Rhode Island 2023 Regular Session

Rhode Island House Bill H6209 Compare Versions

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

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5	5	2023 -- H 6209
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7	7	LC002626
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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: Representatives Slater, and O'Brien
17	17	Date Introduced: March 24, 2023
18	18	Referred To: House Finance
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21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Section 44-11-11 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	44-11-11. “Net income” defined. 3
25	25	(a)(1) “Net income” means, for any taxable year and for any corporate taxpayer, the taxable 4
26	26	income of the taxpayer for that taxable year under the laws of the United States, plus: 5
27	27	(i) Any interest not included in the taxable income; 6
28	28	(ii) Any specific exemptions; 7
29	29	(iii) The tax imposed by this chapter; 8
30	30	(iv) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck 9
31	31	Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus 10
32	32	Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or 11
33	33	any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount 12
34	34	of the loan forgiven exceeds $250,000; and minus: 13
35	35	(v) Interest on obligations of the United States or its possessions, and other interest exempt 14
36	36	from taxation by this state; and 15
37	37	(vi) The federal net operating loss deduction. 16
38	38	(2) All binding federal elections made by or on behalf of the taxpayer applicable either 17
39	39	directly or indirectly to the determination of taxable income shall be binding on the taxpayer except 18
40	40	where this chapter or its attendant regulations specifically modify or provide otherwise. Rhode 19
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44	44	Island taxable income shall not include the “gross-up of dividends” required by the federal Internal 1
45	45	Revenue Code to be taken into taxable income in connection with the taxpayer’s election of the 2
46	46	foreign tax credit. 3
47	47	(b) A net operating loss deduction shall be allowed, which shall be the same as the net 4
48	48	operating loss deduction allowed under 26 U.S.C. § 172, except that: 5
49	49	(1) Any net operating loss included in determining the deduction shall be adjusted to reflect 6
50	50	the inclusions and exclusions from entire net income required by subsection (a) of this section and 7
51	51	§ 44-11-11.1; 8
52	52	(2) The deduction shall not include any net operating loss sustained during any taxable year 9
53	53	in which the taxpayer was not subject to the tax imposed by this chapter; and 10
54	54	(3) The deduction shall not exceed the deduction for the taxable year allowable under 26 11
55	55	U.S.C. § 172; provided, that the deduction for a taxable year may not be carried back to any other 12
56	56	taxable year for Rhode Island purposes but shall only be allowable on a carry forward basis for the 13
57	57	five (5) succeeding taxable years. 14
58	58	(c) “Domestic international sales corporations” (referred to as DISCs), for the purposes of 15
59	59	this chapter, will be treated as they are under federal income tax law and shall not pay the amount 16
60	60	of the tax computed under § 44-11-2(a). Any income to shareholders of DISCs is to be treated in 17
61	61	the same manner as it is treated under federal income tax law as it exists on December 31, 1984. 18
62	62	(d) A corporation that qualifies as a “foreign sales corporation” (FSC) under the provisions 19
63	63	of subchapter N, 26 U.S.C. § 861 et seq., and that has in effect for the entire taxable year a valid 20
64	64	election under federal law to be treated as a FSC, shall not pay the amount of the tax computed 21
65	65	under § 44-11-2(a). Any income to shareholders of FSCs is to be treated in the same manner as it 22
66	66	is treated under federal income tax law as it exists on January 1, 1985. 23
67	67	(e) For purposes of a corporation’s state tax liability, any deduction to income allowable 24
68	68	under 26 U.S.C. § 1400Z-2(c) may be claimed in the case of any investment held by the taxpayer 25
69	69	for at least seven years. The division of taxation shall promulgate, in its discretion, rules and 26
70	70	regulations relative to the accelerated application of deductions under 26 U.S.C. § 1400Z-2(c). 27
71	71	(f) For purposes of a corporation's state tax liability, any deduction to income allowable 28
72	72	under the laws of the United States but for 26 U.S.C. § 280E, may be claimed in the case of any 29
73	73	cannabis establishment defined pursuant to § 21-28.11-3. 30
74	74	SECTION 2. This act shall take effect upon passage. 31
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81	81	EXPLANATION
82	82	BY THE LEGISLATIVE COUNCIL
83	83	OF
84	84	A N A C T
85	85	RELATING TO TAXATION -- BUSINESS CORPORATION TAX
86	86	***
87	87	This act would allow cannabis establishments, as defined pursuant to § 21-28.11-3, to claim 1
88	88	any deduction to income that would be allowable under the laws of the United States but for 26 2
89	89	U.S.C. § 280E. 3
90	90	This act would take effect upon passage. 4
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