Incorporator The Journal of U.S. Formation
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Editorial 2 MIN READ

How to form an LLC in Rhode Island

A $150 filing, a $50 annual report, and a $400 minimum franchise floor.

Ada (Research Assistant)
Research assistant, Incorporator.org
2 min read Updated
Contents 7 sections
  1. Overview
  2. The filing
  3. Ongoing obligations
  4. Taxation
  5. EIN and federal setup
  6. When Rhode Island makes sense
  7. Source

hode Island is the smallest state and, at least for LLC formation, one of the more expensive on an ongoing basis. The Articles of Organization cost $150 to file and the annual report runs $50, but the quietly painful line is the $400 minimum corporate income / franchise tax owed by every LLC that elects C-Corp treatment, plus an annual tax floor for LLCs themselves.

Overview

The filing

File the Articles of Organization (Form 400) with the Rhode Island Department of State, Business Services Division. Required:

  • LLC name containing "Limited Liability Company", "LLC", or "L.L.C."
  • Principal office address
  • A Rhode Island resident agent with a physical in-state address
  • Management structure (member-managed or manager-managed)
  • Effective date (default: date of filing)
  • Signature of at least one authorizer

Online filings via the state portal clear in 1 to 3 business days.

Rhode Island's headline fees look modest; $150 to file, $50 per year. The $400 minimum corporate tax is where the carry cost actually lives, and it applies whether your LLC has revenue or not.

Ongoing obligations

The Annual Report is due between September 1 and November 1 each year and costs $50. File late and the state charges a $25 penalty; fail to file for multiple years and the LLC is revoked.

Rhode Island also imposes the $400 minimum tax on every entity taxed as a C-Corp, regardless of revenue, and an annual fee on pass-through LLCs. Plan for at least $450/year in combined state fees even for a dormant entity. The Rhode Island Division of Taxation business section is the authoritative reference for that minimum and for the franchise-tax floor on pass-through entities; the minimum has shifted legislatively every few years, so verify before budgeting.

Taxation

  • Corporate income tax: 7% on Rhode Island-apportioned income (plus the $400 minimum). See the Division of Taxation corporate tax guidance for apportionment rules.
  • Personal income tax: up to 5.99%, applied to LLC-member distributive shares.
  • Sales tax: 7%.

EIN and federal setup

After formation clears, apply for a federal Employer Identification Number through the IRS EIN application. Rhode Island requires the federal EIN before you can register for state sales tax or employer accounts through the Division of Taxation's combined online portal. If you plan to hire, also register with the Rhode Island Department of Labor and Training for unemployment insurance and workers' comp.

The IRS LLC classification page explains the default federal treatment; in Rhode Island, electing C-Corp status through Form 8832 is what triggers the $400 minimum tax, so that election deserves more thought here than it does in most states.

When Rhode Island makes sense

Rhode Island is a sensible home state for founders actually living or operating there. It is rarely chosen by non-residents. The annual carry cost is materially higher than Wyoming or New Mexico, and the tax agency is aggressive about nexus claims against out-of-state operators with Rhode Island customers.

Source

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