Rhode Island 2025 Regular Session

Rhode Island House Bill H6010 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3
4	4
5	5	2025 -- H 6010
6	6	========
7	7	LC002022
8	8	========
9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO TAXATION -- REAL ESTATE CONVEYANCE TAX
16	16	Introduced By: Representatives Kislak, Morales, Sanchez, Ajello, Batista, and Potter
17	17	Date Introduced: February 28, 2025
18	18	Referred To: House Finance
19	19
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Section 44-25-1 of the General Laws in Chapter 44-25 entitled "Real Estate 1
23	23	Conveyance Tax" is hereby amended to read as follows: 2
24	24	44-25-1. Tax imposed — Payment — Burden. 3
25	25	(a) There is imposed, on each deed, instrument, or writing by which any lands, tenements, 4
26	26	or other realty sold is granted, assigned, transferred, or conveyed, to, or vested in, the purchaser or 5
27	27	purchasers, or any other person or persons, by his, her, or their direction, or on any grant, 6
28	28	assignment, transfer, or conveyance or such vesting, by such persons that has the effect of making 7
29	29	any real estate company an acquired real estate company, when the consideration paid exceeds one 8
30	30	hundred dollars ($100), a tax at the rate of two dollars and thirty cents ($2.30) for each five hundred 9
31	31	dollars ($500), or fractional part of it, that is paid for the purchase of property or the interest in an 10
32	32	acquired real estate company (inclusive of the value of any lien or encumbrance remaining at the 11
33	33	time the sale, grant, assignment, transfer, or conveyance or vesting occurs, or in the case of an 12
34	34	interest in an acquired real estate company, a percentage of the value of such lien or encumbrance 13
35	35	equivalent to the percentage interest in the acquired real estate company being granted, assigned, 14
36	36	transferred, conveyed, or vested). The tax is payable at the time of making, the execution, delivery, 15
37	37	acceptance, or presentation for recording of any instrument affecting such transfer, grant, 16
38	38	assignment, transfer, conveyance, or vesting. In the absence of an agreement to the contrary, the 17
39	39	tax shall be paid by the grantor, assignor, transferor, or person making the conveyance or vesting. 18
40	40	(b) In addition to the tax imposed by subsection (a), there is imposed, on each deed, 19
41	41
42	42
43	43	LC002022 - Page 2 of 6
44	44	instrument, or writing by which any residential real property sold is granted, assigned, transferred, 1
45	45	or conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, 2
46	46	her, or their direction, or on any grant, assignment, transfer, or conveyance or such vesting, by such 3
47	47	persons that has the effect of making any real estate company an acquired real estate company, 4
48	48	when the consideration paid exceeds eight hundred thousand dollars ($800,000), a tax at the rate of 5
49	49	two dollars and thirty cents ($2.30) for each five hundred dollars ($500), or fractional part of it, of 6
50	50	the consideration in excess of eight hundred thousand dollars ($800,000) that is paid for the 7
51	51	purchase of property or the interest in an acquired real estate company (inclusive of the value of 8
52	52	any lien or encumbrance remaining at the time the sale, grant, assignment, transfer, or conveyance 9
53	53	or vesting occurs, or in the case of an interest in an acquired real estate company, a percentage of 10
54	54	the value of such lien or encumbrance equivalent to the percentage interest in the acquired real 11
55	55	estate company being granted, assigned, transferred, conveyed, or vested). The tax imposed by this 12
56	56	subsection shall be paid at the same time and in the same manner as the tax imposed by subsection 13
57	57	(a). 14
58	58	(c) In the event no consideration is actually paid for the lands, tenements, or realty, the 15
59	59	instrument or interest in an acquired real estate company of conveyance shall contain a statement 16
60	60	to the effect that the consideration is such that no documentary stamps are required. 17
61	61	(d) The tax shall be distributed as follows: 18
62	62	(1) With respect to the tax imposed by subsection (a): the tax administrator shall contribute 19
63	63	to the distressed community relief program the sum of thirty cents ($.30) per two dollars and thirty 20
64	64	cents ($2.30) of the face value of the stamps to be distributed pursuant to § 45-13-12, and to the 21
65	65	housing resources and homelessness restricted receipt account established pursuant to § 42-128-2 22
66	66	the sum of thirty cents ($.30) per two dollars and thirty cents ($2.30) of the face value of the stamps. 23
