Bill Sponsors
Shallcross Smith, Fellela, Cortvriend, Santucci, Messier, Furtado, Nardone, Fogarty, Tanzi, and Carson
Committee
House Finance
Summary
Select
This bill changes the reporting threshold for when individuals and businesses must file informational tax returns with the state, such as reporting payments made for rent, salaries, or dividends. Previously, reports were required for payments of $100 or more. Under this bill, the state's reporting threshold will now match the federal thresholds set by the Internal Revenue Service (IRS).
Sponsor
Analysis
Pros for Progressives
- Reduces the administrative paperwork burden on small businesses, independent contractors, and gig workers, who often operate on thin margins.
- Simplifies the tax reporting process for low-income freelancers by aligning state requirements with federal rules, reducing confusion and the need for expensive tax preparation services.
- Protects the financial privacy of lower-income individuals by preventing the state from unnecessarily tracking small, micro-transactions of $100.
Cons for Progressives
- May decrease the amount of state tax revenue collected if higher reporting thresholds lead to more unreported income, potentially underfunding important public services.
- Cedes state-level oversight of financial reporting to the federal government, making Rhode Island vulnerable to federal policy shifts that might not align with local progressive values.
- Could make it more difficult for the state to track under-the-table payments, potentially masking wage theft or the exploitation of vulnerable, low-wage workers.
Pros for Conservatives
- Reduces regulatory red tape and compliance costs for businesses by raising the financial reporting threshold.
- Limits government overreach and surveillance by preventing the state from mandating the reporting of minor financial transactions of just $100.
- Streamlines the tax code by aligning state requirements with federal IRS standards, promoting a more business-friendly environment.
Cons for Conservatives
- Surrenders state sovereignty by tying Rhode Island's tax reporting thresholds directly to the federal Internal Revenue Code.
- Automatically subjects Rhode Island businesses to future federal tax reporting burdens if the IRS decides to lower its thresholds, bypassing state legislative debate.
- Could reduce the state's ability to enforce its own tax laws effectively, potentially allowing those who disrespect the rule of law to avoid paying their fair share of taxes.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Employers
- Independent contractors
- Freelancers
- Small business owners
- Taxpayers
Towns Affected
All
Cost to Taxpayers
None
Revenue Generated
Amount unknown
BillBuddy Impact Ratings
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Freedom Impact
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Public Services
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Regulatory
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Clarity of Bill Language
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Enforcement Provisions
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Environmental Impact
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Privacy Impact
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 05/29/2026 Introduced, referred to House Finance
• 05/31/2026 Scheduled for hearing and/or consideration (06/02/2026)
• 06/02/2026 Committee recommended measure be held for further study
• 05/31/2026 Scheduled for hearing and/or consideration (06/02/2026)
• 06/02/2026 Committee recommended measure be held for further study
Bill Text
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 amountsof one hundred dollars ($100) or more consistent with the applicable thresholds for informational filings established under Internal Revenue Code of 1986, 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.
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
(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.