2025 -- H 6008
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LC001550
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2025
____________
A N A C T
RELATING TO TAXATION -- BUSINESS CORPORATION TAX
Introduced By: Representatives Santucci, Quattrocchi, Roberts, Nardone, Fascia, Place,
Chippendale, Newberry, and Paplauskas
Date Introduced: February 28, 2025
Referred To: House Finance
It is enacted by the General Assembly as follows:
SECTION 1. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business 1
Corporation Tax" is hereby amended to read as follows: 2
44-11-2. Imposition of tax. 3
(a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net 4
income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as provided 5
in §§ 44-11-13 — 44-11-15, for the taxable year. For tax years beginning on or after January 1, 6
2015, each corporation shall annually pay to the state a tax equal to seven percent (7.0%) of net 7
income, as defined in § 44-11-13 — 44-11-15, for the taxable year. 8
(b) A corporation shall pay the amount of any tax as computed in accordance with 9
subsection (a) after deducting from “net income,” as used in this section, fifty percent (50%) of the 10
excess of capital gains over capital losses realized during the taxable year, if for the taxable year: 11
(1) The corporation is engaged in buying, selling, dealing in, or holding securities on its 12
own behalf and not as a broker, underwriter, or distributor; 13
(2) Its gross receipts derived from these activities during the taxable year amounted to at 14
least ninety percent (90%) of its total gross receipts derived from all of its activities during the year. 15
“Gross receipts” means all receipts, whether in the form of money, credits, or other valuable 16
consideration, received during the taxable year in connection with the conduct of the taxpayer’s 17
activities. 18
(c) A corporation shall not pay the amount of the tax computed on the basis of its net 19
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income under subsection (a), but shall annually pay to the state a tax equal to ten cents ($.10) for 1
each one hundred dollars ($100) of gross income for the taxable year or a tax of one hundred dollars 2
($100), whichever tax shall be the greater, if for the taxable year the corporation is either a “personal 3
holding company” registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-4
1 et seq., “regulated investment company,” or a “real estate investment trust” as defined in the 5
federal income tax law applicable to the taxable year. “Gross income” means gross income as 6
defined in the federal income tax law applicable to the taxable year, plus: 7
(1) Any interest not included in the federal gross income; minus 8
(2) Interest on obligations of the United States or its possessions, and other interest exempt 9
from taxation by this state; and minus 10
(3) Fifty percent (50%) of the excess of capital gains over capital losses realized during the 11
taxable year. 12
(d)(1) A small business corporation having an election in effect under subchapter S, 26 13
U.S.C. § 1361 et seq., shall not be subject to the Rhode Island income tax on corporations, except 14
that the corporation shall be subject to the provisions of subsection (a), to the extent of the income 15
that is subjected to federal tax under subchapter S. Effective for tax years beginning on or after 16
January 1, 2015, a small business corporation having an election in effect under subchapter S, 26 17
U.S.C. § 1361 et seq., shall be subject to the minimum tax under § 44-11-2(e). 18
(2) The shareholders of the corporation who are residents of Rhode Island shall include in 19
their income their proportionate share of the corporation’s federal taxable income. 20
(3) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.] 21
(4) [Deleted by P.L. 2004, ch. 595, art. 29, § 1.] 22
(e) Minimum tax. The tax imposed upon any corporation under this section, including a 23
small business corporation having an election in effect under subchapter S, 26 U.S.C. § 1361 et 24
seq., shall not be less than four hundred fifty dollars ($450). For tax years beginning on or after 25
January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400). 26
(f) Credit against tax for ABLE contributions. An employer shall be allowed a credit 27
against income tax for contributions to an eligible employee’s ABLE account, established pursuant 28
to §42-7.2-20.3, for a maximum credit of two thousand dollars ($2,000) per employee, per year. 29
SECTION 2. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal 30
