Rhode Island banks may use receipts alone to apportion taxable income

A banking institution may elect to apportion its income using its receipts factor alone. This applies to a banking institution whose business is taxable both inside and outside Rhode Island. The bank must file the tax administrator’s form with its tax return. If the receipts factor is missing because both its numerator and denominator are zero, the bank’s whole net income is taxable under the cited bank-tax rules. A bank using this election may not claim benefits under chapter 64.5 of title 42. The election applies to tax years beginning on or after January 1, 2025, and continues in later tax years. After at least five subsequent tax years, a bank may ask to revoke it if facts or law materially change.

The tax administrator may use another reasonable method to determine a bank’s Rhode Island income. This applies to banking institutions calculating income from business carried on in Rhode Island. This may apply when the usual allocation and apportionment rules or the receipts-only election do not reasonably estimate income from business carried on in Rhode Island. A bank applying for another method must explain why and describe the method it seeks in a statement attached to its filed return. The tax administrator may also make this determination after review and may request sworn additional information. This applies to tax years beginning on or after January 1, 2025.