Tax News

CCH (cch.taxgroup.com) reports:

The Rhode Island House of Representatives and the Rhode Island Senate have passed legislation proposing various changes to corporate and personal income, and public utilities taxes.
One of the proposed changes in the budget bill would, if enacted, halt the phase out of the long-term capital gains tax on the gain from the sale of certain capital assets held more than five years. The rates, which are set to be phased out by 2008, would be frozen at current levels.
Proposed changes to corporate income tax would include eliminating the tax benefits for captive real estate investment trusts (REITs). Captive REITs would be required to add back the amount of the federal dividends received deduction.
Another proposed change to the corporate income tax would require corporations using passive investment companies formed outside Rhode Island to add back such intangible investment deductions to net income. The addback requirement would be effective for tax years beginning after 2007 and would have several exceptions.
Finally, legislation, if enacted, would modify Rhode Island's apportionment formula, which currently allows the sales portion of the formula to be taxed by the state of destination. The formula would be changed to require gross sales of tangible personal property shipped from an office, store, warehouse, factory, or other place of storage in Rhode Island to be "thrown back" and included as Rhode Island sales for purposes of computing the sales factor.
Another proposed amendment would postpone the imposition of the gas and electric utilities tax to be used for an affordable energy fund until 2009. The offsetting tax credits would also be postponed for the same time period.
The legislation, if enacted, would create the "Outpatient Health Care Facility Surcharge Act," which would impose a surcharge of 2% on the gross patient revenue received each month by every outpatient health care facility. The proposed "Imaging Services Surcharge Act" would also impose a surcharge of 2% on the net patient revenue received each month by providers of imaging services.
Subscribers to CCH Tax Research NetWork may read the tax portion of the bill.

H.B. 5300, Substitute A, as passed by the Rhode Island House of Representatives on June 16, 2007, and as passed by the Rhode Island Senate on June 19, 2007.