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| 4 | 4 | | |
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| 5 | 5 | | 2025 -- S 0779 |
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| 6 | 6 | | ======== |
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| 7 | 7 | | LC002281 |
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| 8 | 8 | | ======== |
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| 9 | 9 | | S T A T E O F R H O D E I S L A N D |
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| 10 | 10 | | IN GENERAL ASSEMBLY |
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| 11 | 11 | | JANUARY SESSION, A.D. 2025 |
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| 12 | 12 | | ____________ |
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| 13 | 13 | | |
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| 14 | 14 | | A N A C T |
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| 15 | 15 | | RELATING TO TAXATION -- WEALTH TAX |
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| 16 | 16 | | Introduced By: Senators Mack, Acosta, and Kallman |
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| 17 | 17 | | Date Introduced: March 14, 2025 |
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| 18 | 18 | | Referred To: Senate Finance |
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| 19 | 19 | | |
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| 20 | 20 | | |
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| 21 | 21 | | It is enacted by the General Assembly as follows: |
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| 22 | 22 | | SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by 1 |
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| 23 | 23 | | adding thereto the following chapter: 2 |
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| 24 | 24 | | CHAPTER 72 3 |
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| 25 | 25 | | WEALTH TAX 4 |
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| 26 | 26 | | 44-72-1. Definitions. 5 |
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| 27 | 27 | | The definitions in this section apply throughout this chapter unless the context clearly 6 |
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| 28 | 28 | | requires otherwise: 7 |
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| 29 | 29 | | (1) "Artificial person" means a corporation; limited liability company; limited liability 8 |
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| 30 | 30 | | partnership, limited partnership, joint venture, or any other kind of partnership; association; 9 |
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| 31 | 31 | | business trust or any other trust; estate; association; or any other organization. 10 |
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| 32 | 32 | | (2) "Cash and cash equivalents" means currency and short-term, highly liquid investments 11 |
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| 33 | 33 | | that are readily convertible to known amounts of cash. "Cash and cash equivalents" includes money 12 |
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| 34 | 34 | | on hand, certificates of deposit, checking account deposits, savings account deposits, money market 13 |
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| 35 | 35 | | funds, cryptocurrency, and similar assets. 14 |
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| 36 | 36 | | (3) "Day" means a calendar day or any portion of a calendar day. 15 |
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| 37 | 37 | | (4) "Department" means the department of revenue. 16 |
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| 38 | 38 | | (5) "Domicile" means for purposes of an artificial person: 17 |
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| 39 | 39 | | (i) For a business, the principal place from which the business is directed or managed; and 18 |
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| 40 | 40 | | (ii) For artificial persons other than businesses, the place where the entity was organized. 19 |
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| 41 | 41 | | |
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| 42 | 42 | | |
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| 43 | 43 | | LC002281 - Page 2 of 10 |
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| 44 | 44 | | (6) "Fair market value" means the amount of money that a willing buyer would pay to a 1 |
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| 45 | 45 | | willing seller for property in an arms-length transaction if both parties were fully informed about 2 |
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| 46 | 46 | | all advantages and disadvantages of the property and neither party is acting under a compulsion to 3 |
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| 47 | 47 | | enter into the transaction. 4 |
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| 48 | 48 | | (7) "Financial intangible assets" means the following assets: 5 |
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| 49 | 49 | | (i) Cash and cash equivalents; 6 |
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| 50 | 50 | | (ii) Financial investments such as annuities, bonds, treasury bills, mutual funds or index 7 |
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| 51 | 51 | | funds, stocks, publicly traded options, futures contracts, commodities contracts, put and call 8 |
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| 52 | 52 | | options, certificates of interest in gold and other precious metals or gems, and other similar 9 |
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| 53 | 53 | | investments; 10 |
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| 54 | 54 | | (iii) Units of ownership in a subchapter K entity; 11 |
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| 55 | 55 | | (iv) Units of ownership and stock in a subchapter S entity; and 12 |
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| 56 | 56 | | (v) Similar intangible assets. 13 |
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| 57 | 57 | | (8) "Intangible assets" means both financial intangible assets and nonfinancial intangible 14 |
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| 58 | 58 | | assets. 15 |
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| 59 | 59 | | (9) "Nonfinancial intangible assets" means all intangible property other than financial 16 |
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| 60 | 60 | | intangible assets, such as trademarks, trade names, brand names, patents, copyrights, trade secrets, 17 |
