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%) of 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 S election will not be subject to the Rhode Island income tax on corporations, except for income that is federally taxed under subchapter S. 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.

Furthermore, the bill includes a significant exemption for small business corporations with an S election, stating that they will not be required to pay the minimum tax in their first year of existence when a tax return is due. This change aims to alleviate the financial burden on new small businesses, encouraging their growth and sustainability. The act will take effect upon passage.

Statutes affected:
1045: 44-11-2