67	67	The state shall retain sixty cents ($.60) for state use. The balance of the tax shall be retained by the 24
68	68	municipality collecting the tax. 25
69	69	(2) With respect to the tax imposed by subsection (b): the tax administrator shall contribute 26
70	70	the entire tax to the housing production fund established pursuant to § 42-128-2.1. 27
71	71	(3) Notwithstanding the above, in the case of the tax on the grant, transfer, assignment, or 28
72	72	conveyance or vesting with respect to an acquired real estate company, the tax shall be collected 29
73	73	by the tax administrator and shall be distributed to the municipality where the real estate owned by 30
74	74	the acquired real estate company is located; provided, however, in the case of any such tax collected 31
75	75	by the tax administrator, if the acquired real estate company owns property located in more than 32
76	76	one municipality, the proceeds of the tax shall be allocated amongst said municipalities in the 33
77	77	proportion the assessed value of said real estate in each such municipality bears to the total of the 34
78	78
79	79
80	80	LC002022 - Page 3 of 6
81	81	assessed values of all of the real estate owned by the acquired real estate company in Rhode Island. 1
82	82	Provided, however, in fiscal years 2004 and 2005, from the proceeds of this tax, the tax 2
83	83	administrator shall deposit as general revenues the sum of ninety cents ($.90) per two dollars and 3
84	84	thirty cents ($2.30) of the face value of the stamps. The balance of the tax on the purchase of 4
85	85	property shall be retained by the municipality collecting the tax. The balance of the tax on the 5
86	86	transfer with respect to an acquired real estate company, shall be collected by the tax administrator 6
87	87	and shall be distributed to the municipality where the property for which interest is sold is 7
88	88	physically located. Provided, however, that in the case of any tax collected by the tax administrator 8
89	89	with respect to an acquired real estate company where the acquired real estate company owns 9
90	90	property located in more than one municipality, the proceeds of the tax shall be allocated amongst 10
91	91	the municipalities in proportion that the assessed value in any such municipality bears to the 11
92	92	assessed values of all of the real estate owned by the acquired real estate company in Rhode Island. 12
93	93	(e) For purposes of this section, the term “acquired real estate company” means a real estate 13
94	94	company that has undergone a change in ownership interest if (1) The change does not affect the 14
95	95	continuity of the operations of the company; and (2) The change, whether alone or together with 15
96	96	prior changes has the effect of granting, transferring, assigning, or conveying or vesting, 16
97	97	transferring directly or indirectly, 50% or more of the total ownership in the company within a 17
98	98	period of three (3) years. For purposes of the foregoing subsection (e)(2), a grant, transfer, 18
99	99	assignment, or conveyance or vesting, shall be deemed to have occurred within a period of three 19
100	100	(3) years of another grant(s), transfer(s), assignment(s), or conveyance(s) or vesting(s) if during the 20
101	101	period the granting, transferring, assigning, or conveying party provides the receiving party a 21
102	102	legally binding document granting, transferring, assigning, or conveying or vesting the realty or a 22
103	103	commitment or option enforceable at a future date to execute the grant, transfer, assignment, or 23
104	104	conveyance or vesting. 24
105	105	(f) A real estate company is a corporation, limited liability company, partnership, or other 25
106	106	legal entity that meets any of the following: 26
107	107	(1) Is primarily engaged in the business of holding, selling, or leasing real estate, where 27
108	108	90% or more of the ownership of the real estate is held by 35 or fewer persons and which company 28
109	109	either (i) derives 60% or more of its annual gross receipts from the ownership or disposition of real 29
110	110	estate; or (ii) owns real estate the value of which comprises 90% or more of the value of the entity’s 30
111	111	entire tangible asset holdings exclusive of tangible assets that are fairly transferrable and actively 31
112	112	traded on an established market; or 32
113	113	(2) Ninety percent or more of the ownership interest in such entity is held by 35 or fewer 33
114	114	persons and the entity owns as 90% or more of the fair market value of its assets a direct or indirect 34
115	115
116	116
