Update to the definition of OTP

The Rhode Island Division of Taxation reminds taxpayers and tax professionals of an upcoming change to the taxation of other tobacco products (OTP). Recent legislation has expanded the definition of products categorized as OTP. As of 12:01 a.m. on October 1, 2025, certain products that contain nicotine will be taxed as OTP, whether the nicotine is natural or artificial.*
 
The update to the definition of OTP will generally expand the range of products considered OTP. An example of such a product is nicotine pouches, which do not meet the definition of OTP in effect prior to 10/1/2025, but which is included in the definition of OTP on and after October 1, 2025. The tax rate for these products will be 80% of the wholesale cost of the product.

More information is available in Advisory 2025-19.

* “Other tobacco products” does not include any product that has been approved by the United States Food and Drug Administration for the sale of or use as a tobacco or nicotine cessation product.

Rhode Island Decouples from Recently Enacted Federal Legislation-H.R. 1

The Rhode Island Division of Taxation today provides guidance regarding the Rhode Island tax treatment of domestic research and experimental expenditures in light of the recent enactment of federal legislation, from which Rhode Island decoupled in its Fiscal Year 2026 Budget.

More information is available in Advisory 2025-18.

Quarterly Estimated Payments Due Date is September 15, 2025

The Rhode Island Division of Taxation reminds taxpayers and tax professionals that September 15, 2025 is this year’s due date for third quarter estimated tax filing and payment. Estimated tax applies to some personal income filers and many business entities.

More information is available in Advisory 2025-17.

Effective 1/1/26 - Changes to the taxation of short-term rentals

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.

More information is available in Advisory 2025-16.