2015 -- S 0651

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LC002078

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION - BUSINESS CORPORATION TAX

     Introduced By: Senators Goldin, Goodwin, Ruggerio, DaPonte, and Miller

     Date Introduced: March 11, 2015

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 44-11 of the General Laws entitled "Business Corporation Tax" is

hereby amended by adding thereto the following section:

     44-11-29.2. Notice to tax administrator of sale of controlling interest - Tax due. -- (a)

The sale or transfer of a controlling interest in any entity for valuable consideration, which

possesses, directly or indirectly, an interest in real property in this state, shall be fraudulent and

void as against the state unless the entity shall, within five (5) days after the sale or transfer,

notify the tax administrator of the sale or transfer and of the price, terms and conditions of the

sale or transfer, and of the character and location of the assets of the entity. Whenever an entity

shall make such a sale or transfer, there is imposed on the sale or transfer, payable by the entity

selling or transferring such controlling interest, a tax at the rate set forth in § 44-25-1(a) on the

interest in real property possessed, directly or indirectly, by such entity. Whenever an entity shall

make such a sale or transfer, the tax imposed by this section shall become due and payable at the

time when the tax administrator is notified, or, if he or she is not notified, at the time when he or

she should have been notified.

     (b) A taxable sale or transfer of a controlling interest may occur in one transaction or in a

series of transactions. Transactions which occur within two (2) years of each other are presumed,

unless shown to the contrary, to be a series of transactions subject to the tax.

     (c) A taxable sale or transfer of a controlling interest may be made by one seller or

transferor, or may be made by a group of sellers or transferors acting in concert. Sellers or

transferors who are related to each other by blood or marriage are presumed, unless shown to the

contrary, to be acting in concert.

     (d) The tax administrator shall contribute to the distressed community relief program the

sum as set forth in § 44-25-l(c) to be distributed pursuant to § 45-13-12 and to the housing

resources commission restricted receipts account the sum as set forth in § 44-25-l(c). Funds will

be administered by the department of administration, office of housing and community

development, through the housing resources commission. The state shall retain sixty cents ($.60)

for state use. The balance of the tax shall be remitted to the municipality in which said real estate

is located. The tax shall be administered and collected under the provisions of this chapter.

     (e) For the purposes of this section the term "controlling interest" means:

     (1) In the case of a corporation, fifty percent (50%) or more of the total combined voting

power of all classes of stock of such corporation; or

     (2) In the case of a partnership, association, trust or other entity, fifty percent (50%) or

more of the capital, profits or beneficial interest in such partnership, association, trust, or other

entity.

     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 - BUSINESS CORPORATION TAX

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     This act would provide that the tax administrator be notified of the sale or transfer of a

controlling interest in any entity which owns real property in the state, and also imposes a transfer

tax on the seller of such controlling interest.

     This act would take effect upon passage.

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LC002078

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