Rhode Island LLC structure and cost: a $400 minimum tax every LLC owes, multiplied across every entity you form

Rhode Island’s structural cost is dominated by one number: every LLC owes a $400 minimum annual tax to the Division of Taxation, regardless of income, whether the LLC made money, lost money, or did nothing at all. On its own, $400 is manageable. The problem is that Rhode Island has no series LLC, so a multi-property investor who forms a separate LLC for each property pays $400 for each of them, every year, which makes Rhode Island one of the most expensive states in the country to run a multi-entity structure. On top of that, Rhode Island has one of the lowest estate-tax thresholds in the nation, which is a separate consideration for a real estate investor building an estate here. Take the minimum tax first, because it is the defining cost.

The $400 minimum tax, multiplied

Start with the flat tax every LLC owes.

Every Rhode Island LLC owes a $400 minimum annual tax, regardless of income or activity.

Under R.I. Gen. Laws Section 44-11-2(e), every Rhode Island LLC owes a minimum annual tax of $400 to the Division of Taxation, and it applies no matter how the LLC is taxed, default pass-through, single-member disregarded entity, S corporation, or C corporation, and no matter whether it earned anything. Only a general partnership escapes it. So the $400 is a fixed cost of keeping a Rhode Island LLC alive, functionally a franchise tax, and it is owed even by a dormant entity. Because it is charged per LLC, the cost scales directly with the number of entities.

Because Rhode Island has no series LLC, a multi-property investor pays $400 times the number of separate LLCs every year.

Rhode Island has no series statute, so an investor who wants each property insulated forms a separate LLC for each, covered on the series LLC guide, and each of those LLCs owes its own $400 minimum tax. Ten properties in ten Rhode Island LLCs is $4,000 a year in minimum tax alone, before the annual report or registered-agent fees, which is a materially higher carrying cost than in a state with no franchise tax or a series option. That makes the structuring decision in Rhode Island partly a cost decision: the liability benefit of separate entities has to be weighed against $400 per entity per year, and an investor may consolidate properties into fewer LLCs where the risk allows, precisely to avoid multiplying the minimum tax. This is the seam a Rhode Island investor should run the numbers on before defaulting to a separate LLC for every property, because unlike the free-report or no-franchise-tax states, Rhode Island makes each additional entity a recurring $400 line item.

The income tax and the low estate-tax threshold

The rest of Rhode Island’s structure is a moderate income tax against a notably low estate-tax threshold.

Rhode Island’s income tax tops at 5.99%, and its estate tax starts at one of the lowest thresholds in the country, around $1.73 million.

A standard Rhode Island LLC is a pass-through, so its income lands on the members’ returns at graduated rates topping at 5.99%, a moderate top rate, and Rhode Island offers a pass-through entity tax election that can help members work around the federal cap on deducting state taxes. The sales tax is 7% with clothing and groceries exempt, and property taxes are above the national average at around 1.40%. The number that catches real estate investors is the estate tax: Rhode Island imposes its own estate tax on estates above roughly $1.73 million, one of the lowest thresholds in the nation and far below the federal exemption. For an investor whose Rhode Island real estate has appreciated, that threshold is easy to cross, so a portfolio that would owe no federal estate tax can owe Rhode Island estate tax, which makes estate planning a Rhode Island-specific concern alongside the annual minimum tax. Moving property into an LLC carries a conveyance tax of about 0.46%, with a higher tier on residential consideration above $800,000.

The bottom line

Every Rhode Island LLC owes a $400 minimum annual tax under Section 44-11-2(e), regardless of income or activity.

Because Rhode Island has no series LLC, a multi-property investor pays $400 times the number of separate LLCs every year.

Ten properties in ten Rhode Island LLCs is $4,000 a year in minimum tax alone, so the structure choice is partly a cost decision.

Rhode Island’s income tax tops at 5.99%, and it offers a pass-through entity tax election that can help with the federal deduction cap.

Rhode Island’s estate tax starts around $1.73 million, one of the lowest thresholds in the country, so a real estate estate can owe state estate tax while owing nothing federally.

What this page does not cover

This page is about where the entity lives and what it costs to hold and move. How creditors reach a member’s interest, the generous homestead, and the entireties shield are on the protection page. The older LLC act’s duties and defaults are on the governance page. The $150 formation fee, the $50 annual report, and the separate $400 tax handled by a different agency are on the filing page.

Last verified August 2026.