2013 -- H 5478

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LC01324

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION - DEPRECIATION OF ASSETS AND NET OPERATING LOSS

     Introduced By: Representatives Valencia, Nunes, San Bento, Keable, and Silva

     Date Introduced: February 14, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-61-1.1 of the General Laws in Chapter 44-61 entitled "Relating

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To Depreciation of Assets and Net Operating Loss Deduction" is hereby amended to read as

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follows:

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     44-61-1.1. Expensing in lieu of depreciation of assets. -- (a) For purposes of expensing

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of assets under chapters 11, 14 and 30 of this title, the expense deduction shall not exceed the sum

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provided for twenty-five thousand dollars ($25,000) in any taxable year. The additional expensing

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of assets for federal tax purposes under section 179 of the Internal Revenue Code, 26 U.S.C.

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section 179 provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003 or any

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subsequent federal enactment shall not be allowed for Rhode Island tax purposes. In the year that

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those assets are placed in service expensing of assets and in all subsequent years, expenses and

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depreciation for Rhode Island tax purposes shall be allowed in the same manner as is provided for

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under section 179 of the internal revenue code 26 U.S.C. section 179 on those assets as it would

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have been computed prior to the enactment of the Jobs and Growth Tax Relief Reconciliation Act

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of 2003. Any remaining tax basis of the asset purchased shall be depreciated as provided for

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under the internal revenue service code sections 167 and 168, excluding section 168(k).

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      (b) The gain resulting from any subsequent disposition of these assets shall be computed

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using a basis consistent with the Rhode Island expenses and depreciation allowed under

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subsection (a) of this section.

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     SECTION 2. This act shall take effect on January 1, 2014, and shall apply to all assets

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placed in service on or after January 1, 2014.

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LC01324

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - DEPRECIATION OF ASSETS AND NET OPERATING LOSS

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     This act would allow the expensing of assets in lieu of depreciation as provided under

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section 179 of the internal revenue code 26 U.S.C. section 179.

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     This act would take effect on January 1, 2014, and shall apply to all assets placed in

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service on or after January 1, 2014.

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LC01324

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