Imposes a wealth tax on Rhode Island individuals and entities at a rate of one percent (1%) of worldwide wealth.
Impact
The imposition of this wealth tax is anticipated to significantly change the tax landscape in Rhode Island. It aims to broaden the tax base by taxing individuals and businesses on their global wealth, potentially increasing state revenue. However, the bill specifies that up to $25 million of an individual’s financial intangible assets will be exempt from taxation, which may impact the wealthiest individuals and entities differently than those with less wealth. The implementation of this tax is also accompanied by provisions for penalties for substantial valuation misstatements, aiming to ensure compliance and accurate reporting of wealth.
Summary
Senate Bill S0779 proposes the introduction of a wealth tax in Rhode Island at a rate of one percent (1%) applied to the worldwide wealth of individuals and entities residing in the state. The bill defines 'worldwide wealth' as the fair market value of all intangible assets owned or controlled by a resident, with specific exemptions outlined for certain financial and non-financial assets. This tax is scheduled to be implemented beginning January 1, 2026, with returns due annually by April 15 of the following year.
Contention
Debate surrounding S0779 is expected to focus on the implications of taxing wealth rather than income. Supporters argue that it is a progressive measure that targets the wealthiest individuals who can afford to pay more in taxes and that it may address economic inequality. Conversely, opponents may raise concerns about the potential for wealthy residents to relocate to states without such taxes, thus harming Rhode Island's economic attractiveness. Additionally, there could be discussions on the feasibility of accurately assessing wealth and enforcing the new tax, particularly concerning the valuation of intangible assets.
Creates the Rhode Island baby bond trust to provide investment funds to children born to families with public health insurance or no insurance living in Rhode Island.
Creates the Rhode Island baby bond trust to provide investment funds to children born to families with public health insurance or no insurance living in Rhode Island.
Exempts from taxation the real and tangible personal property of Wildlife Rehabilitators Association of Rhode Island (Wildlife Clinic of Rhode Island), a Rhode Island domestic nonprofit corporation, located in North Kingstown, Rhode Island.
Exempts from taxation the real and tangible personal property of Wildlife Rehabilitators Association of Rhode Island (Wildlife Clinic of Rhode Island), a Rhode Island domestic nonprofit corporation, located in North Kingstown, Rhode Island.
Exempts from taxation the real and tangible personal property of Rhode Island Coalition Against Domestic Violence, a Rhode Island domestic nonprofit corporation, located in Warwick, Rhode Island.