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S3367ATaxes

Taxation - Personal Income Tax

This bill aligns Rhode Island's tax reporting thresholds for informational returns, like 1099s, with federal IRS guidelines.

Introduced67 Yea0 Nay8 Not voting
Population
Affected
35
Email Legislator
Introduced Jun 7, 2026Committee Senate Finance

Plain-English Summary

This bill updates the Rhode Island personal income tax law regarding informational tax returns, such as 1099 forms. Previously, Rhode Island required these forms to be filed for payments or credits of $100 or more made to a state taxpayer. The bill removes the $100 threshold and instead aligns the state's reporting requirement with the federal IRS thresholds.

For younger readers

When a business pays someone for work, they usually have to fill out a tax form called an informational return to tell the government about the payment. Before, Rhode Island said businesses had to do this for any payment over $100. This new bill changes the rule so that the amount matches whatever the United States government requires. This means Rhode Island's rules for reporting these payments are now exactly the same as the national rules.

Who & Where It Applies

Impacted groups
TaxpayersBusiness ownersFreelancersGig workersAccountants
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Reduces bureaucratic burdens on small businesses and independent contractors by aligning state tax reporting thresholds with federal standards, allowing them to focus resources on community needs rather than redundant paperwork.
  • Prevents lower-income gig workers and freelancers from facing confusing, mismatched tax reporting requirements between state and federal governments, simplifying their tax filing process.
  • Streamlines the state's tax administration system, potentially saving state resources that can be redirected toward funding essential community welfare and public services.
  • Raising the reporting threshold from $100 to higher federal limits could allow more unreported income to go untaxed, potentially reducing state revenue needed for generous public services and social safety nets.
  • By tying state regulations directly to federal law, the state loses some independent oversight over corporate and business payments, making it harder to track small-scale financial activities locally.
  • Federal tax thresholds may fluctuate based on conservative federal administrations; tying state law to these thresholds risks adopting regressive federal tax policies without local legislative debate.
For Conservatives
  • Eliminates an overly strict state-level regulatory burden by removing the low $100 reporting threshold, increasing corporate freedom and reducing red tape for businesses.
  • Aligns state tax codes with federal regulations, making compliance easier and less costly for private enterprises and reducing government interference in small financial transactions.
  • Limits state government overreach by preventing the state tax administrator from demanding unnecessary financial reporting on minor payments under the federal threshold.
  • Surrenders state sovereignty over tax policy by automatically tethering Rhode Island's reporting thresholds to federal statutes, subjecting local businesses to the whims of federal bureaucrats.
  • If federal reporting thresholds are lowered by a progressive federal administration, Rhode Island businesses will automatically be subjected to stricter reporting requirements without a vote from local representatives.
  • Fails to proactively establish a permanent, higher state-level threshold that would guarantee protection for businesses against future federal attempts to increase tax reporting surveillance.

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.