🎯 STRisker: Bulletin - Rhode Island
Rhode Island’s Short-Term Rental Market Faces New Taxes in 2026
Rhode Island Turns Up the Tax Dial on Short-Term Rentals
Big news for hosts and guests in Rhode Island: starting January 1, 2026, the tax bill for short-term rentals is about to get steeper. The state’s Division of Taxation has announced two major changes that will reshape the cost of renting everything from beachside cottages to city condos.
First up, the local hotel tax rate applied to short-term rentals is doubling. That means the tax is jumping from 1% to 2% for all STRs. While 1% might not sound like much, doubling it means both hosts and renters will feel a little more pinch when booking their next stay.
But the bigger change is the introduction of a brand-new 5% short-term rental tax. This applies specifically to entire residential dwellings — think full houses, condos, and mobile homes — when they’re rented out for 30 consecutive days or fewer. In other words, the classic vacation rental market will see a significant new cost layer.
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The state is framing these changes as part of its broader effort to keep the tax code fair and consistent across the lodging industry. Hotels and traditional inns have long faced heavier tax burdens, and officials say this move levels the playing field. For STR platforms like Airbnb and Vrbo, it means the price gap with hotels just got a little smaller.
What does this mean on the ground? For hosts, it could cut into earnings, especially for those renting out entire homes. Guests booking a weeklong Rhode Island getaway will notice their bills creeping higher. And for local governments, the increase represents a new revenue stream at a time when communities are scrambling to balance budgets and address housing concerns.
It’s also a sign of the times. Across the country, states and cities are tightening their grip on STRs, not just through zoning rules but through taxation. By 2026, Rhode Island renters will find that the “cheap alternative” to hotels comes with more strings attached — and more taxes due.
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