AN ACT RELATING TO TAXATION -- BUSINESS CORPORATION TAX (Repeals the corporation minimum tax.)

S2022

2026 -- S 2022
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO TAXATION -- BUSINESS CORPORATION TAX

Introduced By:
Senators de la Cruz, Rogers, Ciccone, Tikoian, Burke, E Morgan, and
Paolino

Date Introduced:
January 09, 2026

Referred To:
Senate Finance
It is enacted by the General Assembly as follows:
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SECTION 1. 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.
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(a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net
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income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as provided
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in §§ 44-11-13 — 44-11-15, for the taxable year. For tax years beginning on or after January 1,
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2015, each corporation shall annually pay to the state a tax equal to seven percent (7.0%) of net
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income, as defined in § 44-11-13 — 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) after deducting from “net income,” as used in this section, fifty percent (50%) of the
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excess of capital gains over capital losses realized during the taxable year, if 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 year.
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“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), 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
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($100), whichever tax shall be the greater, if for the taxable year the corporation is either a “personal
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holding company” registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-
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1 et seq., “regulated investment company,” or a “real estate investment trust” as defined in the
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federal income tax law applicable to the taxable year. “Gross income” means gross income as
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defined in the federal income tax law applicable to the 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 exempt
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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 the
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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. § 1361 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 in
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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). For tax years beginning on or after
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January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400).
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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 -- BUSINESS CORPORATION TAX
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This act would repeal the corporation minimum tax.
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This act would take effect upon passage.
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