Rhode Island lesson 5 of 6
Rhode Island LLC taxes and the $400 minimum tax
Rhode Island has no separate LLC franchise tax, but it does apply a flat $400 minimum tax to corporations, LLCs and limited partnerships registered with the Department of State, so understand this before you form.
How members are taxed on pass-through income
A Rhode Island LLC that is taxed for federal purposes as a partnership or a disregarded entity passes income through to its members, who report their share on their personal returns and pay Rhode Island's graduated personal income tax, which currently tops out at 5.99% for the highest bracket. Confirm the current-year brackets with the Division of Taxation before filing, since Rhode Island's brackets are indexed for inflation annually.
An LLC that elects to be taxed for federal and Rhode Island purposes as a C corporation instead files Form RI-1120C and pays Rhode Island's business corporation tax, currently 7% of net income apportioned to Rhode Island.
The $400 minimum tax
Every business corporation, LLC and limited partnership registered with the RI Department of State owes a minimum annual tax of $400 to the Division of Taxation. This minimum is not pro-rated and is owed regardless of how long the entity operated in the calendar year or whether it made a profit. Confirm with the Division of Taxation whether your LLC's specific pass-through election changes how this minimum applies to your entity, since the treatment can depend on the federal classification you chose on Form 400.
Budget for the $400 minimum tax the same year you file your Articles of Organization. New LLC owners are frequently surprised that this applies even to an LLC that has not yet opened for business.
Sales tax and licensing
If you sell taxable goods or certain services, register with the Division of Taxation for a sales tax permit before you start selling. Rhode Island does not have one universal statewide business licence; check with the Division of Business Regulation, your municipality, and any board that regulates your specific trade.
Key takeaways
- Pass-through members pay Rhode Island's graduated personal income tax, topping out at 5.99%.
- A C-Corp election pays the 7% business corporation tax on Form RI-1120C instead.
- The $400 minimum tax applies to essentially every entity registered with the Department of State, confirm how it applies to your specific classification with the Division of Taxation.
Frequently asked questions
Does every Rhode Island LLC pay the $400 minimum tax?
The Department of State's own cost guidance states that corporations, LLCs and limited partnerships owe a $400 minimum annual tax to the Division of Taxation regardless of profit or activity. Confirm your specific LLC's obligation and how any pass-through election affects it directly with the Division of Taxation, since treatment can vary with the federal tax classification you chose on Form 400.
Is there a statewide business licence in Rhode Island?
No single statewide licence covers all businesses. Check with your municipality and any state board that regulates your specific industry.
Official sources
Or let us file your Rhode Island LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Articles of Organization (Form 400), act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team