Governor McKee, Speaker Shekarchi, Senate President Ruggerio Announce Legislation to Make Rhode Island’s Banking Tax Structure More Competitive

Published on Monday, June 10, 2024

PROVIDENCE, RI — Governor Dan McKee, Speaker K. Joseph Shekarchi and Senate President Dominick Ruggerio today announced the introduction of legislation to make Rhode Island’s banking tax structure more competitive. The agreement, as outlined in legislation sponsored by Representative Joseph Solomon and Senate Finance Committee Chairman Louis P. DiPalma, will be fully vetted by the General Assembly this week.

The legislation would allow financial institutions such as Citizens Bank and others to elect a single sales factor apportionment methodology for calculating corporate income tax, creating a more level playing field between Rhode Island and Massachusetts. Rhode Island currently uses a three-factor apportionment for financial institutions, a method that determines tax based on a company’s property, payroll and sales. Beginning in January 2025, Massachusetts will shift to the single sales factor methodology. Rhode Island has used the single sales factor method for other corporate taxpayers since 2015.

“Through this legislation, our goal is to create a more level playing field with Massachusetts in a way that is both transparent and in the best interest of the people of Rhode Island. We have been working collaboratively and diligently with the Speaker and Senate President on this issue and we look forward to a thorough vetting by the General Assembly later this week,” said Governor McKee. 

“I have been working very hard over the last few weeks with the Governor’s team and the Senate to amend legislation that will keep Rhode Island’s banking tax structure competitive with Massachusetts.  Tomorrow will be the third time a version of this proposal will be heard by the House Finance Committee, reinforcing my insistence that this proposal be carefully vetted in a public and transparent manner before it is considered by the full legislature in the coming days,” said Speaker Shekarchi. 

“This change would put Rhode Island on a level playing field with Massachusetts and help ensure we keep good jobs here in our state. I am grateful for the hard work of Governor Dan McKee and Speaker Joseph Shekarchi, and for all the parties who worked together to ensure the continued economic competitiveness of our state. I look forward to a thorough review of the proposal through our public Senate Finance Committee hearing process,” said Senate President Ruggerio.  

"Citizens is encouraged by recent progress and greatly appreciates the leadership of Governor McKee, Speaker Shekarchi, Senate President Ruggerio and all others involved. We look forward to continuing to work closely with the state towards an outcome that is a win for both the business community and Rhode Island,” said Keith Kelly, President, Citizens Rhode Island 

The House bill will be heard before the House Finance Committee tomorrow at 3:30 p.m. The Senate bill will be heard by the Senate Finance Committee tomorrow at the Rise of the Senate.