Updated guidance on corporate nexus, combined reporting, and market-based sourcing
Rhode Island recently enacted changes to corporate tax requirements that include updated guidance for corporate nexus, combined reporting, single sales factor apportionment and market-based sourcing.
Business Corporation Tax Corporate Nexus Regulation CT 15-02 (CT 15-02) provides enhanced guidance about which activities make a foreign corporate entity subject to Rhode Island income tax. Business Corporation Tax Apportionment of Net Income Regulation CT 15-04 (CT 15-04) makes changes to corporate tax reporting along the lines of the rules adopted for years 2009 and later by Massachusetts and those recently enacted by Connecticut. They are also similar to the market-based sourcing changes enacted by Massachusetts in 2015 and New York in 2016. Rhode Island’s adjustments, however, are more stringent than the changes adopted by Massachusetts and generally allow for fewer exemptions.