2017 -- S 0465

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LC001406

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO CORPORATION, ASSOCIATIONS AND PARTNERSHIPS -- TAXATION

     Introduced By: Senators McCaffrey, and Lombardi

     Date Introduced: March 02, 2017

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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

"Partnerships" is hereby amended to read as follows:

     7-12-60. Filing of returns with the tax administrator -- Annual charge.

     (a) For tax years beginning on or after January 1, 2012, a limited liability partnership

registered under § 7-12-56, shall file a return in the form and containing the information as

prescribed by the tax administrator as follows:

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

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

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

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

     (b) For tax years beginning after December 31, 2015, a limited liability partnership

registered under § 7-12-56, shall file a return, in the form and containing the information as

prescribed by the tax administrator, and shall be filed on or before the date a federal tax return is

due to be filed, without regard to extension.

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

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

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

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

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

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

Partnerships" is hereby amended to read as follows:

     7-13-69. Filing of returns with the tax administrator -- Annual charge.

     (a) For tax years beginning on or after January 1, 2012, a limited partnership certified

under this chapter shall file a return, in the form and containing the information as prescribed by

the tax administrator, as follows:

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

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

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

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

     (b) For tax years beginning after December 31, 2015, a limited partnership certified under

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

administrator, and shall be filed on or before the date a federal tax return is due to be filed,

without regard to extension.

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

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

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

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

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

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

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

     7-16-67. Filing of returns with the tax administrator -- Annual charge.

     (a) A return, in the form and containing the information as the tax administrator may

prescribe, shall be filed with the tax administrator by the limited liability company:

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

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

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

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

     (b) For tax years on or after January 1, 2016, a return, in the form and containing the

information as the tax administrator may prescribe, shall be filed with the tax administrator by the

limited liability company and shall be filed on or before the date a federal tax return is due to be

filed, without regard to extension.

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

filed with the tax administrator and shall be paid to the division of taxation as follows: (1) If if the

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limited liability company is treated as a corporation for purposes of federal income taxation, it

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

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

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

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

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

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

     (d) For tax years on or after January 1, 2016, a return, in the form and containing the

information as the tax administrator may prescribe, shall be filed with the tax administrator by the

limited liability company and shall be filed on or before the date a federal tax return is due to be

filed, without regard to extension.

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

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

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

Corporation Tax" is hereby amended to read as follows:

     44-11-2. Imposition of tax. [Effective January 1, 2017.]

     (a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net

income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as

provided in §§ 44-11-13 -- 44-11-15, for the taxable year. For tax years beginning on or after

January 1, 2015, each corporation shall annually pay to the state a tax equal to seven percent

(7.0%) of net income, as defined in § 44-11-13 -- 44-11-15, for the taxable year.

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

subsection (a) after deducting from "net income," as used in this section, fifty percent (50%) of

the excess of capital gains over capital losses realized during the taxable year, if for the taxable

year:

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

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

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

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

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

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

activities.

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

income under subsection (a), but shall annually pay to the state a tax equal to ten cents ($.10) for

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

dollars ($100), whichever tax shall be the greater, if for the taxable year the corporation is either a

"personal holding company" registered under the federal Investment Company Act of 1940, 15

U.S.C. § 80a-1 et seq., "regulated investment company", or a "real estate investment trust" as

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

income as defined in the federal income tax law applicable to the taxable year, plus:

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

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

exempt from taxation by this state; and minus

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

the taxable year.

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

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

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

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

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

U.S.C. § 1361 et seq., shall be subject to the minimum tax under § 44-11-2(e).

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

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

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

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

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

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

seq., shall not be less than four hundred fifty dollars ($450). For tax years beginning on or after

January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400).

     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 CORPORATION, ASSOCIATIONS AND PARTNERSHIPS -- TAXATION

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     This act would repeal the minimum tax on corporations, limited liability companies and

limited partnerships.

     This act would take effect upon passage.

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