Section 280-RICR-20-70-6.6 - Taxation of Clothing and Essential ClothingA. For sales, leases or rentals prior to October 1, 2012, the sales in this state of articles of clothing, essential clothing, and footwear, intended to be worn or carried on or about the human body are exempt from the Rhode Island sales and use tax.B. Effective October 1, 2012, the exemption from Rhode Island sales and use tax will apply to the sales, leases or rentals in this state of essential clothing, including footwear, intended to be worn or carried on or about the human body with a sales price of two-hundred fifty dollars ($250.00) or less per item. 1. Example: A retailer sells five (5) shirts at sixty dollars ($60) each for a total of three-hundred dollars ($300.00). Because the sale of each item is less than two-hundred fifty dollars ($250.00), the sale of all five (5) shirts are exempt from the Rhode Island sales and use tax.C. Effective October 1, 2012, the portion of the sales price of clothing, including footwear, sold, leased or rented in this state greater than two-hundred fifty dollars ($250.00) per item is subject to the Rhode Island sales and use tax. 1. Example 1: A retailer of clothing sells a suit with a sales price of two-hundred seventy-five dollars ($275.00). The tax in this example is computed as follows: Suit | $275.00 |
Sales Tax: ($275.00 - 250.00) x 7% | $1.75 |
Total Invoice | $276.75 |
2. Example 2: A retailer of clothing sells a suit with a sales price of two-hundred twenty-five dollars ($225.00). Alterations are made to the suit to adjust the length of the sleeves and pants resulting an additional charge of sixty dollars ($60.00) bringing the total sales price to two hundred eighty-five dollars ($285.00). The tax in this example is computed as follows: Suit | $225.00 |
Alterations | $60.00 |
Subtotal | $285.00 |
Sales Tax: Suit and Alterations ($285.00 - 250.00) x 7% | $2.45 |
Total Invoice | $287.45 |
3. Example 3: Same facts as Example 2, and the retailer also charges twenty dollars (20.00) for delivery of the suit to the customer bringing the total sales price to three-hundred five dollars ($305.00). The tax in this example is computed as follows: Suit | $225.00 |
Alterations | $60.00 |
Delivery Charge | $20.00 |
Subtotal | $305.00 |
Sales Tax: Suit, alterations & delivery ($305.00 - 250.00) x 7% | $3.85 |
Total Invoice | $308.85 |
4. Example 4: A retailer of clothing sells two suits; one suit with a sales price of five-hundred dollars ($500.00) and a second suit with a sales price of two-hundred fifty dollars ($250.00) and the retailer also charges seventy-five dollars ($75.00) for delivery of the suits to the customer bringing the total sales price to eight-hundred twenty-five dollars ($825.00). The tax in this example is computed as follows: | Item 1 | Item 2 | Total |
Suit | $500.00 | $250.00 | $750.00 |
Delivery | $50.00 | $25.00 | $75.00** |
Subtotal | $550.00 | $275.00 | $825.00 |
Less Threshold | (250.00) | (250.00) | (500.00) |
Taxable Amount | $300.00 | $25.00 | $325.00 |
Rate | x .07 | x .07 | x .07 |
Tax | $21.00 | $1.75 | $22.75 |
5. Example 5: A customer purchases a suit with a sales price of three-hundred dollars ($300.00) and two (2) shirts with a sales price of fifty dollars ($50.00) each, and the retailer also charges twenty dollars ($20.00) for delivery of the merchandise to the customer bringing the total sales price to four-hundred twenty dollars ($420.00). The tax in this example is computed as follows: | Item 1 | Item 2 | Item 3 | Total |
Suit | $300.00 | | | $300.00 |
Shirts @ | $50 each | $50.00 | $50.00 | $100.00 |
Delivery Charge | $15.00 | $2.50 | $2.50 | $20.00** |
Subtotal | $315.00 | $52.50 | $52.50 | $420.00 |
Less Threshold | (250.00) | (250.00) | (250.00) | |
Taxable Amount | $65.00 | $0.00 | $0.00 | |
Rate | x .07 | x .07 | x .07 | |
Tax | $4.55 | $0.00 | $0.00 | $4.55 |
** Delivery Charge: If a shipment includes both taxable and exempt property, the seller should allocate the delivery charges by using a percentage based on the total sales prices of the taxable property compared to the total sales prices of all property in the shipment |
D. Articles of clothing that are normally sold as a single unit must continue to be sold in that manner; they cannot be separated and sold as individual items to qualify for the exemption. 1. Example: A suit normally sells for four-hundred dollars ($400.00). The retailer cannot sell the pants for two-hundred dollars ($200.00) and the suit coat for two-hundred dollars ($200.00) in order to qualify for the exemption. However, if the pants and the coat are normally sold as separate items with separate price tags, the exemption may apply to each item sold. 280 R.I. Code R. § 280-RICR-20-70-6.6