Income Tax" is hereby amended to read as follows: 31
44-30-2.6. Rhode Island taxable income — Rate of tax. 32
(a) “Rhode Island taxable income” means federal taxable income as determined under the 33
Internal Revenue Code, 26 U.S.C. § 1 et seq., not including the increase in the basic, standard-34
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deduction amount for married couples filing joint returns as provided in the Jobs and Growth Tax 1
Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief Reconciliation Act of 2
2001 (EGTRRA), and as modified by the modifications in § 44-30-12. 3
(b) Notwithstanding the provisions of §§ 44-30-1 and 44-30-2, for tax years beginning on 4
or after January 1, 2001, a Rhode Island personal income tax is imposed upon the Rhode Island 5
taxable income of residents and nonresidents, including estates and trusts, at the rate of twenty-five 6
and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for tax year 2002 7
and thereafter of the federal income tax rates, including capital gains rates and any other special 8
rates for other types of income, except as provided in § 44-30-2.7, which were in effect immediately 9
prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA); 10
provided, rate schedules shall be adjusted for inflation by the tax administrator beginning in taxable 11
year 2002 and thereafter in the manner prescribed for adjustment by the commissioner of Internal 12
Revenue in 26 U.S.C. § 1(f). However, for tax years beginning on or after January 1, 2006, a 13
taxpayer may elect to use the alternative flat tax rate provided in § 44-30-2.10 to calculate his or 14
her personal income tax liability. 15
(c) For tax years beginning on or after January 1, 2001, if a taxpayer has an alternative 16
minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode Island 17
alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by 18
multiplying the federal tentative minimum tax without allowing for the increased exemptions under 19
the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal form 6251 20
Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%) for tax year 21
2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing the product 22
to the Rhode Island tax as computed otherwise under this section. The excess shall be the taxpayer’s 23
Rhode Island alternative minimum tax. 24
(1) For tax years beginning on or after January 1, 2005, and thereafter, the exemption 25
amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by 26
the tax administrator in the manner prescribed for adjustment by the commissioner of Internal 27
Revenue in 26 U.S.C. § 1(f). 28
(2) For the period January 1, 2007, through December 31, 2007, and thereafter, Rhode 29
Island taxable income shall be determined by deducting from federal adjusted gross income as 30
defined in 26 U.S.C. § 62 as modified by the modifications in § 44-30-12 the Rhode Island 31
itemized-deduction amount and the Rhode Island exemption amount as determined in this section. 32
(A) Tax imposed. 33
(1) There is hereby imposed on the taxable income of married individuals filing joint 34
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returns and surviving spouses a tax determined in accordance with the following table: 1
If taxable income is: The tax is: 2
Not over $53,150 3.75% of taxable income 3
Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the excess over $53,150 4
Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the excess over $128,500 5
Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the excess over $195,850 6
Over $349,700 $26,333.75 plus 9.90% of the excess over $349,700 7
(2) There is hereby imposed on the taxable income of every head of household a tax 8
determined in accordance with the following table: 9
If taxable income is: The tax is: 10
Not over $42,650 3.75% of taxable income 11
Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the excess over $42,650 12
Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the excess over $110,100 13
Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the excess over $178,350 14
Over $349,700 $27,031.75 plus 9.90% of the excess over $349,700 15
(3) There is hereby imposed on the taxable income of unmarried individuals (other than 16
surviving spouses and heads of households) a tax determined in accordance with the following 17
table: 18
If taxable income is: The tax is: 19
Not over $31,850 3.75% of taxable income 20
Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the excess over $31,850 21
Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the excess over $77,100 22
Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the excess over $160,850 23
Over $349,700 $27,849.00 plus 9.90% of the excess over $349,700 24
(4) There is hereby imposed on the taxable income of married individuals filing separate 25
returns and bankruptcy estates a tax determined in accordance with the following table: 26
If taxable income is: The tax is: 27
Not over $26,575 3.75% of taxable income 28
Over $26,575 but not over $64,250 $996.56 plus 7.00% of the excess over $26,575 29
Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the excess over $64,250 30
Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the excess over $97,925 31
Over $174,850 $13,166.88 plus 9.90% of the excess over $174,850 32
(5) There is hereby imposed a taxable income of an estate or trust a tax determined in 33
accordance with the following table: 34
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If taxable income is: The tax is: 1
Not over $2,150 3.75% of taxable income 2
Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess over $2,150 3
Over $5,000 but not over $7,650 $280.13 plus 7.75% of the excess over $5,000 4
Over $7,650 but not over $10,450 $485.50 plus 9.00% of the excess over $7,650 5
Over $10,450 $737.50 plus 9.90% of the excess over $10,450 6
(6) Adjustments for inflation. 7
The dollars amount contained in paragraph (A) shall be increased by an amount equal to: 8
(a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by; 9
(b) The cost-of-living adjustment determined under section (J) with a base year of 1993; 10
(c) The cost-of-living adjustment referred to in subparagraphs (a) and (b) used in making 11
adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall 12
be determined under section (J) by substituting “1994” for “1993.” 13
(B) Maximum capital gains rates. 14
(1) In general. 15
If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax 16
imposed by this section for such taxable year shall not exceed the sum of: 17
(a) 2.5% of the net capital gain as reported for federal income tax purposes under section 18
26 U.S.C. § 1(h)(1)(a) and 26 U.S.C. § 1(h)(1)(b). 19
(b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C. 20
§ 1(h)(1)(c). 21
(c) 6.25% of the net capital gain as reported for federal income tax purposes under 26 22
U.S.C. § 1(h)(1)(d). 23
(d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C. 24
§ 1(h)(1)(e). 25
(2) For tax years beginning on or after January 1, 2010, the tax imposed on net capital gain 26
shall be determined under subdivision 44-30-2.6(c)(2)(A). 27
(C) Itemized deductions. 28
(1) In general. 29
For the purposes of section (2), “itemized deductions” means the amount of federal 30
itemized deductions as modified by the modifications in § 44-30-12. 31
(2) Individuals who do not itemize their deductions. 32
In the case of an individual who does not elect to itemize his deductions for the taxable 33
year, they may elect to take a standard deduction. 34
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(3) Basic standard deduction. 1
The Rhode Island standard deduction shall be allowed in accordance with the following 2
table: 3
Filing status Amount 4
Single $5,350 5
Married filing jointly or qualifying widow(er) $8,900 6
Married filing separately $4,450 7
Head of Household $7,850 8
(4) Additional standard deduction for the aged and blind. 9
An additional standard deduction shall be allowed for individuals age sixty-five (65) or 10
older or blind in the amount of $1,300 for individuals who are not married and $1,050 for 11
individuals who are married. 12
(5) Limitation on basic standard deduction in the case of certain dependents. 13
In the case of an individual to whom a deduction under section (E) is allowable to another 14
taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater of: 15
(a) $850; 16
(b) The sum of $300 and such individual’s earned income; 17
(6) Certain individuals not eligible for standard deduction. 18
In the case of: 19
(a) A married individual filing a separate return where either spouse itemizes deductions; 20
(b) Nonresident alien individual; 21
(c) An estate or trust; 22
The standard deduction shall be zero. 23
(7) Adjustments for inflation. 24
Each dollar amount contained in paragraphs (3), (4) and (5) shall be increased by an amount 25
equal to: 26
(a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988, multiplied 27
by 28
(b) The cost-of-living adjustment determined under section (J) with a base year of 1988. 29
(D) Overall limitation on itemized deductions. 30
(1) General rule. 31
In the case of an individual whose adjusted gross income as modified by § 44-30-12 32
exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the 33
taxable year shall be reduced by the lesser of: 34
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(a) Three percent (3%) of the excess of adjusted gross income as modified by § 44-30-12 1
over the applicable amount; or 2
(b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable for 3
such taxable year. 4
(2) Applicable amount. 5
(a) In general. 6
For purposes of this section, the term “applicable amount” means $156,400 ($78,200 in the 7
case of a separate return by a married individual) 8
(b) Adjustments for inflation. 9
Each dollar amount contained in paragraph (a) shall be increased by an amount equal to: 10
(i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by 11
(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991. 12
(3) Phase-out of Limitation. 13
(a) In general. 14
In the case of taxable year beginning after December 31, 2005, and before January 1, 2010, 15
the reduction under section (1) shall be equal to the applicable fraction of the amount which would 16
be the amount of such reduction. 17
(b) Applicable fraction. 18
For purposes of paragraph (a), the applicable fraction shall be determined in accordance 19
with the following table: 20
For taxable years beginning in calendar year The applicable fraction is 21
2006 and 2007 ⅔ 22
2008 and 2009 ⅓ 23
(E) Exemption amount. 24
(1) In general. 25
Except as otherwise provided in this subsection, the term “exemption amount” means 26
$3,400. 27
(2) Exemption amount disallowed in case of certain dependents. 28
In the case of an individual with respect to whom a deduction under this section is allowable 29
to another taxpayer for the same taxable year, the exemption amount applicable to such individual 30
for such individual's taxable year shall be zero. 31
(3) Adjustments for inflation. 32
The dollar amount contained in paragraph (1) shall be increased by an amount equal to: 33
(a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by 34
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1989. 1
(4) Limitation. 2
(a) In general. 3
In the case of any taxpayer whose adjusted gross income as modified for the taxable year 4
exceeds the threshold amount shall be reduced by the applicable percentage. 5
(b) Applicable percentage. 6
In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the 7
threshold amount, the exemption amount shall be reduced by two (2) percentage points for each 8
$2,500 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year 9
exceeds the threshold amount. In the case of a married individual filing a separate return, the 10
preceding sentence shall be applied by substituting “$1,250” for “$2,500.” In no event shall the 11
applicable percentage exceed one hundred percent (100%). 12
(c) Threshold Amount. 13
For the purposes of this paragraph, the term ‘‘threshold amount’’ shall be determined with 14
the following table: 15
Filing status Amount 16
Single $156,400 17
Married filing jointly of qualifying widow(er) $234,600 18
Married filing separately $117,300 19
Head of Household $195,500 20
(d) Adjustments for inflation. 21
Each dollar amount contained in paragraph (b) shall be increased by an amount equal to: 22
(i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by 23
(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991. 24
(5) Phase-out of limitation. 25
(a) In general. 26
In the case of taxable years beginning after December 31, 2005, and before January 1, 27
2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which 28
would be the amount of such reduction. 29
(b) Applicable fraction. 30
For the purposes of paragraph (a), the applicable fraction shall be determined in accordance 31
with the following table: 32
For taxable years beginning in calendar year The applicable fraction is 33
2006 and 2007 ⅔ 34
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2008 and 2009 ⅓ 1
(F) Alternative minimum tax. 2
(1) General rule. There is hereby imposed (in addition to any other tax imposed by this 3
subtitle) a tax equal to the excess (if any) of: 4
(a) The tentative minimum tax for the taxable year, over 5
(b) The regular tax for the taxable year. 6
(2) The tentative minimum tax for the taxable year is the sum of: 7
(a) 6.5 percent of so much of the taxable excess as does not exceed $175,000, plus 8
(b) 7.0 percent of so much of the taxable excess above $175,000. 9
(3) The amount determined under the preceding sentence shall be reduced by the alternative 10
minimum tax foreign tax credit for the taxable year. 11
(4) Taxable excess. For the purposes of this subsection the term “taxable excess” means so 12
