The bill amends the General Laws regarding the taxation of banks, specifically sections 44-14-13 and 44-14-14.1, to introduce new provisions for the deduction of business expenses and the apportionment and allocation of income for tax purposes. It allows for the deduction of ordinary and necessary business expenses with certain exclusions and details the treatment of transactions between taxpayers and members of a unitary business, effective for tax years beginning on or after January 1, 2025. The bill also outlines the method for banking institutions to allocate and apportion net income when business activity is taxable both within and outside the state, with provisions for alternative methods if standard provisions do not fairly represent the taxpayer's business activity in the state.

Additionally, the bill introduces a new section, § 44-14-14.3, allowing banking institutions to elect to allocate and apportion their net income using a receipts factor for tax years beginning on or after January 1, 2025. It mandates a combined reporting study for banking institutions that are part of a unitary business and establishes penalties for failure to file or filing false reports. The bill also amends Chapter 35-6, detailing the duties of the controller, including the creation of a special fund for deferred contributions and the management of excess general revenues. Sections 1 and 2 of the act will take effect on January 1, 2025, while Section 3 will take effect upon passage.

Statutes affected:
3152  SUB A: 35-6-1