Are you booking short-term rentals for 2026 now? Keep in mind that a new tax on short-term rentals of entire homes, cottages and condominium units will take effect, and the local hotel tax will increase.

If you rent part of a home, apartment, etc., the state hotel tax of 5% will remain the same.

Here are the taxes that affect short-term rentals of 30 or fewer consecutive days.

The Rhode Island Association of REALTORS® has contacted the RI Division of Taxation with a number of questions about the implementation of these taxes. An important question is

If a short-term rental is booked and/or prepaid in 2025 but it won’t be occupied until 2026, will the additional taxes apply?

While the Division of Taxation researches these and other issues, it would be wise to collect the 14% in taxes now for 2026 short-term rentals and refund any excess if the Division of Taxation determines that all of these will not apply.

If you have questions, please contact the Rhode Island Division of Taxation Taxpayer Experience Office:

Email:   [email protected]
Phone:  401.574.8983

For more details about these and other taxes, see the Division of Taxation’s summary of changes:

Summary of Legislative Changes 2025

REALTORS®:  for more information, please contact the RIAR Legal Department at [email protected].