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Thu April 7, 2011
Providence Chamber, Chafee administration differ on combined reporting
By IAN DONNIS
PROVIDENCE, R.I. –
Under combined reporting, multi-states businesses pay taxes on part of their entire earnings, not just those in a particular state.
State revenue director Rosemary Gallogly says combined reporting would stop businesses from shifting their tax revenue to lower tax states.
"So this really levels the playing field by combing the income from an entire business entity," Gallogly says.
Twenty-three states use combined reporting, including every New England state except Connecticut. But some business groups say combined reporting could discourage investment in Rhode Island.
"Those national companies that have made a decision to invest in Rhode Island with major facilities here and by hiring hundreds and in many cases thousands of employees will literally pay a payroll penalty," says Kelly Sheridan, counsel for the Greater Providence Chamber of Commerce.
Combined reporting is part of a Chafee administration package to lower the corporate tax rate from nine to seven-point-five percent.
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