Rhode Island Sales Tax Exemption: Critical Deadline Alert for Nonprofits

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Key Takeaways

Rhode Island nonprofit sales tax exemption certificates now expire every four years, a change implemented in 2017 that continues to catch some organizations off guard.
Eligible nonprofits must renew their exemption by submitting required documentation and Form EXO-SUE to the Rhode Island Division of Taxation before the certificate expires.
Failure to renew on time may result in lost exemption status, unrecoverable sales tax charges and compliance issues with vendors.

By Kerri Rawcliffe, Partner and Lou Pastina, Director

The Rhode Island Division of Taxation (Division of Taxation) recently issued a statement reminding nonprofit organizations to review their sales tax exemption certificates – a requirement that has caught many off guard. Since 2017 legislation introduced a four-year renewal cycle (previously certificates did not expire), prompting the Division to issue this alert. Some are still under the impression that the exemption is still permanent like it used to be and has not changed to a 4 year renewal process. For eligible organizations, maintaining this exemption can deliver significant savings – but only if certificates are renewed on time.

Who Qualifies for the Exemption?

Rhode Island exempts certain purchases made by nonprofits that have received a Certificate of Exemption (Form ST-2). Organizations that typically qualify include:

501(c)(3) public charities
Religious, educational, and scientific institutions
Other exempt organizations as defined under R.I. Gen. Laws § 44-18-30(5)

What’s Covered and What’s Not

The exemption applies to tangible personal property and qualifying services purchased directly by the organization in relation to its tax-exempt mission, such as:

Office supplies, equipment, and technology
Utilities and communication services
Certain construction and repair services
Event expenses related to charitable programming

Important Note: This exemption does not apply to sales made by the nonprofit. Organizations still need to collect and remit sales tax on taxable goods and services they sell to others.

Why Timely Renewal Matters

Prior to 2017, exemption certificates in Rhode Island did not expire. Post 2017, legislation introduced a four-year expiration cycle. If the organization fails to renew on time, this can result in:

Sales tax being charged on major purchases or recurring services
Lost exemption status with vendors
Potential compliance issues
Unrecoverable tax payments

Renewing Process and Key Steps

To avoid disruption in your exemption status, the state advises organizations to follow these key steps:

Gather required documentation:
- RS determination letter confirming 501(c) status
- Articles of incorporation and bylaws

Complete RI Form EXO-SUE (2025):
- Titled “Sales & Use Exemption for an Exempt Organization”
- Available on the Division’s website: Sales Tax Exempt Organizations – RI Division of Taxation

Submit all materials by email or mail:
- Email: Audit@tax.ri.gov
- Mail:
  RI Division of Taxation
  Audit & Investigation Unit
  One Capitol Hill
  Providence, RI 02908

Be sure to file at least three weeks before expiration OR if already expired submit renewal immediately:
- Submitting early allows for processing time and avoids lapses in exemption

Always respond Promptly to Follow-Up Inquiries:
- The Division may request additional documentation to support your renewal
- Responding promptly to these matters will help move the process forward on a timely basis

Can You Recover Sales Tax Paid During a Lapse?

Generally, no. Rhode Island does not offer refunds for tax paid during a lapse in exemption status. A vendor may refund at their discretion, and the Division only authorizes refunds when tax was collected in error during a period of valid exemption

If your organization missed the deadline or needs help navigating the renewal process, we are here to assist. Please contact our Exempt Tax and Advisory Services Practice.