term rentals. In Rhode Island, short-term rentals include all rentals of lodging where the rental period is 30 consecutive days or fewer. Two changes impacting such short-term rentals will go into effect January 1, 2026.
1. All short-term rentals, including hotels, in Rhode Island are subject to a 1% “local” hotel tax. Effective January 1, 2026, Rhode Island’s local hotel tax rate will increase from 1% to 2%.
2. In addition to the increase in the local hotel tax rate from 1% to 2%, a new whole home short-term rental tax on residential dwellings will go into effect on January 1, 2026.
Beginning January 1, 2026, a new 5% tax will apply to the short-term rental of a residential dwelling rented in its entirety.
The tax is calculated based on the total charge for a short-term rental of a residential dwelling rented in its entirety. Generally, rentals that will be subject to the tax are short-term rentals including houses, condos, mobile homes, and other residential dwellings, and will include vacation rentals and/or rentals offered through online hosting platforms.
Source: https://tax.ri.gov/sites/g/files/xkgbur5...entals.pdf