At a glance
- Corporate tax
- 7%; $400 minimum
- Tax on wages
- Graduated
- Sales tax
- 7%
- Economic nexus
- $100,000 or 200 transactions
- Minimum wage
- $16.00/hr
- UI wage base
- $30,800
- New-employer UI rate
- 1.21% (incl. 0.21% JDA)
- Paid leave program
- TDI/TCI 1.1% of first $100,000
- Annual report
- $50, Feb 1 – May 1
2026 figures, each explained with its source on the area’s page. On top of the federal baseline.
Setup, in order
Register the corporation
Before doing business in Rhode IslandApply to the Department of State for a certificate of authority ($150).
Open tax accounts
Before the first payroll or taxable saleRegister with the Division of Taxation for withholding, and for a sales permit if you have nexus or a Rhode Island employee.
Register for UI and TDI
Before the first payrollRegister with the Department of Labor and Training for unemployment insurance and TDI/TCI; withhold 1.1% of wages for TDI/TCI.
Report new hires
Promptly after hireReport each new employee to the state’s new-hire registry.
Insurance, paydays and leave
Before the first hireCarry workers’ compensation insurance, set a regular payday within nine days of the end of each pay period, and adopt a sick and safe leave policy.
Watch the nexus test
Each January, on the prior yearTrack Rhode Island sales and transactions each calendar year against the $100,000 / 200 test.
The six areas
- AccountingAccounting and state tax in Rhode IslandRhode Island taxes corporations at 7% of income apportioned by receipts, with a $400 minimum and mandatory combined reporting. NOLs last only five years, and § 174A is not followed.Corporate tax rate7%
- ReceivablesReceivables and sales tax in Rhode IslandRhode Island has taxed SaaS at 7% since October 2018, with no local rates. Remote sellers must comply once they reach $100,000 or 200 transactions in the prior calendar year.Sales tax rate7%
- PayablesPayables and contractors in Rhode IslandFrom tax year 2025, Rhode Island requires every 1099 over $100 to be filed with the Division of Taxation, withholding or not. SaaS bought from vendors that don’t collect owes 7% use tax.State 1099 filingEvery 1099 over $100
- PayrollPayroll taxes and employer rules in Rhode IslandRhode Island payroll runs through the Division of Taxation and DLT: a $30,800 UI wage base at 1.21% for new employers, and TDI/TCI paid by employees at 1.1% of the first $100,000.SUI wage base$30,800
- ComplianceCompliance and filings in Rhode IslandRhode Island charges $150 to register and $50 for an annual report filed February 1 to May 1. The RI-1120C is due April 15, and unclaimed property before November 1.Certificate of authority$150
- AdvisoryAdvisory: credits and decisions in Rhode IslandRhode Island’s research credit runs 22.5% then 16.9%, now with a 15-year carryover, but NOLs expire after five years. The two clocks are what to model.Research credit22.5% / 16.9%
Who you register with
- RI Division of TaxationBusiness corporation tax, sales and use tax, withholding, 1099 filing
- RI Department of Labor and Training (DLT)Unemployment insurance, TDI/TCI, wage-and-hour
- RI Department of State, Business ServicesCertificate of authority and annual reports
- RI Office of the General Treasurer, Unclaimed PropertyUnclaimed property holder reports
Hiring across the border
An employee who lives in one state and works in another is the most common way a startup ends up registered in two. These are Rhode Island’s neighbors.
Common questions
How long do Rhode Island NOLs last?
Five years. Rhode Island allows the federal net operating loss deduction, adjusted for state modifications, but only as a carryforward to the five succeeding taxable years, with no carryback. A startup that loses money for six years before turning a profit loses the oldest year’s losses for Rhode Island purposes.
Is SaaS taxable in Rhode Island?
Yes. The Division of Taxation has applied the 7% sales and use tax to vendor-hosted prewritten software, sometimes called SaaS, since October 1, 2018, and later rulings say IaaS, PaaS and SaaS are taxable whenever there is a charge to a Rhode Island customer, whether access is permanent or temporary.
Do we file 1099-NECs with Rhode Island?
Yes, from tax year 2025. The Division of Taxation now requires Form 1099 for all payments of $100 or more, citing R.I. Gen. Laws § 44-30-58(c), regardless of Rhode Island withholding. That covers 1099-NEC, 1099-MISC, 1099-INT and the rest. Before 2025 it only wanted forms showing Rhode Island withholding.
Who pays for Rhode Island TDI?
Your employees do, through payroll. Temporary Disability Insurance and Temporary Caregiver Insurance are funded entirely by employees: 1.1% of the first $100,000 of wages in 2026, a maximum of $1,100. The employer withholds and remits it with its quarterly DLT filings; there is no employer share.
When is the Rhode Island annual report due?
Between February 1 and May 1 each year, $50 for a foreign business corporation. A report more than 30 days late carries a $25 penalty.
Can a pre-profit startup use the Rhode Island research credit?
Only against future tax. The credit can’t reduce a year’s tax by more than 50% or below the $400 minimum, and unused credit carries over. From tax years beginning in 2026 the carryover is 15 years, up from seven, which makes the credit worth more to a company that won’t be profitable soon.
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- RI Division of Taxation — 2025 business corporation tax general instructions
- RI Division of Taxation — 2024 Form RI-1120C instructions
- RI Division of Taxation — Corporate tax filing requirements
- RI Division of Taxation — Advisory ADV 2018-38, vendor-hosted prewritten software
- RI Division of Taxation — Declaratory Ruling 2023-01
- R.I. Gen. Laws § 44-18.2-3 — Non-collecting retailers
- RI Division of Taxation — ADV 2026-05, 1099 filing updates
- RI Division of Taxation — Withholding tax
- RI Department of Labor and Training — 2026 UI and TDI quick reference
- RI Department of Labor and Training — 2026 tax rates for UI and TDI
- R.I. Gen. Laws § 28-57-5 — Accrual of paid sick and safe leave
- R.I. Gen. Laws § 28-14-2 — Regular paydays
- R.I. Gen. Laws § 28-14-4 — Payment on separation
- R.I. Gen. Laws § 44-32-3 — Credit for qualified research expenses
- R.I. Gen. Laws § 7-1.2-1602 — Foreign corporation fees
- RI Department of State — 2025 foreign business corporation annual report form
- R.I. Gen. Laws § 33-21.1-17 — Unclaimed property reports
- IRS Publication 1220 — Combined Federal/State Filing participating states
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.