much of the federal alternative minimum taxable income as modified by the modifications in § 44-13
30-12 as exceeds the exemption amount. 14
(5) In the case of a married individual filing a separate return, subparagraph (2) shall be 15
applied by substituting “$87,500” for $175,000 each place it appears. 16
(6) Exemption amount. 17
For purposes of this section "exemption amount" means: 18
Filing status Amount 19
Single $39,150 20
Married filing jointly or qualifying widow(er) $53,700 21
Married filing separately $26,850 22
Head of Household $39,150 23
Estate or trust $24,650 24
(7) Treatment of unearned income of minor children 25
(a) In general. 26
In the case of a minor child, the exemption amount for purposes of section (6) shall not 27
exceed the sum of: 28
(i) Such child's earned income, plus 29
(ii) $6,000. 30
(8) Adjustments for inflation. 31
The dollar amount contained in paragraphs (6) and (7) shall be increased by an amount 32
equal to: 33
(a) Such dollar amount contained in paragraphs (6) and (7) in the year 2004, multiplied by 34
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(b) The cost-of-living adjustment determined under section (J) with a base year of 2004. 1
(9) Phase-out. 2
(a) In general. 3
The exemption amount of any taxpayer shall be reduced (but not below zero) by an amount 4
equal to twenty-five percent (25%) of the amount by which alternative minimum taxable income 5
of the taxpayer exceeds the threshold amount. 6
(b) Threshold amount. 7
For purposes of this paragraph, the term “threshold amount” shall be determined with the 8
following table: 9
Filing status Amount 10
Single $123,250 11
Married filing jointly or qualifying widow(er) $164,350 12
Married filing separately $82,175 13
Head of Household $123,250 14
Estate or Trust $82,150 15
(c) Adjustments for inflation 16
Each dollar amount contained in paragraph (9) shall be increased by an amount equal to: 17
(i) Such dollar amount contained in paragraph (9) in the year 2004, multiplied by 18
(ii) The cost-of-living adjustment determined under section (J) with a base year of 2004. 19
(G) Other Rhode Island taxes. 20
(1) General rule. There is hereby imposed (in addition to any other tax imposed by this 21
subtitle) a tax equal to twenty-five percent (25%) of: 22
(a) The Federal income tax on lump-sum distributions. 23
(b) The Federal income tax on parents' election to report child's interest and dividends. 24
(c) The recapture of Federal tax credits that were previously claimed on Rhode Island 25
return. 26
(H) Tax for children under 18 with investment income. 27
(1) General rule. There is hereby imposed a tax equal to twenty-five percent (25%) of: 28
(a) The Federal tax for children under the age of 18 with investment income. 29
(I) Averaging of farm income. 30
(1) General rule. At the election of an individual engaged in a farming business or fishing 31
business, the tax imposed in section 2 shall be equal to twenty-five percent (25%) of: 32
(a) The Federal averaging of farm income as determined in IRC section 1301 [26 U.S.C. § 33
1301]. 34
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(J) Cost-of-living adjustment. 1
(1) In general. 2
The cost-of-living adjustment for any calendar year is the percentage (if any) by which: 3
(a) The CPI for the preceding calendar year exceeds 4
(b) The CPI for the base year. 5
(2) CPI for any calendar year. 6
For purposes of paragraph (1), the CPI for any calendar year is the average of the consumer 7
price index as of the close of the twelve (12) month period ending on August 31 of such calendar 8
year. 9
(3) Consumer price index. 10
For purposes of paragraph (2), the term “consumer price index” means the last consumer 11
price index for all urban consumers published by the department of labor. For purposes of the 12
preceding sentence, the revision of the consumer price index that is most consistent with the 13
consumer price index for calendar year 1986 shall be used. 14
(4) Rounding. 15
(a) In general. 16
If any increase determined under paragraph (1) is not a multiple of $50, such increase shall 17
be rounded to the next lowest multiple of $50. 18
(b) In the case of a married individual filing a separate return, subparagraph (a) shall be 19
applied by substituting “$25” for $50 each place it appears. 20
(K) Credits against tax. For tax years beginning on or after January 1, 2001, a taxpayer 21
entitled to any of the following federal credits enacted prior to January 1, 1996, shall be entitled to 22
a credit against the Rhode Island tax imposed under this section: 23
(1) [Deleted by P.L. 2007, ch. 73, art. 7, § 5.] 24
