2013 -- S 0011

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION - FRANCHISE TAX

     Introduced By: Senators Bates, DiPalma, Walaska, Lombardo, and Ruggerio

     Date Introduced: January 16, 2013

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-12-1 of the General Laws in Chapter 44-12 entitled "Franchise

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Tax" is hereby amended to read as follows:

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     44-12-1. Tax imposed -- Corporations liable -- Credit for tax on income -- Reduced

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rate where no business done. -- (a) Every corporation, joint-stock company, or association

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incorporated in this state or qualified to do business in this state, whether or not doing business

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for profit, all referred to in this section under the term "corporation", except those enumerated in

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section 44-12-11, shall pay an annual franchise tax to the state upon its authorized capital stock of

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two dollars fifty cents ($2.50) for each ten thousand dollars ($10,000) or fractional part, or the

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sum of five hundred dollars ($500), whichever is greater; reduced however, by a credit, not to

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exceed four hundred dollars ($400), of one hundred dollars ($100) for each employee of such

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entity as of the last day of its preceding tax year.

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      (b) In the case of corporations liable to a tax under chapter 11 of this title, only the

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amount by which the franchise tax exceeds the tax payable under that chapter shall be assessed.

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      (c) If a corporation shall show by supplemental affidavit attached to the prescribed return

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and signed in the manner provided for each return that it has not, at any time during its preceding

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taxable year, been engaged within the state in any business activities, it shall only pay an annual

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franchise tax upon its authorized capital stock at the following rates: five hundred dollars ($500)

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where the stock does not exceed one million dollars ($1,000,000); and the further sum of twelve

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dollars fifty cents ($12.50) for each additional one million dollars ($1,000,000) or fractional part

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of the stock.

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     (d) Notwithstanding any other provisions of this section or the general or public laws to

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the contrary, no entity liable for the tax set forth in this section shall be required to pay such tax

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for the tax year in which it was formed, or for the two (2) tax years immediately following.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - FRANCHISE TAX

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     This act would provide each corporation with a credit against the franchise tax, not to

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exceed four hundred dollars ($400), of one hundred dollars ($100) for each employee of such

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entity as of the last day of its preceding tax year. It would further exempt any corporation from

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the payment of the franchise tax in the first three (3) years of its incorporation.

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     This act would take effect upon passage.

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