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NEW: Bill Would Reduce/Eliminate Minimum Corporate Tax

Friday, February 01, 2013

 

As Rhode Island attempts to continue its recovery through the recent economic downturn, one of the issues Republican, Tea-Party and other similar tax opponents point to as a major hurdles to small businesses starting up in the state is a minimum $500 corporations franchise tax payment that all businesses in RI are required to pay each year.

If one General Assembly member has his way, however, that burden may soon be less of an obstacle.

Senator David E. Bates, a Republican from District 32 (Barrington, Bristol and East Providence) introduced a bill this week that would allow start-up companies a three-year grace period before the tax is imposed and would reduce the minimum franchise tax to $100 per employee for up to four employees.

“This legislation is going to help small and new businesses in Rhode Island, the kinds of businesses that employ so many state residents and the kinds of companies that we want to attract to our state,” Bates said. “A $500 minimum corporation franchise tax is a significant amount to many small, start-up companies and is money they could more wisely use to make payroll or reinvest in their company.”

Bates says he knows that the legislation would lower the amount of tax revenue taken in by Rhode Island but says “what is most important is that we provide a boost to small and start-up concerns.”

“If we are serious about growing jobs in Rhode Island and if we are serious about making it easier for entrepreneurs to start and grow businesses here, then reducing the cost for small businesses to operate should be one of our foremost goals,” he said.

The bill, which has been co-sponsored by Senators Louis DiPalma, William Walaska, Frank Lombardo and Senate Majority Leader Dominick Ruggerio, has been referred to the Senate Committee on Corporations.
Bates said his legislation is proof that the State Senate’s main focus is to “make it easy to do business in Rhode Island.”

“We know Rhode Island has a less than wonderful reputation as a business friendly state, but that is changing with the various reforms and new laws that have been enacted the past few legislative sessions,” Walaska added. “This bill is another example of how we can help cut costs for those businesses already here and make it more attractive and less expensive for new businesses to start and grow.”
 

 

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