H 8199Sales & Use

Taxation - Sales and Use Taxes - Liability and Computation

This bill creates a sales tax-free weekend on August 8 and 9, 2026, for most personal retail purchases.

Held for study

Population
Affected

Introduced Feb 27, 2026Committee House Finance

Plain-English Summary

This legislation establishes a "Sales Tax Holiday" in Rhode Island for the weekend of August 8 and August 9, 2026. During these two days, shoppers will not be charged the state sales tax on most retail items purchased for personal use. However, the tax exemption has specific limits: it does not apply to cars, boats, meals, tobacco, utilities, or any single item that costs more than $2,500. The bill also requires the Department of Revenue to calculate how much tax revenue was lost or gained due to changes in consumer spending during this period.

For younger readers

This bill sets up a special weekend on August 8 and 9, 2026, where people will not have to pay extra tax money to the state when they buy things at stores. It is like a discount for shoppers. This applies to things like clothes, toys, or school supplies, but it does not apply to really expensive things like cars or boats, nor does it apply to restaurant food. The government wants to see if this helps people shop more and helps families save money.

Who & Where It Applies

Impacted groups

RetailersConsumersLow-income familiesDepartment of RevenueStudents

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Provides temporary financial relief to low-income families by suspending the regressive sales tax, allowing them to purchase necessary goods without the additional tax burden.
Occurs during the typical back-to-school shopping season, helping parents afford clothing and school supplies for their children, which supports educational equity.
Stimulates local economic activity, potentially benefiting small business owners and retail workers by increasing consumer traffic and sales volume.
Reduces state revenue that could otherwise be used to fund essential public services, social safety nets, and infrastructure projects that benefit the community.
Disproportionately benefits wealthier consumers who have more disposable income to spend on higher-priced items (up to $2,500) during the holiday.
Fails to provide long-term structural tax reform, offering only a fleeting benefit rather than sustainable support for working-class families.

For Conservatives

Reduces the tax burden on citizens, allowing individuals to keep more of their hard-earned money rather than giving it to the state government.
Encourages consumer spending and drives revenue for private businesses, supporting the free market and local retailers.
Demonstrates a legislative willingness to limit government revenue collection, aligning with the principle of smaller government and lower taxation.
Creates an artificial distortion in the free market by manipulating shopping habits through government intervention rather than permanent tax cuts.
Imposes a regulatory and administrative burden on businesses, requiring them to adjust their accounting and point-of-sale systems for a mere two-day period.
Discriminates against certain industries by excluding sectors like restaurants and telecommunications, effectively having the government pick economic winners and losers.

Votes

Loading votes...

Full Bill Text

Changes to existing Rhode Island law · 30 additions

SECTION 1. Chapter 44-18 of the General Laws entitled "Sales and Use Taxes – Liability and Computation" is hereby amended by adding thereto the following section: 44-18-18.2. Annual Sales Tax Holiday.

(a) Notwithstanding any general or public law to the contrary, for the days of August 8, 2026 and August 9, 2026, sales tax shall not be imposed upon nonbusiness sales at retail of tangible personal property. For purposes of this section, tangible personal property shall not include telecommunications, tobacco products, gas, steam, oil, electricity, motor vehicles, motorboats, meals or a single item whose price exceeds two thousand five hundred dollars ($2,500).

(b) Notwithstanding any general or public law to the contrary, for the days of August 8, 2026 and August 9, 2026, a vendor shall not add to the sales price, or collect from a nonbusiness purchaser, an excise upon sales at retail of tangible personal property. The director of the department of revenue ("the director") shall not require a vendor to collect and pay taxes upon sales at retail of tangible personal property purchased on August 8, 2026 and August 9, 2026. An excise erroneously or improperly collected during the days of August 8, 2026 and August 9, 2026, shall be remitted to the department of revenue. This section shall not apply to the sale of telecommunications, tobacco products, gas, steam, oil, electricity, motor vehicles, motorboats, meals or a single item the price of which is in excess of two thousand five hundred dollars ($2,500).

(c) Reporting requirements imposed upon vendors of tangible personal property, by law or by regulation, including, but not limited to, the requirements for filing returns required pursuant to the general laws, shall remain in effect for sales for the days of August 8, 2026 and August 9, 2026.

(d) On or before December 31, 2026, the director of the department of revenue shall certify to the comptroller the amount of sales tax forgone, as well as new revenue raised from personal and corporate income taxes and other sources pursuant to this section. The director shall file a report with the house and senate finance committees detailing the distribution of revenues which would have been deposited in each fund without this section.

(e) The director shall issue instructions or forms, or promulgate rules or regulations, as necessary for the implementation of this section.

(f) Eligible sales at retail of tangible personal property under subsections (a) and (b) of this section are restricted to those transactions occurring on August 8, 2026 and August 9, 2026. Transfer of possession of or payment in full for the property shall occur on one of those days, and prior sales or layaway sales shall be ineligible.

SECTION 2. This act shall take effect upon passage.