Rhode Island Adopts Combined Reporting, Single Sales Factor Apportionment And Market-Based Sourcing

Rhode Island Governor Lincoln Chafee signed budget legislation June 19 enacting various tax provisions, including the adoption of unitary combined reporting, a single sales factor for corporate income tax apportionment purposes, and market-based sourcing of sales of items other than tangible personal property.¹ The legislation also reduces the corporate income tax rate, repeals the franchise tax, eliminates the captive real estate investment trust (REIT) and related-party addback provisions, and modifies various sales tax provisions.

Income Tax Rate

For years beginning on or after January 1, 2015, the corporate income tax rate is reduced from 9 percent of net income to 7 percent of net income.²