(2) Child and dependent care credit; 25
(3) General business credits; 26
(4) Credit for elderly or the disabled; 27
(5) Credit for prior year minimum tax; 28
(6) Mortgage interest credit; 29
(7) Empowerment zone employment credit; 30
(8) Qualified electric vehicle credit. 31
(L) Credit against tax for adoption. For tax years beginning on or after January 1, 2006, 32
a taxpayer entitled to the federal adoption credit shall be entitled to a credit against the Rhode Island 33
tax imposed under this section if the adopted child was under the care, custody, or supervision of 34
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the Rhode Island department of children, youth and families prior to the adoption. 1
(M) The credit shall be twenty-five percent (25%) of the aforementioned federal credits 2
provided there shall be no deduction based on any federal credits enacted after January 1, 1996, 3
including the rate reduction credit provided by the federal Economic Growth and Tax 4
Reconciliation Act of 2001 (EGTRRA). In no event shall the tax imposed under this section be 5
reduced to less than zero. A taxpayer required to recapture any of the above credits for federal tax 6
purposes shall determine the Rhode Island amount to be recaptured in the same manner as 7
prescribed in this subsection. 8
(N) Rhode Island earned-income credit. 9
(1) In general. 10
For tax years beginning before January 1, 2015, a taxpayer entitled to a federal earned-11
income credit shall be allowed a Rhode Island earned-income credit equal to twenty-five percent 12
(25%) of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode 13
Island income tax. 14
For tax years beginning on or after January 1, 2015, and before January 1, 2016, a taxpayer 15
entitled to a federal earned-income credit shall be allowed a Rhode Island earned-income credit 16
equal to ten percent (10%) of the federal earned-income credit. Such credit shall not exceed the 17
amount of the Rhode Island income tax. 18
For tax years beginning on or after January 1, 2016, a taxpayer entitled to a federal earned-19
income credit shall be allowed a Rhode Island earned-income credit equal to twelve and one-half 20
percent (12.5%) of the federal earned-income credit. Such credit shall not exceed the amount of the 21
Rhode Island income tax. 22
For tax years beginning on or after January 1, 2017, a taxpayer entitled to a federal earned-23
income credit shall be allowed a Rhode Island earned-income credit equal to fifteen percent (15%) 24
of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode Island 25
income tax. 26
For tax years beginning on or after January 1, 2024, a taxpayer entitled to a federal earned-27
income credit shall be allowed a Rhode Island earned-income credit equal to sixteen percent (16%) 28
of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode Island 29
income tax. 30
(2) Refundable portion. 31
In the event the Rhode Island earned-income credit allowed under paragraph (N)(1) of this 32
section exceeds the amount of Rhode Island income tax, a refundable earned-income credit shall 33
be allowed as follows. 34
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(i) For tax years beginning before January 1, 2015, for purposes of paragraph (2) refundable 1
earned-income credit means fifteen percent (15%) of the amount by which the Rhode Island earned-2
income credit exceeds the Rhode Island income tax. 3
(ii) For tax years beginning on or after January 1, 2015, for purposes of paragraph (2) 4
refundable earned-income credit means one hundred percent (100%) of the amount by which the 5
Rhode Island earned-income credit exceeds the Rhode Island income tax. 6
(O) The tax administrator shall recalculate and submit necessary revisions to paragraphs 7
(A) through (J) to the general assembly no later than February 1, 2010, and every three (3) years 8
thereafter for inclusion in the statute. 9
(3) For the period January 1, 2011, through December 31, 2011, and thereafter, “Rhode 10
Island taxable income” means federal adjusted gross income as determined under the Internal 11
Revenue Code, 26 U.S.C. § 1 et seq., and as modified for Rhode Island purposes pursuant to § 44-12
30-12 less the amount of Rhode Island Basic Standard Deduction allowed pursuant to subparagraph 13
44-30-2.6(c)(3)(B), and less the amount of personal exemption allowed pursuant to subparagraph 14
44-30-2.6(c)(3)(C). 15
(A) Tax imposed. 16
(I) There is hereby imposed on the taxable income of married individuals filing joint 17
returns, qualifying widow(er), every head of household, unmarried individuals, married individuals 18
