Rhode Island 2023 Regular Session

Rhode Island House Bill H6187 Compare Versions

Only one version of the bill is available at this time.

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5	5	2023 -- H 6187
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7	7	LC001297
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9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
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14	14	A N A C T
15	15	RELATING TO TAXATION -- BUSINESS CORPORATION TAX
16	16	Introduced By: Representative Matthew S. Dawson
17	17	Date Introduced: March 22, 2023
18	18	Referred To: House Finance
19	19	(By Request)
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business 1
23	23	Corporation Tax" is hereby amended to read as follows: 2
24	24	44-11-2. Imposition of tax. 3
25	25	(a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net 4
26	26	income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as provided 5
27	27	in §§ 44-11-13 -- 44-11-15, for the taxable year. For tax years beginning on or after January 1, 6
28	28	2015, each corporation shall annually pay to the state a tax equal to seven percent (7.0%) of net 7
29	29	income, as defined in § 44-11-13 -- 44-11-15, for the taxable year. 8
30	30	(b) A corporation shall pay the amount of any tax as computed in accordance with 9
31	31	subsection (a) after deducting from "net income," as used in this section, fifty percent (50%) of the 10
32	32	excess of capital gains over capital losses realized during the taxable year, if for the taxable year: 11
33	33	(1) The corporation is engaged in buying, selling, dealing in, or holding securities on its 12
34	34	own behalf and not as a broker, underwriter, or distributor; 13
35	35	(2) Its gross receipts derived from these activities during the taxable year amounted to at 14
36	36	least ninety percent (90%) of its total gross receipts derived from all of its activities during the year. 15
37	37	"Gross receipts" means all receipts, whether in the form of money, credits, or other valuable 16
38	38	consideration, received during the taxable year in connection with the conduct of the taxpayer's 17
39	39	activities. 18
40	40	(c) A corporation shall not pay the amount of the tax computed on the basis of its net 19
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44	44	income under subsection (a), but shall annually pay to the state a tax equal to ten cents ($.10) for 1
45	45	each one hundred dollars ($100) of gross income for the taxable year or a tax of one hundred dollars 2
46	46	($100), whichever tax shall be the greater, if for the taxable year the corporation is either a "personal 3
47	47	holding company" registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-4
48	48	1 et seq., "regulated investment company," or a "real estate investment trust" as defined in the 5
49	49	federal income tax law applicable to the taxable year. "Gross income" means gross income as 6
50	50	defined in the federal income tax law applicable to the taxable year, plus: 7
51	51	(1) Any interest not included in the federal gross income; minus 8
52	52	(2) Interest on obligations of the United States or its possessions, and other interest exempt 9
53	53	from taxation by this state; and minus 10
54	54	(3) Fifty percent (50%) of the excess of capital gains over capital losses realized during the 11
55	55	taxable year. 12
56	56	(d)(1) A small business corporation having an election in effect under subchapter S, 26 13
57	57	U.S.C. § 1361 et seq., shall not be subject to the Rhode Island income tax on corporations, except 14
58	58	that the corporation shall be subject to the provisions of subsection (a), to the extent of the income 15
59	59	that is subjected to federal tax under subchapter S. Effective for tax years beginning on or after 16
60	60	January 1, 2015, a small business corporation having an election in effect under subchapter S, 26 17
61	61	U.S.C. § 1361 et seq., shall be subject to the minimum tax under § 44-11-2(e). 18
62	62	(2) The shareholders of the corporation who are residents of Rhode Island shall include in 19
63	63	their income their proportionate share of the corporation's federal taxable income. 20
64	64	(3) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.] 21
65	65	(4) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.] 22
66	66	(e) Minimum tax. The tax imposed upon any corporation under this section, including a 23
67	67	small business corporation having an election in effect under subchapter S, 26 U.S.C. § 1361 et 24
68	68	seq., shall not be less than four hundred fifty dollars ($450). For tax years beginning on or after 25
69	69	January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400); provided, 26
70	70	however, no entity liable for the minimum tax shall be required to pay such tax in its first two (2) 27
71	71	years of existence if annual net taxable income is less than five thousand dollars ($5,000). 28
72	72	SECTION 2. This act shall take effect upon passage. 29
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79	79	EXPLANATION
80	80	BY THE LEGISLATIVE COUNCIL
81	81	OF
82	82	A N A C T
83	83	RELATING TO TAXATION -- BUSINESS CORPORATION TAX
84	84	***
85	85	This act would exempt new entities in the first two (2) years of existence from paying the 1
86	86	minimum tax if annual net taxable income is less than five thousand dollars ($5,000). 2
87	87	This act would take effect upon passage. 3
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