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| 61 | 61 | | licenses, permits, core deposits of financial institutions, noncompete agreements, customer lists, 18 |
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| 62 | 62 | | patient lists, favorable contracts, favorable financing agreements, reputation, exceptional 19 |
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| 63 | 63 | | management, prestige, good name, integrity of a business, private nongovernmental personal 20 |
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| 64 | 64 | | service contracts, and private nongovernmental athletic or sports franchises or agreements. 21 |
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| 65 | 65 | | (10) "Person" means any natural person or artificial person. 22 |
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| 66 | 66 | | (11) "Subchapter K entity" means a partnership, including a limited partnership, limited 23 |
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| 67 | 67 | | liability partnership, limited liability limited partnership, limited liability company, joint venture, 24 |
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| 68 | 68 | | or any other entity subject to subchapter K of the internal revenue code, 26 U.S.C. §§ 701 through 25 |
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| 69 | 69 | | 761, including a single member limited liability company. 26 |
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| 70 | 70 | | (12) "Subchapter S entity" means any entity subject to the internal revenue code, 26 U.S.C. 27 |
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| 71 | 71 | | §§ 1361 through 1379. 28 |
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| 72 | 72 | | (13) "Tax year" means the calendar year immediately preceding the year in which the tax 29 |
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| 73 | 73 | | under this chapter is due and payable to the department. 30 |
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| 74 | 74 | | (14) "Taxable worldwide wealth" means a person's worldwide wealth, excluding the fair 31 |
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| 75 | 75 | | market value of any intangible property exempt from the tax imposed under this chapter. 32 |
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| 76 | 76 | | (15) "Rhode Island resident" or "resident" means the following: 33 |
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| 77 | 77 | | (i) Any artificial person domiciled in this state at any time during the tax year; or 34 |
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| 78 | 78 | | |
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| 79 | 79 | | |
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| 80 | 80 | | LC002281 - Page 3 of 10 |
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| 81 | 81 | | (ii) A natural person: 1 |
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| 82 | 82 | | (A) Who is domiciled in this state at any time during the tax year; or 2 |
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| 83 | 83 | | (B) Who is not domiciled in this state during the tax year, but maintained a place of abode 3 |
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| 84 | 84 | | and was physically present in this state for more than one hundred eighty three (183) days during 4 |
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| 85 | 85 | | the tax year. 5 |
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| 86 | 86 | | (16)(i) "Worldwide wealth" means the fair market value of all intangible assets, or portion 6 |
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| 87 | 87 | | thereof, owned or controlled by a resident. 7 |
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| 88 | 88 | | (ii) For purposes of this subsection: 8 |
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| 89 | 89 | | (A) "Control" means a person possesses, directly or indirectly, alone or with one or more 9 |
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| 90 | 90 | | close associates, more than fifty percent (50%) of the power to sell or otherwise dispose of 10 |
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| 91 | 91 | | intangible assets. 11 |
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| 92 | 92 | | (B) "Close associates" means natural persons who are in close association with another 12 |
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| 93 | 93 | | natural person by reason of a family, marital, personal, or business relationship. 13 |
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| 94 | 94 | | (C) "Own" includes both legal and beneficial ownership. 14 |
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| 95 | 95 | | 44-72-2. Tax imposed. 15 |
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| 96 | 96 | | (a) Beginning January 1, 2026, for taxes due in 2027, a wealth tax is imposed on each 16 |
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| 97 | 97 | | Rhode Island resident. The wealth tax equals one percent (1%) multiplied by a resident's taxable 17 |
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| 98 | 98 | | worldwide wealth. 18 |
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| 99 | 99 | | (b) Except as provided in subsection (c) of this section, the tax imposed under this section 19 |
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| 100 | 100 | | applies to a resident's taxable worldwide wealth as of December 31 of the tax year. 20 |
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| 101 | 101 | | (c) In the case of any individual who dies during a tax year and who is not married or in a 21 |
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| 102 | 102 | | state registered domestic partnership on the date of such individual's death: 22 |
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| 103 | 103 | | (1) The tax imposed under this section applies to the individual's taxable worldwide wealth 23 |
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| 104 | 104 | | as of the date of the individual's death; and 24 |
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| 105 | 105 | | (2) The amount of the tax otherwise due under this section shall be reduced by an amount 25 |
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| 106 | 106 | | determined by: 26 |
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| 107 | 107 | | (i) Dividing the amount of tax otherwise due for the entire tax year by the total number of 27 |
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| 108 | 108 | | days in the tax year; and 28 |
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| 109 | 109 | | (ii) Multiplying the amount determined in subsection (c)(2)(i) of this section by the number 29 |
