R.I. Gen. Laws § 44-39.3-1 — Exclusion for qualifying options

For purposes of determining the federal income tax liability of a taxpayer subject
to Rhode Island income tax, the Rhode Island income of the taxpayer under §§ 44-30-12 and 44-30-16 shall be determined by excluding any income, gain, or preference items resulting
from the sale, transfer, or exercise of qualified and nonqualified stock options,
the stock issued or transferred on the exercise of any option, and warrants issued
with respect to options and/or stock, of a qualifying corporation; provided, that
the taxpayer was a qualifying taxpayer and the taxpayer’s employer who issued the
option was a qualifying corporation at the time the taxpayer acquired a vested interest
in the option and exercised the option.