2013 -- S 0744

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LC01967

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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

DEDUCTION

     Introduced By: Senators DaPonte, Bates, Pearson, DiPalma, and Felag

     Date Introduced: March 13, 2013

     Referred To: Senate 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 twenty-

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five thousand dollars ($25,000) in any taxable year. The additional expensing of assets for federal

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tax purposes the sum provided for 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 will be depreciated as provided for under

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the internal revenue service code sections 167 and 168 including 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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LC01967

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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

DEDUCTION

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     This act would permit the expensing of assets in lieu of depreciation in the same manner

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as is provided for under 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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LC01967

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