Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 70 - Sales and Use Tax
Part 48 - Taxicab, Limousine, Charter Bus, and Other Ground Passenger Transportation Services (280-RICR-20-70-48)
Section 280-RICR-20-70-48.6 - Taxicab, Limousine, Charter Bus, and Other Ground Passenger Transportation Services
Universal Citation: 280 RI Code of Rules 20 70 48.6
Current through September 18, 2024
A. For the period commencing October 1, 2012 sales and use tax at the rate as provided in R.I. Gen. Laws §§ 44-18-18 and 44-18-20 is imposed on gross receipts from the sale of taxicab, limousine, charter bus, and other ground passenger transportation services provided in this state.
1. Services that begin or end at a
destination outside of Rhode Island (interstate service) are not subject to
tax. If a round trip service starts in Rhode Island and proceeds to a
destination in another state, and later returns to Rhode Island, a single
charge for this round trip service would not be taxable since the trip was
interstate in nature. Also, if a transportation service is between two places
in Rhode Island but passes through another state, this is an interstate service
and therefore would not be taxable.
2. Receipts in the form of a mandatory
gratuity are subject to sales and use tax only to the extent they are part of
the amount billed to the customer and included in gross receipts. Voluntary
payment of a gratuity by the passenger is not included in gross receipts and
therefore not subject to sales and use tax.
3. Transportation services provided in
connection with funerals, or services provided in connection with ambulance or
emergency service transportation are not subject to sales and use
tax.
B. Purchases by exempt organizations: Sales and use tax does not apply to purchases of taxicab, limousine, charter bus, and other ground passenger transportation services by the United States Government or the State of Rhode Island or its agencies, any city or town within the State of Rhode Island, or any entity or institution otherwise exempt from sales and use tax. The exemption applies only when the cost is paid by the organization itself for its own purposes; and not to purchases by any of its members individually.
1. Example 1: A charter bus departs
Providence, R.I. for its destination of Boston, Mass., and later returns back
to Rhode Island. Since the charter bus goes outside of Rhode Island in
providing this service, the charter bus service fee would not be subject to
tax.
2. Example 2: A taxicab picks
up a customer in Warwick, R.I. and transports the customer to a hotel in
Providence, R.I. Since the service takes place in Rhode Island it is taxable.
If the customer were transported to a hotel located in Massachusetts, the
service would not be taxable as part of this service took place outside of
Rhode Island.
3. Example 3: A
charter bus departs Providence, R.I. for its destination of Newport, R.I. The
bus travels through a portion of Massachusetts while en route to Newport. Since
this charter bus leaves Rhode Island when providing this service, the charter
bus service fee would not be subject to tax.
4. Example 4: A group hires and prepays a
limousine service to pick them up in Providence, R.I., take them for dinner in
Newport, R.I., and then bring them to a destination(s) to be determined later
by the customers. Since at the time the limousine service was hired, the only
known destinations were in Rhode Island and the route taken was in Rhode
Island, the fees are subject to tax. Should that undetermined destination be
located outside of Rhode Island, the limousine company shall refund the sales
tax to the customer. The limousine company shall maintain the necessary
documentation to substantiate the transaction.
5. Example 5: A non-profit hospital that has
filed for and received tax-exempt status in Rhode Island enters into a contract
with a taxicab company to provide transportation services to patients. The
taxicab company picks up patients at their residence, transports them to the
hospital for treatment, and then drives the patients back to their residence.
The taxicab company invoices the hospital for this service and the invoice is
paid by the hospital. Since the tax exempt hospital is the customer, this
taxicab service is not subject to tax.
6. Example 6: A limousine company is hired
for a wedding ceremony which includes transporting the bride from her residence
in Providence to the wedding ceremony in Westport, Massachusetts and then to
the wedding reception in Newport, R.I. Since the wedding ceremony was a
destination point outside Rhode Island, this entire transportation service
would not be subject to tax.
7.
Example 7: A school bus company charters one of its buses to transport members
of a social club from Cranston, R.I. to a Pawtucket Red Sox game in Pawtucket,
R.I. Since the use of this charter is not for school transportation the gross
receipts of this charter bus service is subject to tax.
8. Example 8: Company A hires Company B to
shuttle Company A's employees from remote parking lots to Company A's office
building. The shuttle service operates daily on a regular schedule in both the
morning and afternoon. The fee charged by Company B for the shuttle service is
to transport Company A's employees to and from work and therefore is not
subject to tax.
9. Example 9: A
hotel in Warwick, R.I. hires a shuttle service to shuttle guests from the hotel
to the airport and to destinations in Providence, R.I. The shuttle service
operates daily on a regular schedule. The fee from the company providing the
shuttle service to the hotel is subject to tax.
10. Example 10 Company A hires Company B to
shuttle Company A's employees from a business meeting at a hotel in Rhode
Island to another location in Rhode Island (i.e.: airport, Company A office
location). Since the shuttle service is not to and from work, it is not
considered employee transportation to and from work, therefore the fee charged
by Company B to Company A for the shuttle service is subject to tax.
11. Example 11: A cruise ship transports
passengers from other states and countries to Newport, R.I. The cruise includes
a charter bus that picks up the passengers arriving in Newport and then
transports the passengers in a continuous route or journey to one or more Rhode
Island locations. The fee for the charter bus service is not subject to tax.
Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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