Rhode Island Code of Regulations › Title 280 - Department of Revenue › Chapter 20 - Division of Taxation › Subchapter 25 - Business Corporation Tax › Part 9 - Apportionment of Net Income (280-RICR-20-25-9) › Section 280-RICR-20-25-9.6 - Apportionment - Generally

Current through June 14, 2024
A. Purpose of
				 Apportionment. The purpose of apportionment is to determine the amount of
				 income attributable to Rhode Island by any taxpayer under the Rhode Island
				 General Laws.
B. Business Income
				 vs. Non-Business Income. Rhode Island does not distinguish between business
				 income and non-business income for formulary apportionment purposes.
C. Combined Group Members' Share of Tax. The
				 use of a combined report does not disregard the separate identities of the
				 taxpayer members of the combined group. Each taxpayer member is responsible for
				 tax based on its taxable income or loss apportioned to this state. Thus, only
				 those members in a combined group that have corporate income tax nexus with
				 Rhode Island shall be assessed a tax on the combined group's Rhode
				 Island-apportioned net income. Any member in a combined group that lacks
				 corporate income tax nexus with Rhode Island shall not be responsible for the
				 tax assessed on the combined group.
D. Apportionment of Income Derived Entirely
				 Within State. In the case of any taxpayer, including a C corporation, deriving
				 all its income from sources within this state, or engaging in activities or
				 transactions wholly within this state for the purpose of profit or gain, or
				 where said taxpayer does not have a regular place of business outside of this
				 state other than a statutory office, one hundred (100%) percent of its net
				 income shall be apportioned to this state.
1.
				 Note. For tax years beginning on or after January 1, 2015, any corporation that
				 independently meets the criteria set forth in §
											9.6(D)     of
				 this Part, but which is also a member in a combined group subject to R.I. Gen.
				 Laws Chapter 44-11 that derives income from sources both within and outside of
				 this state for the purpose of profit or gain, shall be included in the combined
				 group's combined return.
2.
				 Examples.
a. During the 2014 through 2016 tax
				 years, Independent Man Corp., a Rhode Island C corporation unaffiliated with
				 any other business entity, derives 100% of its income from the sale of yellow
				 and green paper cups. For tax years 2014 through 2016, all of Independent Man
				 Corp.'s income shall be apportioned to Rhode Island.
3. For tax year 2017, Independent Man Corp.
				 is acquired by Lemon, Inc. and becomes part of a combined group with multiple
				 members, not all of whom derive income entirely from Rhode Island sources. A
				 combined return must be filed with the Division of Taxation on behalf of the
				 combined group. The combined group derives only a portion of its income from
				 Rhode Island sources, but Independent Man Corp. continues to derive 100% of its
				 income from sources within Rhode Island. The combined group's income will be
				 apportioned to Rhode Island as set forth in §
											9.6(E)(3)     of
				 this Part and Independent Man Corp.'s income and apportionment information must
				 be included on a schedule attached to the combined group's combined return.