|
|
6/13/2024
|
General Assembly passes bill to make Rhode Island’s banking tax structure more competitive
|
STATE HOUSE — After months of evaluating its merits in the House and Senate finance committees, the General Assembly today passed legislation introduced by Sen. Louis P. DiPalma and Rep. Joseph J. Solomon Jr. to make Rhode Island’s banking tax structure more competitive with other states.
The legislation (2024-H 7927A, 2024-S 3152A) would allow financial institutions such as Citizens Bank and others to elect a single sales factor apportionment methodology for calculating corporate income tax, creating parity between Rhode Island and other states.
“Not only does this bill level the playing field with Massachusetts and Connecticut, keeping the industry competitive, but it also puts the banking industry on equal footing with other corporations in the state,” said Senator DiPalma (D-Dist. 12, Middletown, Little Compton, Newport, Tiverton), who chairs the Senate Finance Committee. “It aligns with the method of sourcing income that Massachusetts has just adopted and will put into effect on Jan. 1.”
Rhode Island currently uses a three-factor apportionment for financial institutions, a method that determines tax based on a company’s property, payroll and sales. Beginning in January 2025, Massachusetts will shift to the single sales factor methodology. Rhode Island has used the single sales factor method for other corporate taxpayers since 2015.
“Single factor has become a much more common way for states sourcing income for the companies that do business there, and that will keep Rhode Island competitive and fair,” said Representative Solomon (D-Dist. 22, Warwick), who introduced the first iteration of the bill in February. “This may be one of the most well-vetted bills in the history of the House of Representatives. It has had multiple hearings in the finance committees of both chambers, allowing us to look at an important piece of legislation from many different angles and come up with a bill that is fair and a procedure that is very transparent.”
“I worked very hard over the last few weeks with the Governor’s team and the Senate to amend legislation that will keep Rhode Island’s banking tax structure competitive with Massachusetts,” said Speaker of the House K. Joseph Shekarchi (D-Dist. 23, Warwick). “The House Finance Committee heard three different versions of this bill, reinforcing my insistence that this proposal be carefully vetted in a public and transparent manner.”
“This change will put Rhode Island on a level playing field with Massachusetts and help ensure we keep good jobs here in our state,” said Senate President Dominick J. Ruggerio (D-Dist. 4, North Providence, Providence). “I am grateful for the hard work of Governor Dan McKee and Speaker Joseph Shekarchi, and for all the parties who worked together to ensure the continued economic competitiveness of our state.”
The measure now moves to the governor’s office.
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903
(401)222-1922
|
|