Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0250 Compare Versions

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

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5	5	2023 -- S 0250
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7	7	LC000348
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9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO TAXATION -- BUSINESS CORPORATION TAX
16	16	Introduced By: Senators Raptakis, F. Lombardi, Sosnowski, Ciccone, DiPalma, Tikoian,
17	17	Murray, Paolino, E Morgan, and Burke
18	18	Date Introduced: February 16, 2023
19	19	Referred To: Senate Finance
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22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business 1
24	24	Corporation Tax" is hereby amended to read as follows: 2
25	25	44-11-2. Imposition of tax. 3
26	26	(a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net 4
27	27	income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as provided 5
28	28	in §§ 44-11-13 — 44-11-15, for the taxable year. For tax years beginning on or after January 1, 6
29	29	2015, each corporation shall annually pay to the state a tax equal to seven percent (7.0%) of net 7
30	30	income, as defined in § 44-11-13 — 44-11-15, for the taxable year. 8
31	31	(b) A corporation shall pay the amount of any tax as computed in accordance with 9
32	32	subsection (a) after deducting from “net income,” as used in this section, fifty percent (50%) of the 10
33	33	excess of capital gains over capital losses realized during the taxable year, if for the taxable year: 11
34	34	(1) The corporation is engaged in buying, selling, dealing in, or holding securities on its 12
35	35	own behalf and not as a broker, underwriter, or distributor; 13
36	36	(2) Its gross receipts derived from these activities during the taxable year amounted to at 14
37	37	least ninety percent (90%) of its total gross receipts derived from all of its activities during the year. 15
38	38	“Gross receipts” means all receipts, whether in the form of money, credits, or other valuable 16
39	39	consideration, received during the taxable year in connection with the conduct of the taxpayer’s 17
40	40	activities. 18
41	41	(c) A corporation shall not pay the amount of the tax computed on the basis of its net 19
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45	45	income under subsection (a), but shall annually pay to the state a tax equal to ten cents ($.10) for 1
46	46	each one hundred dollars ($100) of gross income for the taxable year or a tax of one hundred dollars 2
47	47	($100), whichever tax shall be the greater, if for the taxable year the corporation is either a “personal 3
48	48	holding company” registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-4
49	49	1 et seq., “regulated investment company,” or a “real estate investment trust” as defined in the 5
50	50	federal income tax law applicable to the taxable year. “Gross income” means gross income as 6
51	51	defined in the federal income tax law applicable to the taxable year, plus: 7
52	52	(1) Any interest not included in the federal gross income; minus 8
53	53	(2) Interest on obligations of the United States or its possessions, and other interest exempt 9
54	54	from taxation by this state; and minus 10
55	55	(3) Fifty percent (50%) of the excess of capital gains over capital losses realized during the 11
56	56	taxable year. 12
57	57	(d)(1) A small business corporation having an election in effect under subchapter S, 26 13
58	58	U.S.C. § 1361 et seq., shall not be subject to the Rhode Island income tax on corporations, except 14
59	59	that the corporation shall be subject to the provisions of subsection (a), to the extent of the income 15
60	60	that is subjected to federal tax under subchapter S. Effective for tax years beginning on or after 16
61	61	January 1, 2015, a small business corporation having an election in effect under subchapter S, 26 17
62	62	U.S.C. § 1361 et seq., shall be subject to the minimum tax under § 44-11-2(e). 18
63	63	(2) The shareholders of the corporation who are residents of Rhode Island shall include in 19
64	64	their income their proportionate share of the corporation’s federal taxable income. 20
65	65	(3) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.] 21
66	66	(4) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.] 22
67	67	(e) Minimum tax. The tax imposed upon any corporation under this section, including a 23
68	68	small business corporation having an election in effect under subchapter S, 26 U.S.C. § 1361 et 24
69	69	seq., shall not be less than four hundred fifty dollars ($450). For tax years beginning on or after 25
70	70	January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400). 26
71	71	(f) If a corporation's annual gross income, as defined in § 44-11-2(c), amounts to less than 27
72	72	the four hundred dollar ($400) minimum tax imposed by subsection (e) of this section, the 28
73	73	difference shall be refunded to the corporation; provided, the amount refunded shall never be 29
74	74	greater than the four hundred dollar ($400) minimum tax paid. 30
75	75	SECTION 2. This act shall take effect upon passage. 31
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82	82	EXPLANATION
83	83	BY THE LEGISLATIVE COUNCIL
84	84	OF
85	85	A N A C T
86	86	RELATING TO TAXATION -- BUSINESS CORPORATION TAX
87	87	***
88	88	This act would refund the minimum tax paid by corporations with annual gross income of 1
89	89	less than four hundred dollars ($400); but caps the amount refunded at four hundred dollars ($400). 2
90	90	This act would take effect upon passage. 3
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