Senator Nicholas D. Kettle, (R-Dist. 21, Coventry, Foster, Scituate, West Greenwich) last week introduced legislation that would eliminate the $500 minimum business corporation tax.
Rhode Island annually levies a corporate income tax equal to nine percent of net income. Under current statute, corporations must pay the state at least $500, regardless of their income. Based on data from 2007, 93 percent of the state’s 50,605 corporate filers claimed the minimum tax liability. That figure only represented 18.8 percent of collections.
“It’s exactly this kind of tax that makes it difficult for businesses to afford to operate in Rhode Island,” Kettle said.
Eliminating the $500 minimum would keep $23 million in the hands of local businesses. Should the bill, 2014-S2021, be approved by the Assembly, it would take effect upon passage and would apply to the 2014 calendar year.
Kettle named the elimination of the business corporation tax as one of his top priorities for this legislative session.