Rhode Island LLC Taxes Explained: Income Tax + $400 Minimum (2026)
Rhode Island's personal income tax is unremarkable — graduated, topping out at 5.99%. What makes Rhode Island's tax picture genuinely different is the mandatory $400 minimum tax every LLC owes, on top of everything else, whether or not you turned a profit.
A default Rhode Island LLC is a pass-through: profits land on your personal return, taxed at a graduated rate topping out at 5.99% for income above roughly $139,400. Add 15.3% federal self-employment tax on 92.35% of net profit. Separately, every LLC owes a mandatory $400 minimum tax to the Division of Taxation via Form RI-1065 — regardless of income, including single-member LLCs. Sellers collect a flat 7% sales tax with no local additions. Nonresident members face withholding at 5.99% on their share of Rhode Island-source income.
- State income tax
- Graduated, tops out at 5.99%
- Mandatory minimum tax
- $400/yr — every LLC
- Applies even to SMLLCs?
- Yes
- Sales tax
- Flat 7% — no local add-ons
- Nonresident member withholding
- 5.99%
- Corporate rate (if elected)
- 7% or $400 minimum, greater
The Tax Layers in Rhode Island
Federal: income + self-employment tax
Pass-through profits hit your 1040 at your federal bracket, plus 15.3% SE tax on 92.35% of net profit.
Rhode Island state income tax: graduated, tops out at 5.99%
Applies to your share of pass-through profit reported on Form RI-1040, at the top rate for income above roughly $139,400.
The $400 minimum tax — separate and mandatory
Owed by the LLC itself via Form RI-1065, regardless of the income tax owed by individual members. See the dedicated section below.
Sales tax: flat 7% (if applicable)
No local add-ons anywhere in the state. See Step 7.
Estimate Your Combined Bill
Rhode Island LLC Tax Estimator
Single-member default taxation · graduated up to 5.99% + $400 minimum · educational estimate
The $400 Minimum Tax — Every Year, Every LLC
This is Rhode Island's defining tax feature, and it deserves repeating clearly: every LLC owes a $400 minimum tax to the Division of Taxation, every year, regardless of profit. A brand-new LLC with zero revenue in its first year still owes $400. A dormant LLC you forgot to dissolve still owes $400. This applies to LLCs taxed as partnerships, disregarded single-member LLCs, and S-corporations alike — essentially every pass-through LLC structure. Only general partnerships are exempt from this specific charge. Filed via Form RI-1065.
Nonresident Member Withholding
If your Rhode Island LLC has members who don't live in Rhode Island, the LLC must withhold income tax from their share of Rhode Island-source income, generally at the 5.99% top individual rate, using Form RI-1096PT. There are some exceptions listed on the Division of Taxation's Pass-Through Entities page — confirm your specific situation if you have out-of-state members.
The S-Corp Question
An S-Corp election changes federal taxation: reasonable salary (payroll-taxed) plus distributions that escape the 15.3% SE tax. File Form 2553 — never Form 8832, which is the C-Corp election. Rhode Island recognizes S-Corp elections, but the $400 minimum tax still applies to S-corporations just as it does to standard LLCs — the election doesn't reduce or eliminate this specific obligation. Run your numbers in the S-Corp election guide, factoring in the $400 as a fixed cost either way.
Your Rhode Island Tax Calendar
| Date | What's Due |
|---|---|
| Apr 15 / Jun 15 / Sep 15 / Jan 15 | Quarterly estimated taxes — federal and Rhode Island, on pass-through profit |
| Feb 1 – May 1 | Annual report to the Secretary of State ($50) |
| Mar 15 (calendar year) | Form RI-1065 + $400 minimum tax to the Division of Taxation |
| Apr 15 | Form 1040 + Form RI-1040 |
| Monthly/Quarterly | Sales tax returns via the Division of Taxation, if applicable |
Ahmad Adil's Take: Rhode Island's personal income tax rate is genuinely unremarkable — 5.99% at the top is right in the middle of the national pack. The number that actually matters for your planning is $400, guaranteed, every year, no matter what. I want every founder weighing Rhode Island to build that into their very first year's budget as a certainty, not a maybe. If you're actually operating here, it's simply the cost of doing business. If you're comparing states for a business that could genuinely be formed anywhere, this fixed $400 — layered on top of the $50 report — is the number that should weigh most heavily in your decision, more than the graduated income tax rate itself.
- ✓Forms your Rhode Island LLC for $39 + the $150 state fee
- ✓Files online with the Department of State
- ✓Free Rhode Island resident agent the first year
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Rhode Island LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. The figures here — the $150 Articles of Organization, the $50 annual report, and Rhode Island’s mandatory $400 annual charge — reflect current Rhode Island Department of State and Division of Taxation guidance. This is educational content, not legal or tax advice.
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