Rep. Craven calls for elimination of minimum corporate tax
STATE HOUSE – The state’s current operating budget includes a provision that had been championed during the recent legislative session by Rep. Robert E. Craven. His bill, eventually rolled into the budget bill enacted earlier this year, raised the threshold on the state’s estate tax.
The goal in pushing that tax change, said Representative Craven (D-Dist. 32, North Kingstown), was to offer tax fairness to small business owners and moderate-income families who may have some assets to pass on to their children.
In his continuing effort to make Rhode Island a more tax-friendly state, Representative Craven has announced plans to introduce legislation when the Assembly returns in January that will eliminate the state’s minimum business corporation tax.
Under the state’s existing tax structure, all Rhode Island businesses face a minimum $500 per year corporations tax, beginning from the date the business incorporates with the Secretary of State.
“As a leading voice in the General Assembly on personal and business tax reform, I believe it is important to weigh the good that would result from eliminating this minimum tax compared to the amount of money the tax generates,” said Representative Craven. “With our current and continuing efforts to attract business to the state, I don’t find it productive to tell a company relocating or opening here that the state is going to charge $500 a year just so they can be in business.”
Representative Craven said his proposal is another way to build on the various reforms and initiatives that have been enacted the past few years to make Rhode Island a good place to run a business. “This proposal is designed to assist all businesses, but especially those small, start-up firms that could better use $500 to build their business. Reducing the cost for small companies and doing away with fiscal impediments for people considering opening a business in Rhode Island will have longer-term benefits for Rhode Island. Making it easier and less expensive for companies to operate here will help them succeed, meaning more jobs for more Rhode Islanders and an overall improvement in the state’s economic picture.”
Representative Craven, who is in his first term in the House of Representatives, is the Chairman of the House Committee on Municipal Government and a member of the House Committee on Judiciary and the House Committee on Small Business.
The estate tax (sometimes called the “death tax”) threshold was raised to $1.5 million from its previous limit of about $921,000. The increase was coupled with the elimination of the so-called cliff, which requires heirs to pay tax on an estate if its value is greater than the established threshold. Now, as a result of the Craven budget item, any tax liability on an estate valued at more than $1.5 million will be applied only to the amount over the $1.5 million. (As had been the case with existing law, the new $1.5 million threshold will be adjusted annually based on the consumer price index.)
“If we want our economy to improve, we have to find ways to make our tax structure fair and commensurate with that of other states. And we have to actively encourage new and more companies to call Rhode Island home,” said Representative Craven. “I am confident my proposal to eliminate the minimum corporation tax will play a role in helping businesses grow and succeed.”
For more information, contact:
Randall T. Szyba, Publicist
State House Room 20
Providence, RI 02903