H5403 is a Rhode Island tax bill that amends the Business Corporation Tax statute to repeal the corporation minimum tax. Under current law, most corporations are subject to the state corporate income tax, but the statute also imposes a floor so that the tax cannot be less than $400 for tax years beginning on or after January 1, 2017. This bill would remove that minimum-tax requirement, while leaving the rest of the corporate tax structure in place, including the general 7% corporate income tax rate, special rules for certain securities dealers, investment companies, real estate investment trusts, and the treatment of S corporations.
If enacted, the bill would change Rhode Island law by eliminating the statutory minimum tax liability for corporations, including S corporations subject to the minimum tax. Corporations with very low taxable income, or those that otherwise would have owed only the minimum amount, could see their state tax liability reduced to zero or to the amount calculated under the ordinary corporate tax rules. The bill takes effect immediately upon passage.
The available context shows no recorded committee testimony or votes, so there is no documented debate in the provided materials. The bill’s stated purpose is straightforward: repeal the corporation minimum tax. That suggests the measure is primarily a tax relief or tax reduction proposal for businesses rather than a broader restructuring of corporate taxation.
Because there are no transcripts or vote records, no specific supporters or opponents are identified in the provided materials. Based on the text alone, the likely point of policy contention is whether eliminating the minimum tax would provide needed relief to small and low-profit corporations or, conversely, reduce state revenue and allow some corporations to pay no tax at all despite remaining subject to the corporate tax system.
Impact
The bill would amend § 44-11-2 of the Rhode Island General Laws by deleting the minimum corporate tax floor of $400, thereby changing the Business Corporation Tax for all corporations subject to that section, including S corporations. The general corporate income tax framework, special rules for certain financial and investment entities, and other apportionment and income provisions would remain unchanged. The practical effect would be to lower or eliminate tax liability for corporations whose computed tax is below the current minimum, with corresponding revenue implications for the state.
Sentiment
The provided record contains no committee transcript or vote history, so there is no direct evidence of legislative debate or formal sentiment from the hearing process. The bill title and explanation indicate a clear pro-business, tax-reduction objective: repealing the corporation minimum tax. In the absence of recorded opposition or support, the overall sentiment can only be characterized as a straightforward proposal to reduce corporate tax burdens, with the usual policy tradeoff between business relief and state revenue.
Contention
The main policy issue is the repeal of the minimum tax itself. Supporters would likely view the minimum as an unfair tax on corporations with little or no income and argue that removing it helps small businesses and low-margin firms. Opponents would likely focus on the loss of guaranteed revenue and the possibility that some corporations could owe no state tax even while remaining active in Rhode Island. No specific individuals, organizations, or committee members are identified in the provided materials as taking either side.