Earlier this month, the Rhode Island Division of Taxation issued guidance as to how the state will treat provisions of the federal tax package signed into law last July, more commonly known as the One, Big, Beautiful Bill. NFIB successfully advocated making the 20% small business tax deduction permanent in this piece of legislation to provide much-needed tax relief for Main Street employers.

The memo outlined that many aspects of federal tax law that will not be allowed on your Rhode Island state taxes. Examples include changes to business interest expenses, changes to research and development expenses, increases in the cap for business depreciation, no tax on overtime, and the SALT tax deduction increase.

Several state economists are warning the state is heading towards a recession with lagging economic indicators. Reports cite retail sales being down, a rise in long-term unemployment, and a drop in labor force participation.

For more information or to learn how these changes impact your business please visit the DOT Guidance or consult with your tax professional.