The bill amends Section 44-11-2 of the General Laws regarding the Business Corporation Tax in Rhode Island. It introduces a new provision that establishes a tax rate of seven percent (7.0%) on net income for corporations for tax years beginning on or after January 1, 2015, down from the previous rate of nine percent (9%). Additionally, it specifies that small business corporations with an election under subchapter S of the federal tax code will not be subject to the Rhode Island income tax on corporations, except for income that is federally taxed. The bill also modifies the minimum tax requirement, reducing it from four hundred fifty dollars ($450) to four hundred dollars ($400) for tax years starting on or after January 1, 2017, while providing an exemption for small business corporations in their first year of existence.

Furthermore, the bill includes several deletions from the current law, specifically removing references to previous provisions that are no longer applicable. The new language inserted clarifies the tax imposition and the conditions under which small business corporations are taxed, ensuring that they are not required to pay the minimum tax in their first year. Overall, the bill aims to provide tax relief for small businesses while updating the tax structure for corporations in Rhode Island.