The rules where you work $17
A first 30 days checklist, everyday forms, licenses, workers’ comp and taxes for Rhode Island, with a yearly calendar. Instant PDF download.
Buy the packet: $17Digital product, all sales final. Informational only, not legal, financial, tax or business advice.
What Rhode Island expects from a new trade business
Rhode Island is small and strict: nearly everyone who takes paid work on a structure has to register with the state, and the handyman exemption stops at $500. The surprise bill is a $400 annual charge on every LLC, no matter what it earned. Your lien steps also run on a 200-day and a 40-day clock that are easy to miss.
Register for almost any job over $500
In Rhode Island you can't do, offer or bid on work on a structure without a current certificate of registration from the Contractors' Registration and Licensing Board. It reaches appurtenances too, like decks, sheds, fencing and walkways. It's a registration, and your LLC or company has to hold it, not just you.
The handyman exemption is thin: all your contracts on the job have to total under $500 and be casual or minor. Advertising as a contractor cancels it. Work on your own residence is exempt, unless you do it as a business to sell. You must carry $500,000 in liability coverage plus any required comp.
Subs register too unless they're a registered contractor's employees: carpenters, framers, siding, roofers, concrete, drywall, plaster, insulation, tile, flooring, masons, painters and more. You can't hire an unregistered sub, and you owe the board your sub list within 24 hours of a request.
Any work over $1,000 needs a written contract with consumer disclosures and the Notice of Possible Mechanic's Lien. Leaving out that notice can mean a $1,000 fine. If you solicit in the home of a customer 60 or older, they get 3 days to cancel, absent an emergency.
Fines run up to $5,000 for a first violation and $10,000 after that. Electricians need a state license, and plumbing businesses need a master license. A construction attorney can look over your contract form.
Source: R.I. Gen. Laws 5-65-1, 5-65-2, 5-65-3, 5-65-7, 5-65-10 · R.I. Gen. Laws 5-6-2 (electricians) · R.I. Gen. Laws 5-20-8 (master plumbers) · R.I. Gen. Laws 5-65-2 (exemptions) · R.I. Gen. Laws 5-65-27 (elderly in-home cancel) · R.I. Gen. Laws 42-66-4.1 (elderly person)
Who to call: an attorney near you
Your sub's paperwork is your problem
Rhode Island's act applies to anyone who regularly employs employees, and your contractor registration requires you to have any comp you owe.
The state has its own rule for construction. A GC or construction manager must hold written proof that each sub either carries comp or has filed as an independent contractor. No paper, and you're treated as that sub's employer.
That independent contractor status comes from a notice of designation filed with the director, every year, for each hiring entity. Filing creates a presumption, not a guarantee.
The definition of employee leaves out sole proprietors, corporate shareholders and directors, partners, and LLC members. Don't lean on that if you work the jobs. The shareholder and member exclusions don't apply to those who work under a contract of service for the company. Knowingly going without required coverage is a felony, with up to 2 years and up to $1,000 a day in civil fines. An insurance agent who writes contractors can walk you through how it applies to you.
Source: R.I. Gen. Laws 28-29-2 · R.I. Gen. Laws 28-29-6 · R.I. Gen. Laws 28-29-6.1 · R.I. Gen. Laws 28-29-17.1 · R.I. Gen. Laws 28-36-15
Who to call: an insurance agent near you
Getting paid: a notice before you start, then 200 and 40 days
Rhode Island's lien runs in steps, and missing one loses it:
- Be registered. A contractor who wasn't registered when bidding or signing, and continuously while working, may not file a lien at all. A court may excuse it to prevent substantial injustice. Don't count on that.
- Before you start, if you contract directly with the owner and aren't only a material supplier: give the Notice of Possible Mechanic's Lien. Put it in your contract, or send it by certified mail any time before work or delivery. Without it you're not entitled to claim a lien.
- Within 200 days of doing the work: mail a sworn notice of intention to the record owner by registered or certified mail, return receipt, and file a copy in the land evidence records of the city or town. It only protects work from the 200 days before filing, and after.
- If the mailed notice comes back: file it with the returned envelope within 30 days of the return.
- Within 40 days of recording that notice: file your complaint in superior court and a notice of lis pendens. The complaint goes in the same day or within 7 days of the lis pendens.
Architects and engineers have until the later of 200 days after the work or 10 days after visible construction starts.
A contract clause barring the notice or enforcement is void. But a contract can require a written waiver signed with or after payment, so read what you sign. A construction attorney can set this up once.
Source: R.I. Gen. Laws 34-28-4 · R.I. Gen. Laws 34-28-4.1 · R.I. Gen. Laws 34-28-10 · R.I. Gen. Laws 34-28-1 · R.I. Gen. Laws 5-65-4 (registration and liens) · R.I. Gen. Laws 34-28-7 (architects and engineers) · R.I. Gen. Laws 34-28-9
Who to call: an attorney near you
Consumer on the job, retailer if you sell at a price
Under Rhode Island's Division of Taxation rule, you pay tax as a consumer on materials, supplies and tools you use on a lump-sum, cost-plus or time and material construction contract. That covers repair, alteration, improvement, remodeling and new construction, and every trade from carpentry to landscaping.
It flips if you contract to sell materials at an agreed price. Then you're a retailer and need a permit.
For standard equipment you sell and install, the rule says to separate the full retail price of the item from the install charge. The tax goes on the item.
Don't assume a separate invoice line alone makes you a retailer. The wording of the deal matters. A CPA who works with contractors can look over how you bill.
Source: 280-RICR-20-70-54, Contractors and Subcontractors
Who to call: a CPA or tax pro near you
Budget for the $400 charge every year
Forming an LLC with the Secretary of State costs $150. The annual report is $50, due between February 1 and May 1, with a $25 late fee.
The one that catches people: every LLC owes a $400 annual charge on Form RI-1065 to the Division of Taxation. That includes a single-member LLC treated as disregarded, and it's owed no matter what you earned. For an LLC not taxed as a corporation, the statute makes the charge due the 15th day of the 4th month after year end, April 15 on a calendar year, with $100 added if it's late. The return follows the federal due date. Confirm the date with the Division of Taxation. A part-time LLC with a slow year still costs you $450 to keep open.
Pass-through profit goes on your Rhode Island personal return. When an S-corp election makes sense is a numbers question. Bring what your business clears after your floor rate to a CPA who works with contractors.
Source: R.I. Secretary of State, Business Services · R.I. Gen. Laws 7-16-65 (LLC fees) · R.I. Gen. Laws 7-16-66 (annual report) · R.I. Gen. Laws 7-16-67 (annual charge) · R.I. Gen. Laws 44-11-2 (minimum tax)
Who to call: a CPA or tax pro near you
Education, not legal or tax advice. Rules change. Confirm anything here with a licensed pro in Rhode Island before you rely on it. Last updated November 2026.