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| 110 | 110 | | of days remaining in the tax year after the date of the individual's death. 30 |
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| 111 | 111 | | (d) The tax imposed in this section does not apply to a resident based on that person's status 31 |
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| 112 | 112 | | as a trustee of a trust, unless that person is also a beneficiary of the trust or holds a general power 32 |
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| 113 | 113 | | of appointment over the assets of the trust. 33 |
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| 114 | 114 | | (e)(1) If an individual is treated as the owner of any portion of a trust that qualifies as a 34 |
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| 115 | 115 | | |
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| 116 | 116 | | |
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| 117 | 117 | | LC002281 - Page 4 of 10 |
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| 118 | 118 | | grantor trust for federal income tax purposes, that individual shall be treated as the owner of that 1 |
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| 119 | 119 | | property for purposes of the tax imposed in this section to the extent such property includes 2 |
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| 120 | 120 | | intangible assets. 3 |
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| 121 | 121 | | (2) A grantor of a trust that does not qualify as a grantor trust for federal income tax 4 |
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| 122 | 122 | | purposes shall nevertheless be treated as the owner of the intangible assets of the trust for purposes 5 |
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| 123 | 123 | | of the tax imposed in this section if the grantor's transfer of assets to the trust is treated as an 6 |
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| 124 | 124 | | incomplete gift under 26 U.S.C. § 2511 of the internal revenue code and its accompanying 7 |
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| 125 | 125 | | regulations. 8 |
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| 126 | 126 | | (f) Intangible assets transferred after the effective date of this section by a resident to an 9 |
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| 127 | 127 | | individual who is a member of the family of the resident and has not attained the age of eighteen 10 |
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| 128 | 128 | | (18) shall be treated as property of the resident for any calendar year before the year in which such 11 |
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| 129 | 129 | | individual attains the age of eighteen (18). 12 |
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| 130 | 130 | | (g) All funds collected from the wealth tax shall be deposited pursuant to the requirements 13 |
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| 131 | 131 | | of this chapter. 14 |
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| 132 | 132 | | 44-72-3. When taxes and tax returns are due. 15 |
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| 133 | 133 | | (a)(1) Except as otherwise provided in this section, each resident owing tax under this 16 |
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| 134 | 134 | | chapter shall file, on forms prescribed by the department, a return with the department on or before 17 |
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| 135 | 135 | | April 15th each year reporting that person's taxable worldwide wealth for the immediate preceding 18 |
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| 136 | 136 | | calendar year, and such other information the department determines necessary to administer the 19 |
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| 137 | 137 | | tax imposed under this chapter. 20 |
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| 138 | 138 | | (2)(i) Except as provided in subsection (a)(2)(ii) of this section, returns and all supporting 21 |
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| 139 | 139 | | documents shall be filed electronically using the department's online tax filing service or other 22 |
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| 140 | 140 | | method of electronic reporting as the department may authorize. 23 |
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| 141 | 141 | | (ii) The department may waive the electronic filing requirement in this subsection for good 24 |
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| 142 | 142 | | cause as outlined below. 25 |
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| 143 | 143 | | (b)(1) Except as otherwise provided in this subsection, spouses and state registered 26 |
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| 144 | 144 | | domestic partners shall jointly file returns required under this section. 27 |
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| 145 | 145 | | (2)(i) A spouse or state registered domestic partner may petition the department, on a form 28 |
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| 146 | 146 | | and in a format as required by the department, for permission to file a separate return. The 29 |
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| 147 | 147 | | department may grant the petition only if it finds that good cause exists for allowing the petitioner 30 |
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| 148 | 148 | | to file a separate return. 31 |
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| 149 | 149 | | (ii) For purposes of this subsection, "good cause" means: 32 |
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| 150 | 150 | | (A) The petitioner reasonably believes that the non-petitioning spouse or state registered 33 |
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| 151 | 151 | | domestic partner will not cooperate in the filing of a complete and accurate joint return; or 34 |
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| 152 | 152 | | |
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| 153 | 153 | | |
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| 154 | 154 | | LC002281 - Page 5 of 10 |
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| 155 | 155 | | (B) Any other circumstance that, in the department's judgment, renders the filing of a joint 1 |
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| 156 | 156 | | return manifestly unreasonable. 2 |
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| 157 | 157 | | (c) Each resident required to file a return under this section shall, without assessment, 3 |
