Federal Taxes - Income from proprietorships, partnerships, and other unincorporated businesses are subject to individual income taxes using IRS Form 1040 with appropriate schedules. This tax is levied on the Rhode Island income of both residents and non-residents. Real estate, motor vehicles, and commercial tangible personal property are taxed by each of Rhode Islands 39 municipalities. There are no other property taxes with the exception of fire district taxes in several rural communities. Intangible property is not taxed.
Boats are exempt from the local property tax and also from the state sales tax.
Workers compensation rates vary greatly from industry to industry and occupation to occupation according to the risk factor involved. Every employer who pays wages to one or more employees and who has not previously secured an identification number must file with the Internal Revenue Service for an Employer Identification Number. The application must be filed by those who pay wages on or before the seventh day after the date on which business begins. The Federal Employer Identification Number will also be needed for use on Rhode Island Tax Forms. This tax is imposed on employers and must not be deducted from employee's wages.