2016 -- S 2271

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LC004316

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- TAXATION

     

     Introduced By: Senators McCaffrey, and Lombardi

     Date Introduced: February 09, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 7-12-60 of the General Laws in Chapter 7-12 entitled

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"Partnerships" is hereby amended to read as follows:

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     7-12-60. Filing of returns with the tax administrator -- Annual charge. -- (a) For tax

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years beginning on or after January 1, 2012 a limited liability partnership registered under § 7-12-

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56, shall file a return in the form and containing the information as prescribed by the tax

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administrator as follows:

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      (1) If the fiscal year of the limited liability partnership is the calendar year, on or before

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the fifteenth (15th) day of April in the year following the close of the fiscal year; and

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      (2) If the fiscal year of the limited liability partnership is not a calendar year, on or

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before the fifteenth (15th) day of the fourth (4th) month following the close of the fiscal year.

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      (b) An annual charge, equal to the minimum tax imposed upon a corporation under

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subsection 44-11-2(e), shall be due on the filing of the limited liability partnership's return filed

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with the tax administrator and shall be paid to the division of taxation.

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      (c) The annual charge is delinquent if not paid by the due date for the filing of the return

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and an addition of one hundred dollars ($100) to the charge is then due.

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     SECTION 2. Section 7-13-69 of the General Laws in Chapter 7-13 entitled "Limited

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Partnerships" is hereby amended to read as follows:

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     7-13-69. Filing of returns with the tax administrator -- Annual charge. -- (a) For tax

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years beginning on or after January 1, 2012 a limited partnership certified under this chapter shall

 

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file a return in the form and containing the information as prescribed by the tax administrator as

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follows:

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      (1) If the fiscal year of the limited partnership is the calendar year, on or before the

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fifteenth (15th) day of April in the year following the close of the fiscal year; and

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      (2) If the fiscal year of the limited partnership is not a calendar year, on or before the

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fifteenth (15th) day of the fourth (4th) month following the close of the fiscal year.

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      (b) An annual charge, equal to the minimum tax imposed upon a corporation under

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subsection 44-11-2(e), shall be due on the filing of the limited partnership's return filed with the

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tax administrator and shall be paid to the division of taxation.

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      (c) The annual charge is delinquent if not paid by the due date for the filing of the return

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and an addition of one hundred dollars ($100) to the charge is then due.

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     SECTION 3. Section 7-16-67 of the General Laws in Chapter 7-16 entitled "The Rhode

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Island Limited Liability Company Act" is hereby amended to read as follows:

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     7-16-67. Filing of returns with the tax administrator -- Annual charge. -- (a) A return

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in the form and containing the information as the tax administrator may prescribe shall be filed

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with the tax administrator by the limited liability company:

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      (1) In case the fiscal year of the limited liability company is the calendar year, on or

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before the fifteenth day of March in the year following the close of the fiscal year; and

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      (2) In case the fiscal year of the limited liability company is not a calendar year, on or

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before the fifteenth day of the third month following the close of the fiscal year.

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      (b) An annual charge shall be due on the filing of the limited liability company's return

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filed with the tax administrator and shall be paid to the Division of Taxation as follows:

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      (1) If the limited liability company is treated as a corporation for purposes of federal

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income taxation, it shall pay the taxes as provided in chapters 11 and 12 of title 44; or .

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      (2) If the limited liability company is not treated as a corporation for purposes of federal

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income taxation, it shall pay a fee in an amount equal to the minimum tax imposed upon a

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corporation under § 44-11-2(e). The due date for a limited liability company that is not treated as

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a corporation for purposes of federal income taxation shall be on or before the fifteenth (15th) day

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of the fourth (4th) month following the close of the fiscal year.

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      (c) The annual charge is delinquent if not paid by the due date for the filing of the return

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and an addition of one hundred dollars ($100.00) to the charge is then due.

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     SECTION 4. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business

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Corporation Tax" is hereby amended to read as follows:

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     44-11-2. Imposition of tax. [Effective January 1, 2016.] -- (a) Each corporation shall

 

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annually pay to the state a tax equal to nine percent (9%) of net income, as defined in § 44-11-11,

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qualified in § 44-11-12, and apportioned to this state as provided in §§ 44-11-13 -- 44-11-15, for

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the taxable year. For tax years beginning on or after January 1, 2015, each corporation shall

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annually pay to the state a tax equal to seven percent (7.0%) of net income, as defined in § 44-11-

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13 - 44-11-15, for the taxable year.

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

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

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

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for the taxable year:

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

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

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

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

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

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

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activities.

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

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

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

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

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

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

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

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

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taxable year, plus:

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

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

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exempt from taxation by this state; and minus

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

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the taxable year.

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

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

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

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that is subjected to federal tax under subchapter S. Effective for tax years beginning on or after

 

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January 1, 2015, a small business corporation having an election in effect under subchapter S, 26

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U.S.C. § 1261 et seq., shall be subject to the minimum tax under § 44-11-2(e).

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

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

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

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

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      (e) Minimum tax. - The tax imposed upon any corporation under this section, including a

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small business corporation having an election in effect under subchapter S, 26 U.S.C. § 1361 et

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seq., shall not be less than four hundred fifty dollars ($450).

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     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- TAXATION

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     This act would repeal the four hundred fifty dollars ($450) minimum tax on corporations,

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limited liability companies and limited partnerships.

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     This act would take effect upon passage.

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