filing separate returns and bankruptcy estates, a tax determined in accordance with the following 19
table: 20
RI Taxable Income RI Income Tax 21
Over But not over Pay + % on Excess on the amount over 22
$ 0 - $ 55,000 $ 0 + 3.75% $ 0 23
55,000 - 125,000 2,063 + 4.75% 55,000 24
125,000 - 5,388 + 5.99% 125,000 25
(II) There is hereby imposed on the taxable income of an estate or trust a tax determined in 26
accordance with the following table: 27
RI Taxable Income RI Income Tax 28
Over But not over Pay + % on Excess on the amount over 29
$ 0 - $ 2,230 $ 0 + 3.75% $ 0 30
2,230 - 7,022 84 + 4.75% 2,230 31
7,022 - 312 + 5.99% 7,022 32
(B) Deductions: 33
(I) Rhode Island Basic Standard Deduction. 34
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Only the Rhode Island standard deduction shall be allowed in accordance with the 1
following table: 2
Filing status: Amount 3
Single $7,500 4
Married filing jointly or qualifying widow(er) $15,000 5
Married filing separately $7,500 6
Head of Household $11,250 7
(II) Nonresident alien individuals, estates and trusts are not eligible for standard 8
deductions. 9
(III) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island 10
purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand 11
dollars ($175,000), the standard deduction amount shall be reduced by the applicable percentage. 12
The term “applicable percentage” means twenty (20) percentage points for each five thousand 13
dollars ($5,000) (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable 14
year exceeds one hundred seventy-five thousand dollars ($175,000). 15
(C) Exemption Amount: 16
(I) The term “exemption amount” means three thousand five hundred dollars ($3,500) 17
multiplied by the number of exemptions allowed for the taxable year for federal income tax 18
purposes. For tax years beginning on or after 2018, the term “exemption amount” means the same 19
as it does in 26 U.S.C. § 151 and 26 U.S.C. § 152 just prior to the enactment of the Tax Cuts and 20
Jobs Act (Pub. L. No. 115-97) on December 22, 2017. 21
(II) Exemption amount disallowed in case of certain dependents. In the case of an 22
individual with respect to whom a deduction under this section is allowable to another taxpayer for 23
the same taxable year, the exemption amount applicable to such individual for such individual’s 24
taxable year shall be zero. 25
(III) Identifying information required. 26
(1) Except as provided in § 44-30-2.6(c)(3)(C)(II) of this section, no exemption shall be 27
allowed under this section with respect to any individual unless the Taxpayer Identification Number 28
of such individual is included on the federal return claiming the exemption for the same tax filing 29
period. 30
(2) Notwithstanding the provisions of § 44-30-2.6(c)(3)(C)(I) of this section, in the event 31
that the Taxpayer Identification Number for each individual is not required to be included on the 32
federal tax return for the purposes of claiming a personal exemption(s), then the Taxpayer 33
Identification Number must be provided on the Rhode Island tax return for the purpose of claiming 34
LC001550 - Page 15 of 18
said exemption(s). 1
(D) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island 2
purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand 3
dollars ($175,000), the exemption amount shall be reduced by the applicable percentage. The term 4
“applicable percentage” means twenty (20) percentage points for each five thousand dollars 5
($5,000) (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year 6
exceeds one hundred seventy-five thousand dollars ($175,000). 7
(E) Adjustment for inflation. The dollar amount contained in subparagraphs 44-30-8
2.6(c)(3)(A), 44-30-2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) shall be increased annually by an amount 9
equal to: 10
(I) Such dollar amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30-2.6(c)(3)(B) 11
and 44-30-2.6(c)(3)(C) adjusted for inflation using a base tax year of 2000, multiplied by; 12
(II) The cost-of-living adjustment with a base year of 2000. 13
(III) For the purposes of this section, the cost-of-living adjustment for any calendar year is 14
the percentage (if any) by which the consumer price index for the preceding calendar year exceeds 15
the consumer price index for the base year. The consumer price index for any calendar year is the 16
average of the consumer price index as of the close of the twelve-month (12) period ending on 17
August 31, of such calendar year. 18
(IV) For the purpose of this section the term “consumer price index” means the last 19
