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Doing business in

Rhode Island

Navigate Rhode Island’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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Business Overview

Rhode Island features growing opportunities in maritime industries, healthcare, education, and design. The state offers strategic Northeast location, access to major markets, and specialized workforce development programs. Its compact size facilitates business-government relationships and networking.

Key Facts & Figures

Category Details
Capital Providence
Major Cities Providence, Warwick, Cranston, Pawtucket, East Providence
State Sales Tax Rate 7%
Local Sales Tax Rate No local sales tax
Corporate Income Tax 9.99% flat rate
Physical Nexus Threshold Physical presence through employees, offices, or inventory
Economic Nexus Threshold $100,000 in annual sales or 200 transactions

Did you know?

Rhode Island has the highest concentration of toolmakers in the United States, with a rich manufacturing heritage.

Setup & Compliance

Rhode Island offers centralized business registration with specific compliance requirements.

Rhode Island Business Formation Steps:

  1. Choose Your Business Structure: Consider tax implications and liability protection needs.
  2. Register Your Business: File formation documents with the Rhode Island Department of State.
  3. Register for Tax Accounts: Register with the Division of Taxation for sales tax and withholding.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with the Department of Labor and Training if hiring employees.

Ongoing Compliance Requirements:

  • Annual Reports: Rhode Island entities must file annual reports with the Department of State.
  • Sales Tax Collection: Collect and remit 7% state sales tax on taxable transactions.
  • Corporate Income Tax: Corporations pay 7% corporate income tax.
  • Annual Filing Fee: LLCs pay $50 annual filing fee with annual report.
  • Professional Licensing: Various professions require specialized licenses through state boards.

Hiring & Payroll

Rhode Island provides comprehensive worker protections with several state-specific regulations.

Rhode Island Payroll Requirements:

  • Unemployment Insurance: Rates from 1.2% to 7.5% on first $23,700 of wages.
  • State Income Tax Withholding: Required with progressive rates.
  • Temporary Disability Insurance: Mandatory contribution.
  • Workers’ Compensation: Required for all employers.

Rhode Island Employment Laws:

  • Minimum Wage: $13.00 per hour (as of 2023).
  • Paid Sick Leave: Up to 40 hours annually for most employers.
  • Final Paycheck: Due on next regular payday.
  • Rhode Island is not a right-to-work state.

State Incentives

Rhode Island offers targeted economic incentives to support business growth.

Key Business Incentives:

  • Job Development Act: Tax credits for job creation.
  • Innovation Vouchers: Support for technology commercialization.
  • Research and Development Tax Credit: Supports innovative company development.

Small Business & Startup Support:

  • Rhode Island Small Business Development Center: Comprehensive business consulting.
  • Small Business Loan Fund.
  • Minority Business Enterprise Certification Program.

Regulatory Considerations

Rhode Island maintains a detailed regulatory framework supporting business innovation.

Key Business Regulations:

  • Data Privacy: Laws protecting consumer and business information.
  • Environmental Compliance: Regulations supporting coastal and urban industries.
  • Professional Licensing: Mandatory for various professional services.

Additional Regulatory Areas:

  • Marine and Technology Industry Compliance.
  • Small Business Support Regulations.

Explore Tax & Compliance Topics

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