R.I. Gen. Laws § 44-14-14.5 — Payroll factor

(a) General. The payroll factor is a fraction, the numerator of which is the total amount paid
in this state during the taxable year by the taxpayer for compensation and the denominator
of which is the total compensation paid both within and outside of this state during
the taxable year. The payroll factor shall include only that compensation which is
included in the computation of the apportionable income tax base for the taxable year.
(b) When compensation paid in this state. Compensation is paid in this state if any one of the following tests, applied consecutively,
is met:
(1) The employee’s services are performed entirely within this state.
(2) The employee’s services are performed both within and outside of the state, but the
service performed outside of the state is incidental to the employee’s service within
the state. The term “incidental” means any service which is temporary or transitory
in nature, or which is rendered in connection with an isolated transaction.
(3) If the employee’s services are performed both within and outside of this state, the
employee’s compensation will be attributed to this state:
(i) If the employee’s principal base of operations is within this state;
(ii) If there is no principal base of operations in any state in which some part of the
services is performed, but the place from which the services are directed or controlled
is in this state; or
(iii) If the principal base of operations and the place from which the services are directed
or controlled are not in any state in which some part of the service is performed,
but the employee’s residence is in this state.