The modifications set forth by H6171 will revise existing laws pertaining to personal income tax rates specifically regarding capital gains. By updating the holding period for assets and introducing specific rates for investment management services, the bill aims not only to increase state revenue through taxation but also to adjust the state’s market attractiveness to investors and residents alike. The legislation is expected to stimulate economic activity by making capital investment more appealing within the state.
Summary
House Bill H6171 introduces significant changes to the taxation structure in Rhode Island, focusing primarily on capital gains taxes. The bill reduces the holding period for assets to one year, which is a notable decrease from the previous period of five years before the assets would qualify for lower tax rates. Furthermore, it specifies tax rates for investment management services interests, imposing a 'carried interest fairness fee' on these earnings. This aligns Rhode Island's taxation framework more closely with certain neighboring states, aiming for a more competitive environment for investments.
Contention
While proponents argue that these changes can lead to enhanced economic growth and fairer taxation structures, concerns from critics center around how these adjustments might affect lower-income individuals and the overall equity of the tax system. There is potential apprehension about whether decreasing capital gains taxation for high-value properties serves the broader interest of Rhode Island's diverse economic landscape, especially considering the potential strain on local services due to increased non-owner occupied properties arising from the tax structure.
Amends the capital gains tax rates and holding period from 5 years to 1 year. Imposes a non-owner occupied tax on homes assessed at more than $1,000,000.
Amends the capital gains tax rates and holding period from 5 years to 1 year. Imposes a non-owner occupied tax on homes assessed at more than $1,000,000.
Allows an income tax credit for employer contributions to an eligible employee's ABLE account, for a maximum credit of two thousand dollars ($2,000) per employee, per year.