It is enacted by the General Assembly as follows:

SECTION 1. Section 44-11-1(a) of the General Laws in Chapter 44-11 entitled "Business Corporation Tax" is hereby amended to read as follows:

{ADD 44-11-1. Definition of terms. -- ADD} For the purpose of this chapter:

(a) The term "corporation" means and includes every corporation, joint-stock company, or association, wherever incorporated, and also a trustee or trustees conducting a business wherein interest or ownership is evidenced by certificates or other written instruments, deriving any income from sources within this state or engaging in any activities or transactions within this state for the purpose of profit or gain, whether or not an office or place of business is maintained in this state, or whether or not such income, activities, or transactions are connected with intrastate, interstate, or foreign commerce, except:

(1) state banks, mutual savings banks, federal savings banks, trust companies, national banking associations, building and loan associations, credit unions, and loan and investment companies organized under chapter 20 of title 19;

(2) public service corporations included in chapter 13 of this title;

(3) insurance and surety companies;

(4) corporations specified in section 7-6-4, incorporated hospitals, schools, colleges, and other institutions of learning not organized for business purposes and not doing business for profit and no part of the net earnings of which inures to the benefit of any private stockholder or individual, whether incorporated under any general law of this state or by any special act of the general assembly of this state;

(5) fraternal beneficiary societies as set forth in section 27-25-1;

(6) any corporation expressly exempt from taxation by charter.

(b) The term "taxpayer" means and includes any corporation subject to the provisions of this chapter.

(c) The term "taxable year" means the calendar year or the fiscal year ending during such calendar year upon the basis of which the net income is computed under this chapter. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of this chapter or under regulations prescribed by the tax administrator, the period for which such return is made.

(d) The term "fiscal year" means an accounting period of twelve (12) months ending on the last day of any month other than December.

(e) The term "place of business" means a regular place of business, which, in turn, means any bona fide office (other than a statutory office), factory, warehouse, or other space which is regularly used by the taxpayer in carrying on its business. Where, as a regular course of business, property of the taxpayer is stored by it in a public warehouse until it is shipped to customers, the warehouse is considered a regular place of business of the taxpayer and, where as a regular course of business, raw material or partially finished goods of a taxpayer are delivered to an independent contractor to be converted, processed, finished, or improved, and the finished goods remain in the possession of the independent contractor until shipped to customers, the plant of the independent contractor is considered a regular place of business of the taxpayer. The mere consignment of goods by the taxpayer to an independent factor outside this state for sale at the consignee's discretion does not constitute the taxpayer as having a regular place of business outside this state.

{ADD (7) Corporations (A) which together with all corporations under direct or indirect, common ownership that satisfy the other requirements of this paragraph employ not less than five (5) full-time equivalent employees in the State of Rhode Island; (B) which maintain an office in the state of Rhode Island and (C) the activities of which within the state of Rhode Island are confined to the maintenance and management of their intangible investments or of the intangible investments of corporations or business trusts registered as investment companies under the Investment Company Act of 1940, as amended (15 U.S.C. 80a-I et seq.) and the collection and distribution of the income from such investments or from tangible property physically located outside the state of Rhode Island. For purposes of this paragraph, "intangible investments" shall include, without limitation, investments in stocks, bonds, notes and other debt obligations (including debt obligations of affiliated corporations), patents, patent applications, trademarks, trade names, copyrights and similar types of intangible assets. ADD}

SECTION 2. Section 44-14-2 of the General Laws in Chapter 44-14 entitled "Taxation of Banks" is hereby amended to read as follows:

{ADD 44-14-2. Definition of terms. -- ADD} For the purposes of this chapter:

(A) The term "banking institution" means every state bank, federal savings bank, trust company, national banking association, and loan and investment company, but shall not include a mutual savings bank, a credit union, or a building and loan association {ADD or a corporation specified in Section 44-11-1(a)(7) ADD} ;

(B) The term "taxpayer" means any banking institution subject to any tax imposed by this chapter;

(C) The term "administrator" means the tax administrator in the department of administration appointed under the provisions of section 44-1-1;

(D) The term "director" means the head of the department of administration appointed under the provisions of section 42-11-1;

(E) The term "taxable year" means the calendar year in which the tax is payable or fiscal year ending during such calendar year, upon the basis of which the tax is computed under this chapter. "Taxable year" means, in the case of a return made for a fractional part of the year under provisions of this chapter or under regulations prescribed by the tax administrator, the period for which such return is made. The term "fiscal year" means an accounting period of twelve (12) months ending on the last day of any month other than December. The taxable year of a banking institution shall be the same for purposes of this chapter as it is for federal income tax purposes;

(F) The term "income period" means the calendar year or the fiscal year, or portion thereof, next preceding the taxable year;

(G) The term "securities" includes, but shall not be limited to:

(1) Shares of stock or certificates of beneficial interest, or rights to buy the shares or certificates, of a corporation, joint-stock company, association, or business trust;

(2) Bonds, debentures, notes, certificates, or other evidences of indebtedness of any individual, partnership, corporation, joint-stock company, association, or business trust (including those issued by the United States government or any state, or political subdivision of either, or issued by any foreign country or nation or political subdivision thereof).

SECTION 3. Section 44-14-15 of the General Laws in Chapter 44-14 entitled "Taxation of Banks" is hereby amended to read as follows:

{ADD 44-14-15. Dividends excluded from income. -- ADD} There shall not be included in a taxpayer's net income dividends received from the shares of stock of:

(1) Any corporation if over fifty percent (50%) of the corporation's value was apportioned to this state in determining the tax last imposed on it by chapter 11 of this title; and

(2) Any utility if over fifty percent (50%) of the utility's gross earnings was apportioned to this state in determining the tax last imposed on it by chapter 13 of this title; and

(3) Any banking institution liable to a tax under this chapter {DEL . DEL} {ADD ; and

(4) Any corporation specified in Section 44-11-1(a)(7). ADD}

SECTION 4. This act shall take effect upon passage and any provisions of the general laws inconsistent herewith and repealed.