consumer price index for all urban consumers published by the department of labor. For the purpose 20
of this section the revision of the consumer price index that is most consistent with the consumer 21
price index for calendar year 1986 shall be used. 22
(V) If any increase determined under this section is not a multiple of fifty dollars ($50.00), 23
such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a 24
married individual filing separate return, if any increase determined under this section is not a 25
multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple 26
of twenty-five dollars ($25.00). 27
(F) Credits against tax. 28
(I) Notwithstanding any other provisions of Rhode Island Law, for tax years beginning on 29
or after January 1, 2011, the only credits allowed against a tax imposed under this chapter shall be 30
as follows: 31
(a) Rhode Island earned-income credit: Credit shall be allowed for earned-income credit 32
pursuant to subparagraph 44-30-2.6(c)(2)(N). 33
(b) Property Tax Relief Credit: Credit shall be allowed for property tax relief as provided 34
LC001550 - Page 16 of 18
in § 44-33-1 et seq. 1
(c) Lead Paint Credit: Credit shall be allowed for residential lead abatement income tax 2
credit as provided in § 44-30.3-1 et seq. 3
(d) Credit for income taxes of other states. Credit shall be allowed for income tax paid to 4
other states pursuant to § 44-30-74. 5
(e) Historic Structures Tax Credit: Credit shall be allowed for historic structures tax credit 6
as provided in § 44-33.2-1 et seq. 7
(f) Motion Picture Productions Tax Credit: Credit shall be allowed for motion picture 8
production tax credit as provided in § 44-31.2-1 et seq. 9
(g) Child and Dependent Care: Credit shall be allowed for twenty-five percent (25%) of 10
the federal child and dependent care credit allowable for the taxable year for federal purposes; 11
provided, however, such credit shall not exceed the Rhode Island tax liability. 12
(h) Tax credits for contributions to Scholarship Organizations: Credit shall be allowed for 13
contributions to scholarship organizations as provided in chapter 62 of title 44. 14
(i) Credit for tax withheld. Wages upon which tax is required to be withheld shall be taxable 15
as if no withholding were required, but any amount of Rhode Island personal income tax actually 16
deducted and withheld in any calendar year shall be deemed to have been paid to the tax 17
administrator on behalf of the person from whom withheld, and the person shall be credited with 18
having paid that amount of tax for the taxable year beginning in that calendar year. For a taxable 19
year of less than twelve (12) months, the credit shall be made under regulations of the tax 20
administrator. 21
(j) Stay Invested in RI Wavemaker Fellowship: Credit shall be allowed for stay invested in 22
RI wavemaker fellowship program as provided in § 42-64.26-1 et seq. 23
(k) Rebuild Rhode Island: Credit shall be allowed for rebuild RI tax credit as provided in 24
§ 42-64.20-1 et seq. 25
(l) Rhode Island Qualified Jobs Incentive Program: Credit shall be allowed for Rhode 26
Island new qualified jobs incentive program credit as provided in § 44-48.3-1 et seq. 27
(m) Historic homeownership assistance act: Effective for tax year 2017 and thereafter, 28
unused carryforward for such credit previously issued shall be allowed for the historic 29
homeownership assistance act as provided in § 44-33.1-4. This allowance is for credits already 30
issued pursuant to § 44-33.1-4 and shall not be construed to authorize the issuance of new credits 31
under the historic homeownership assistance act. 32
(n) Credit against tax for ABLE contributions. An employer shall be allowed a credit 33
against income tax for contributions to an eligible employee’s ABLE account, established pursuant 34
LC001550 - Page 17 of 18
to §42-7.2-20.3, for a maximum credit of two thousand dollars ($2,000) per employee, per year. 1
(2) Except as provided in section 1 above, no other state and federal tax credit shall be 2
available to the taxpayers in computing tax liability under this chapter. 3
SECTION 3. This act shall take effect upon passage. 4
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LC001550 - Page 18 of 18
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- BUSINESS CORPORATION TAX
***
This act would allow an income tax credit for employer contributions to an eligible 1
employee's ABLE account, for a maximum credit of two thousand dollars ($2,000) per employee, 2
per year. 3
This act would take effect upon passage. 4
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