2012 -- H 7309

=======

LC00499

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO TAXATION -- BUSINESS CORPORATION TAX

     Introduced By: Representatives Schadone, Nunes, and Corvese

     Date Introduced: February 01, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business

1-2

Corporation Tax" is hereby amended to read as follows:

1-3

     44-11-2. Imposition of tax. -- (a) Each corporation shall annually pay to the state a tax

1-4

equal to nine percent (9%) of net income, as defined in section 44-11-11, qualified in section 44-

1-5

11-12, and apportioned to this state as provided in sections 44-11-13 -- 44-11-15, for the taxable

1-6

year.

1-7

      (b) A corporation shall pay the amount of any tax as computed in accordance with

1-8

subsection (a) of this section after deducting from "net income," as used in this section, fifty

1-9

percent (50%) of the excess of capital gains over capital losses realized during the taxable year, if

1-10

for the taxable year:

1-11

      (1) The corporation is engaged in buying, selling, dealing in, or holding securities on its

1-12

own behalf and not as a broker, underwriter, or distributor;

1-13

      (2) Its gross receipts derived from these activities during the taxable year amounted to at

1-14

least ninety percent (90%) of its total gross receipts derived from all of its activities during the

1-15

year. "Gross receipts" means all receipts, whether in the form of money, credits, or other valuable

1-16

consideration, received during the taxable year in connection with the conduct of the taxpayer's

1-17

activities.

1-18

      (c) A corporation shall not pay the amount of the tax computed on the basis of its net

1-19

income under subsection (a) of this section, but shall annually pay to the state a tax equal to ten

1-20

cents ($.10) for each one hundred dollars ($100) of gross income for the taxable year or a tax of

2-1

one hundred dollars ($100), whichever tax shall be the greater, if for the taxable year the

2-2

corporation is either a "personal holding company" registered under the federal Investment

2-3

Company Act of 1940, 15 U.S.C. section 80a-1 et seq., "regulated investment company", or a

2-4

"real estate investment trust" as defined in the federal income tax law applicable to the taxable

2-5

year. "Gross income" means gross income as defined in the federal income tax law applicable to

2-6

the taxable year, plus:

2-7

      (1) Any interest not included in the federal gross income; minus

2-8

      (2) Interest on obligations of the United States or its possessions, and other interest

2-9

exempt from taxation by this state; and minus

2-10

      (3) Fifty percent (50%) of the excess of capital gains over capital losses realized during

2-11

the taxable year.

2-12

      (d) (1) A small business corporation having an election in effect under subchapter S, 26

2-13

U.S.C. section 1361 et seq., shall not be subject to the Rhode Island income tax on corporations,

2-14

except that the corporation shall be subject to the provisions of subsection (a), to the extent of the

2-15

income that is subjected to federal tax under subchapter S.

2-16

      (2) The shareholders of the corporation who are residents of Rhode Island shall include

2-17

in their income their proportionate share of the corporation's federal taxable income.

2-18

      (3) [Deleted by P.L. 2004, ch. 595. art. 29, section 1.]

2-19

      (4) [Deleted by P.L. 2004, ch. 595, art. 29, section 1.]

2-20

      (e) Minimum tax. The tax imposed upon any corporation under this section shall not be

2-21

less than five hundred dollars ($500) two hundred fifty dollars ($250).

2-22

     SECTION 2. This act shall take effect upon passage.

=======

LC00499

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION -- BUSINESS CORPORATION TAX

***

3-1

     This act would reduce the corporate minimum tax from five hundred dollars ($500) to

3-2

two hundred fifty dollars ($250).

3-3

     This act would take effect upon passage.

=======

LC00499

=======