AN ACT RELATING TO TAXATION -- BUSINESS CORPORATION TAX

SB 1045 exempts new subchapter S corporations (S corporations) in their first year of operation from paying Rhode Island's minimum corporate tax of $400. This applies to businesses that elect S corporation status under federal tax law and file their first state tax return. The bill specifically removes the requirement for these new entities to pay the minimum tax during their initial taxable year, though they remain subject to the regular 7% income tax on profits. The exemption takes effect immediately upon passage, affecting only first-year S corporations.