117	117	LC002022 - Page 4 of 6
118	118	interest in a real estate company. An indirect ownership interest is an interest in an entity 90% or 1
119	119	more of which is held by 35 or fewer persons and the purpose of the entity is the ownership of a 2
120	120	real estate company. 3
121	121	(g) In the case of a grant, assignment, transfer, or conveyance or vesting that results in a 4
122	122	real estate company becoming an acquired real estate company, the grantor, assignor, transferor, or 5
123	123	person making the conveyance or causing the vesting, shall file or cause to be filed with the division 6
124	124	of taxation, at least five (5) days prior to the grant, transfer, assignment, or conveyance or vesting, 7
125	125	notification of the proposed grant, transfer, assignment, or conveyance or vesting, the price, terms 8
126	126	and conditions thereof, and the character and location of all of the real estate assets held by the real 9
127	127	estate company and shall remit the tax imposed and owed pursuant to subsection (a). Any such 10
128	128	grant, transfer, assignment, or conveyance or vesting which results in a real estate company 11
129	129	becoming an acquired real estate company shall be fraudulent and void as against the state unless 12
130	130	the entity notifies the tax administrator in writing of the grant, transfer, assignment, or conveyance 13
131	131	or vesting as herein required in subsection (g) and has paid the tax as required in subsection (a). 14
132	132	Upon the payment of the tax by the transferor, the tax administrator shall issue a certificate of the 15
133	133	payment of the tax which certificate shall be recordable in the land evidence records in each 16
134	134	municipality in which such real estate company owns real estate. Where the real estate company 17
135	135	has assets other than interests in real estate located in Rhode Island, the tax shall be based upon the 18
136	136	assessed value of each parcel of property located in each municipality in the state of Rhode Island. 19
137	137	(h) In addition to the tax imposed by subsections (a) and (b) of this section, the city of 20
138	138	Providence is authorized to impose by ordinance, on each deed, instrument, or writing by which 21
139	139	any lands, tenements, or other realty sold in the city of Providence, in which an interest is granted, 22
140	140	assigned, transferred, or conveyed to, or vested in, the purchaser or purchasers, or any other person 23
141	141	or persons, by his, her, or their direction, or on any grant, assignment, transfer, or conveyance or 24
142	142	such vesting, by such persons that has an interest in real estate, when the consideration paid exceeds 25
143	143	one million dollars ($1,000,000), a tax at the rate of up to three-quarters of one percent (0.75%) of 26
144	144	the purchase price that is paid for the purchase of property or the interest in an acquired real estate 27
145	145	company (inclusive of the value of any lien or encumbrance remaining at the time the sale, grant, 28
146	146	assignment, transfer, or conveyance or vesting occurs, or in the case of an interest in an acquired 29
147	147	real estate company, a percentage of the value of such lien or encumbrance equivalent to the 30
148	148	percentage interest in the acquired real estate company being granted, assigned, transferred, 31
149	149	conveyed, or vested). The tax, if imposed, is payable at the time of making, the execution, delivery, 32
150	150	acceptance, or presentation for recording of any instrument affecting such transfer, grant, 33
151	151	assignment, transfer, conveyance, or vesting. In the absence of an agreement to the contrary, the 34
152	152
153	153
154	154	LC002022 - Page 5 of 6
155	155	tax, if imposed, shall be paid by the grantor, assignor, transferor, or person making the conveyance 1
156	156	or vesting. The tax, if imposed in accordance with the provisions of this subsection, shall be paid 2
157	157	to and retained by the city of Providence. 3
158	158	SECTION 2. This act shall take effect upon passage. 4
159	159	========
160	160	LC002022
161	161	========
162	162
163	163
164	164	LC002022 - Page 6 of 6
165	165	EXPLANATION
166	166	BY THE LEGISLATIVE COUNCIL
167	167	OF
168	168	A N A C T
169	169	RELATING TO TAXATION -- REAL ESTATE CONVEYANCE TAX
170	170	***
171	171	This act would authorize the city of Providence to impose an additional conveyance tax of 1
172	172	three quarters of one percent (0.75%) on the sale of any real property in excess of one million 2
173	173	dollars ($1,000,000). 3
174	174	This act would take effect upon passage. 4
175	175	========
176	176	LC002022
177	177	========