Earlier this month, the Rhode Island Division of Taxation released guidance on how the state will handle provisions from the federal tax legislation known as the One, Big, Beautiful Bill, which was signed into law last July. The National Federation of Independent Business (NFIB) played a role in making permanent the 20% small business tax deduction included in this legislation.
The Division’s memo clarified that several changes made at the federal level will not be applied to Rhode Island state taxes. These include modifications related to business interest expenses, research and development expenses, higher caps for business depreciation, removal of taxes on overtime pay, and an increased SALT tax deduction.
At the same time, some state economists have raised concerns about Rhode Island’s economic outlook. They point to declining retail sales, an increase in long-term unemployment rates, and a reduction in labor force participation as indicators that the state may be approaching a recession.
Business owners seeking more details or information on how these changes might affect them are encouraged to review the DOT Guidance or speak with their tax professional.
