PROVIDENCE – State taxes on banks and credit unions won’t change in fiscal 2021, according to Gov. Gina M. Raimondo’s proposed budget.
Taxes on financial institutions, which includes all banks that fall under the Federal Reserve, will stay at 9% on net income apportioned to Rhode Island under the governor’s proposal, according to the R.I. Department of Revenue. The department noted that the rate may change as the General Assembly weighs in on the budget.
Revenue from general business taxes on financial institutions is projected to hit $21 million in fiscal 2021, down from $24 million in the revised fiscal 2020 budget. Further cuts to this revenue continue through fiscal 2022 and 2023, according to the governor’s budget.
The tax on credit unions will stay at the current rate for fiscal 2021, per the terms of the R.I. Revenue Estimating Conference, according to the Department of Revenue. Under the agreed-upon terms, credit unions with more than $150 million in deposits pay $0.0695 per $100 of the daily average of deposits during the calendar year; credit unions with less than $150 million in deposits pay $0.0625 per $100 of the daily average of deposits.
Revenue from this bank deposit tax is projected to total $3 million in fiscal 2021, the same as fiscal 2020, according to the governor’s budget. Revenue for fiscal 2022 and 2023 is projected to increase due to a higher number of accounts or more money deposited, assuming the same tax rate.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
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