The bill amends Section 44-11-11 of the General Laws in Chapter 44-11 entitled "Business Corporation Tax" to redefine "net income" for corporate taxpayers. It specifies that "net income" includes taxable income under U.S. law, with additions such as interest not included in taxable income, specific exemptions, and the tax imposed by the chapter itself. Notably, it adds the amount of any Paycheck Protection Program (PPP) loan forgiven for federal income tax purposes that exceeds $250,000 to the taxable income. It also outlines the conditions for net operating loss deductions, which align with federal law but with certain adjustments and limitations specific to Rhode Island. The bill also states that Domestic International Sales Corporations (DISCs) and Foreign Sales Corporations (FSCs) will be treated as per federal income tax law, and shareholders' income from these corporations will be treated accordingly.

The bill introduces a new subsection (f), which allows cannabis establishments, as defined in § 21-28.11-3, to claim deductions to income that would be allowable under U.S. laws but are disallowed by 26 U.S.C. § 280E. This change would enable cannabis businesses to take deductions similar to other businesses, which they are currently unable to do due to federal restrictions on cannabis. The bill would take effect upon passage, and the legislative council explains that the purpose of the act is to adjust the taxation of cannabis establishments in relation to business corporation tax.

Statutes affected:
7024: 44-11-11