Newport, RI Short-Term Rental Rules: Registration & 13% Tax

Newport, Rhode Island enacted its current STR ordinance in 2020 in response to a tourism-driven supply boom. The city's regulatory posture is moderate — it allows non-owner-occupied STRs but requires registration, inspection, and adherence to occupancy and parking rules. The 13% combined Rhode Island lodging tax is among the highest state-level rates in the Northeast, but Newport's ADRs (often $400–$800/night for restored colonial homes near the harbor) absorb the burden.

Licensing & Registration

Operators must obtain an annual Short-Term Rental Permit from Newport's Zoning Office: $200 fee + life-safety inspection (smoke/CO detectors, egress, fire extinguishers). Registration is location-dependent. R-10 (lowest-density residential) zones require a minimum 7-night stay. Higher-density zones permit shorter stays. Parking requirement: one off-street space per bedroom rented. Owner-occupancy is not required, but the city has discussed adding it in future ordinances.

Lodging & Occupancy Taxes

Rhode Island state sales tax 7% applies to lodging. State hotel tax 6% applies to stays under 30 days. Combined: 13%. Newport adds no separate local lodging tax. Airbnb and Vrbo collect both state taxes statewide. Stays of 30+ nights are exempt from the 6% hotel portion (sales tax may still apply depending on lease structure).

Penalties & Enforcement

Operating without a permit: $500 first offense, $1,000 second, $1,500 third. The city actively cross-references Airbnb/Vrbo listings against the permit database. Bristol County (where Newport sits) has additional noise and parking violation fines that compound STR-related complaints.

Recent Changes

2024 ordinance amendments tightened the 7-night minimum in R-10 zones and added an annual cap on permits in the historic Hill district to protect long-term housing supply. Investors evaluating Newport should verify zoning before purchase — the same property's STR economics differ dramatically across zone boundaries.

Tax Strategy for Compliant Investors

Even where Newport's rules constrain inventory, properly-licensed STR investors retain the full federal tax stack. Cost segregation accelerates depreciation, and the STR loophole can let losses offset W-2 income for materially-participating owners. See cost segregation for Airbnb properties for the playbook.

Frequently asked questions