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| 158 | 158 | | notice, or demand, pay any tax due under this chapter to the department on or before the due date 4 |
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| 159 | 159 | | of the return, regardless of any filing extension granted by the department. The tax shall be paid by 5 |
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| 160 | 160 | | electronic funds transfer or by other forms of electronic payment as may be authorized by the 6 |
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| 161 | 161 | | department. The department may waive the electronic payment requirement for good cause. 7 |
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| 162 | 162 | | (d)(1) If any return due under subsection (a) of this section is not filed with the department 8 |
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| 163 | 163 | | by the due date or any extension granted by the department, the department shall assess a penalty 9 |
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| 164 | 164 | | in the amount of five percent (5%) of the tax due for the tax year covered by the return for each 10 |
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| 165 | 165 | | month or portion of a month that the return remains unfiled. The total penalty assessed under this 11 |
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| 166 | 166 | | subsection may not exceed twenty-five percent (25%) of the tax due for the tax year covered by the 12 |
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| 167 | 167 | | delinquent return. The penalty under this subsection is in addition to any penalties assessed for the 13 |
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| 168 | 168 | | late payment of any tax due on the return. 14 |
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| 169 | 169 | | (2) The department shall waive the penalty imposed under this subsection if: 15 |
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| 170 | 170 | | (i) The department is persuaded that the person's failure to file the return by the due date 16 |
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| 171 | 171 | | was due to circumstances beyond the person's control; or 17 |
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| 172 | 172 | | (ii) The person has not been delinquent in filing any return due under this section during 18 |
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| 173 | 173 | | the preceding five (5) calendar years. 19 |
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| 174 | 174 | | 44-72-4. Administrative provisions. 20 |
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| 175 | 175 | | The department may adopt any rules it considers useful in administering the tax under this 21 |
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| 176 | 176 | | chapter. 22 |
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| 177 | 177 | | 44-72-5. Exemptions. 23 |
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| 178 | 178 | | Exemptions from the tax imposed under § 44-72-3 are provided for: 24 |
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| 179 | 179 | | (1) Up to twenty-five million dollars ($25,000,000) of a taxpayer's financial intangible 25 |
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| 180 | 180 | | assets. For purposes of this exemption, both spouses or state registered domestic partners are 26 |
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| 181 | 181 | | considered to be one taxpayer. If the department authorizes the filing of separate returns for a tax 27 |
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| 182 | 182 | | year, each spouse or state registered domestic partner is entitled to claim one-half of the exemption 28 |
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| 183 | 183 | | provided under this subsection for that tax year; 29 |
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| 184 | 184 | | (2) Nonfinancial intangible assets; 30 |
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| 185 | 185 | | (3) Worldwide wealth of artificial persons; provided, however, the exemption provided in 31 |
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| 186 | 186 | | this subsection does not affect the computation of a natural person's worldwide wealth; 32 |
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| 187 | 187 | | (4) Any obligations or evidences of debt of the United States and obligations of United 33 |
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| 188 | 188 | | States government agencies and corporations established by acts of the congress of the United 34 |
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| 189 | 189 | | |
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| 190 | 190 | | |
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| 191 | 191 | | LC002281 - Page 6 of 10 |
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| 192 | 192 | | States to the extent required by federal law to be exempt from taxation by the states; 1 |
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| 193 | 193 | | (5) Any obligations or evidences of debt of the State of Rhode Island and its agencies, 2 |
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| 194 | 194 | | instrumentalities, political subdivisions, and municipal corporations, which include municipal 3 |
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| 195 | 195 | | bonds; 4 |
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| 196 | 196 | | (6) Any stock of the federal reserve bank, the government national mortgage association, 5 |
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| 197 | 197 | | the federal national mortgage association, and other corporations and associations established by 6 |
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| 198 | 198 | | acts of the congress of the United States; and 7 |
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| 199 | 199 | | (7) Any property subject to ad valorem taxation. 8 |
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| 200 | 200 | | 44-72-6. Credit for similar wealth tax paid to another state. 9 |
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| 201 | 201 | | (a) Except as provided in subsection (b) of this section, a person subject to tax under this 10 |
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| 202 | 202 | | chapter is allowed a credit against the tax otherwise due under this chapter equal to the amount of 11 |
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| 203 | 203 | | any similar wealth tax legally imposed on, and paid by, the person to another state for the same tax 12 |
