Bill > S1045

This bill modifies Rhode Island's business corporation tax law to provide a specific tax exemption for new subchapter S corporations. A subchapter S corporation is a type of small business corporation that allows income, losses, deductions, and credits to be passed directly to shareholders for tax purposes. The bill adds a provision that exempts these small business corporations from paying the state's minimum tax of $400 during their first year of existence when a tax return is due. Specifically, the bill amends section 44-11-2 of the state's General Laws to insert language that prevents newly formed subchapter S corporations from being required to pay the minimum tax in their initial year of operation. This change is designed to reduce the financial burden on new small businesses by providing a tax relief mechanism during their first year, potentially encouraging entrepreneurship and business formation in the state. The bill will take effect immediately upon passage.

Budget and Finance

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