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H8604AIncome

Taxation - Personal Income Tax

This bill aligns Rhode Island's income reporting thresholds with federal tax code thresholds, removing the previous $100 minimum.

Introduced71 Yea0 Nay4 Not voting
Population
Affected
35
Email Legislator
Introduced May 29, 2026Committee House Finance

Plain-English Summary

This bill updates the Rhode Island personal income tax law regarding the reporting of income information. Previously, individuals and businesses had to file an informational return with the state if they paid someone $100 or more in a calendar year for things like rent, salaries, or dividends. This bill removes the specific $100 threshold and instead aligns the state's reporting requirement with the federal thresholds established in the United States tax code.

For younger readers

When businesses pay people money, they have to fill out a form to tell the state government about it so people can pay their taxes. Before, the rule in Rhode Island was that they had to report any payment of 100 dollars or more. This new bill changes the rule so that Rhode Island uses the exact same dollar amounts as the United States government uses for its rules. This means businesses just follow the national rules for when to report payments instead of having a separate 100 dollar rule for the state.

Who & Where It Applies

Impacted groups
TaxpayersEmployersIndependent contractorsSmall business ownersFiduciaries
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Reduces the administrative burden on small businesses and independent contractors by aligning state reporting thresholds with federal standards, making compliance easier.
  • Prevents the unnecessary tracking and reporting of very small income amounts, which disproportionately affects lower-income gig workers and freelancers.
  • Streamlines state tax administration by mirroring federal tax codes, allowing the state government to allocate resources more efficiently toward other public services.
  • Potentially reduces state tax revenue needed to fund social safety nets by allowing smaller income amounts to go unreported to the state.
  • Cedes state autonomy over tax reporting thresholds to the federal government, which could be manipulated by conservative federal administrations.
  • Could make it more difficult for state tax authorities to monitor and enforce tax compliance on wealthy individuals or corporations that spread payments across numerous small transactions.
For Conservatives
  • Reduces regulatory red tape and compliance costs for businesses by harmonizing state tax reporting requirements with federal rules.
  • Eliminates an outdated and overly strict $100 state reporting threshold, freeing businesses from excessive paperwork.
  • Decreases state government overreach by deferring to established federal tax code guidelines rather than maintaining separate, stricter state mandates.
  • Ties state tax policy directly to federal statutes, meaning any future federal changes will automatically impact Rhode Island businesses without local legislative debate.
  • Leaves the state vulnerable to automatically adopting burdensome federal reporting requirements if the federal government decides to lower its thresholds.
  • Fails to take independent state action to completely eliminate these informational tax reporting requirements, maintaining a system of government income tracking.

Votes

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Full Bill Text

2 versions
Changes to existing Rhode Island law · 3 additions · 1 deletion

SECTION 1. Section 44-30-58 of the General Laws in Chapter 44-30 entitled "Personal Income Tax" is hereby amended to read as follows: 44-30-58. Requirements concerning returns, notices, records, and statements.

(a) General. The tax administrator may prescribe regulations as to the keeping of records, the content and form of returns and statements, and the filing of copies of federal income tax returns and determinations. The tax administrator may require any person, by regulation or notice served upon the person, to make any returns, render any statements, or keep any records that the tax administrator may deem sufficient to show whether or not the person is liable for the tax or for collection of the tax.

(b) Partnerships. Every partnership having any income derived from Rhode Island sources, determined in accordance with the applicable rules of § 44-30-32 as in the case of a nonresident individual, shall make a return for the taxable year setting forth all items of income and deduction and any other pertinent information that the tax administrator may by regulation or instructions prescribe. Any partnership with nonresident partners having any income derived from Rhode Island sources shall be subject to the provisions of § 44-11-2.2.

(c) Information at source. The tax administrator may prescribe regulations and instructions requiring returns of information to be made and filed on or before February 28 of each year as to the payment or crediting in any calendar year of amounts of one hundred dollars ($100) or more consistent with the applicable thresholds for informational filings established pursuant to 26 U.S.C. §1 et seq., as amended, to any Rhode Island personal income taxpayer. The returns may be required of any person, including lessees or mortgagors of real or personal property, fiduciaries, employers, and all officers and employees of this state, or of any municipal corporation or political subdivision of this state, having the control, receipt, custody, disposal, or payment of interest, rents, salaries, wages, premiums, dividends and other corporate distributions, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, or income. A duplicate of the statement as to tax withheld on wages, required to be furnished by an employer to an employee, shall constitute the return of information required to be made under this section with respect to the wages.

(d) Notice of qualification as fiduciary. Every receiver, trustee in bankruptcy, assignee for benefit of creditors, or other like fiduciary shall give notice of his or her qualification as such to the tax administrator as may be required by regulation.

SECTION 2. This act shall take effect upon passage.