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| 204 | 204 | | year on financial intangible assets subject to tax under this chapter. Credit under this section may 13 |
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| 205 | 205 | | not exceed the tax otherwise due under this chapter and may not be carried forward or backward to 14 |
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| 206 | 206 | | another tax year. Unused credit is not refundable. 15 |
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| 207 | 207 | | (b) No credit may be claimed under this section if: 16 |
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| 208 | 208 | | (1) The other state does not provide a substantially similar credit against its wealth tax; or 17 |
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| 209 | 209 | | (2) The taxpayer was domiciled in Rhode Island for a greater amount of time than in the 18 |
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| 210 | 210 | | other state during the tax year. 19 |
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| 211 | 211 | | (c) For purposes of this section, a similar wealth tax does not include an estate tax, 20 |
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| 212 | 212 | | inheritance tax, net income tax, gross receipts tax, other business activity tax, or similar tax. A tax 21 |
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| 213 | 213 | | on the value of property may be considered to be a similar wealth tax even though taxpayers are 22 |
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| 214 | 214 | | allowed a deduction for their liabilities in computing the tax. 23 |
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| 215 | 215 | | 44-72-7. Innocent spouse relief. 24 |
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| 216 | 216 | | (a) An individual who is required to jointly file a return under this chapter may petition the 25 |
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| 217 | 217 | | department for relief from joint and several liability for an assessment of taxes due under this 26 |
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| 218 | 218 | | chapter, including penalties and interest. Relief under this section is available only to the extent 27 |
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| 219 | 219 | | that the individual establishes by clear, cogent, and convincing evidence that the petitioner is 28 |
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| 220 | 220 | | entitled to relief under this section. The petition shall be made on a form and in a format prescribed 29 |
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| 221 | 221 | | by the department. 30 |
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| 222 | 222 | | (b) An individual is entitled to relief from joint and several liability under this section only 31 |
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| 223 | 223 | | if the petitioner establishes that all of the following criteria have been met: 32 |
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| 224 | 224 | | (1) The individual jointly filed a return under this chapter for a taxable year; 33 |
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| 225 | 225 | | (2) There is an understatement of tax due on the jointly filed return that is attributable to 34 |
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| 226 | 226 | | |
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| 227 | 227 | | |
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| 228 | 228 | | LC002281 - Page 7 of 10 |
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| 229 | 229 | | erroneous reporting of assets by the non-petitioning current or former spouse or state registered 1 |
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| 230 | 230 | | domestic partner; 2 |
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| 231 | 231 | | (3) The individual seeking relief establishes that the petitioner did not know, and had no 3 |
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| 232 | 232 | | reason to know, that there was such an understatement; and 4 |
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| 233 | 233 | | (4) Taking into account all the facts and circumstances, it is manifestly inequitable to hold 5 |
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| 234 | 234 | | the individual seeking relief liable for the deficiency in tax for such taxable year attributable to such 6 |
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| 235 | 235 | | understatement. 7 |
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| 236 | 236 | | (c) Any determination under this section shall be made without regard to community 8 |
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| 237 | 237 | | property laws. 9 |
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| 238 | 238 | | (d) If an individual seeking relief under this section establishes that they did not know, and 10 |
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| 239 | 239 | | had no reason to know, the extent of such understatement, then such individual shall be relieved of 11 |
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| 240 | 240 | | liability for tax not properly paid, including penalties and interest, for such taxable year to the extent 12 |
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| 241 | 241 | | that such liability is attributable to the portion of such understatement of which such individual did 13 |
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| 242 | 242 | | not know and had no reason to know. 14 |
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| 243 | 243 | | (e) An individual seeking relief under this section has the burden of proof with respect to 15 |
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| 244 | 244 | | establishing the portion of any deficiency allocable to such individual and the portion solely 16 |
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| 245 | 245 | | allocable to the individual's current or former spouse or state registered domestic partner. 17 |
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| 246 | 246 | | (f)(1) Notwithstanding any other provision of this section, an individual seeking relief 18 |
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| 247 | 247 | | under this section may not seek relief for taxes on wealth derived from disqualified assets. For the 19 |
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| 248 | 248 | | purposes of this subsection, "disqualified asset" means any asset or right to an asset transferred 20 |
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| 249 | 249 | | between spouses or state registered domestic partners required to jointly file a return under this 21 |
