PROVIDENCE – Rep. Deborah Ruggiero, D-Jamestown, has proposed legislation that would give startup businesses a break by suspending the minimum corporate tax for the first three years of a business’ existence.
Rhode Island taxes businesses’ net income at a rate of 9 percent. A provision in the corporate tax law imposes a $500 floor on that tax, so if 9 percent of a business’ net income equals less than $500, that business is charged $500, according to a statement from Ruggiero.
Her legislation would add an exception to the minimum corporate tax for each business’ first three tax years. It would keep the minimum tax in place for businesses that are in the their fourth year or more, and it would not affect businesses that are under 3 years old but are profitable enough to pay more than the minimum tax.
“With a relatively small investment on the state’s part, this is a way we can encourage entrepreneurs to develop their business in Rhode Island,” she said. •