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| 250 | 250 | | chapter if the principal purpose of the transfer was the avoidance of tax. 22 |
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| 251 | 251 | | (2) Except as provided in subsection (f)(3) of this section, any transfer of assets between 23 |
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| 252 | 252 | | two (2) spouses or state registered domestic partners, required to jointly file a return under this 24 |
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| 253 | 253 | | chapter, that is made within twelve (12) months prior to December 31 of the tax year for which an 25 |
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| 254 | 254 | | individual is seeking relief under this section is presumed to be made with the principle purpose of 26 |
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| 255 | 255 | | avoidance of tax. 27 |
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| 256 | 256 | | (3) The presumption under subsection (f)(2) of this section, does not apply to any transfer 28 |
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| 257 | 257 | | pursuant to a decree of divorce, dissolution of a domestic partnership, separate maintenance action, 29 |
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| 258 | 258 | | or a written instrument incident to such action, or to any transfer that an individual establishes did 30 |
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| 259 | 259 | | not have tax avoidance as its principal purpose. 31 |
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| 260 | 260 | | (g) If relief is granted under this section, any asset giving rise to a deficiency on a jointly 32 |
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| 261 | 261 | | filed return shall be allocated to the individuals filing the return in the same manner as it would 33 |
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| 262 | 262 | | have been allocated if the individuals had filed separate returns for the taxable year. No relief 34 |
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| 263 | 263 | | |
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| 264 | 264 | | |
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| 265 | 265 | | LC002281 - Page 8 of 10 |
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| 266 | 266 | | granted under this section may reduce the combined tax liability of individuals required to jointly 1 |
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| 267 | 267 | | file a return under this chapter in any given tax year. 2 |
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| 268 | 268 | | (h) Any relief granted under this section may not result in an increase in the exemption 3 |
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| 269 | 269 | | amount allowed under § 44-72-5. Nothing in this section shall be construed to permit individuals 4 |
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| 270 | 270 | | required to jointly file a return under this chapter to claim a combined exemption exceeding the 5 |
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| 271 | 271 | | limit established in § 44-72-5. 6 |
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| 272 | 272 | | (i) An individual seeking relief under this section must file a petition with the department 7 |
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| 273 | 273 | | no later than two (2) years after the date of the department's notification of the deficiency that is 8 |
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| 274 | 274 | | the subject of the petition. 9 |
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| 275 | 275 | | (j) The department may by rule provide a method or methods for allocating assets between 10 |
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| 276 | 276 | | individuals required to jointly file returns under this chapter in cases where one of the individuals 11 |
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| 277 | 277 | | is granted relief under this section. The department may also by rule provide substantiation 12 |
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| 278 | 278 | | requirements for an individual to establish the individual's eligibility for relief under this section. 13 |
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| 279 | 279 | | (k) An individual seeking relief under this section may petition the department for a review 14 |
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| 280 | 280 | | of a denial of such relief. 15 |
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| 281 | 281 | | 44-72-8. Substantial wealth tax valuation understatement penalty imposed. 16 |
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| 282 | 282 | | (a) Except as otherwise provided in this section, if any portion of an underpayment of tax 17 |
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| 283 | 283 | | due under this chapter is due to a substantial wealth tax valuation understatement, there shall be 18 |
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| 284 | 284 | | added to the tax an amount equal to: 19 |
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| 285 | 285 | | (1) In the case of any substantial wealth tax valuation understatement that is a gross wealth 20 |
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| 286 | 286 | | tax valuation misstatement, fifty percent (50%) of the portion of the underpayment due to the 21 |
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| 287 | 287 | | valuation understatement; or 22 |
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| 288 | 288 | | (2) In all other cases, thirty percent (30%) of the portion of the underpayment due to the 23 |
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| 289 | 289 | | valuation understatement. 24 |
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| 290 | 290 | | (b) The penalty imposed under subsection (a) of this section does not apply unless the 25 |
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| 291 | 291 | | portion of the underpayment attributable to substantial wealth tax valuation understatements for the 26 |
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| 292 | 292 | | calendar year exceeds five thousand dollars ($5,000). 27 |
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| 293 | 293 | | (c) The penalty imposed in this section is in addition to any other applicable penalties 28 |
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| 294 | 294 | | imposed under this chapter. 29 |
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| 295 | 295 | | (d) For purposes of this section, the following definitions apply: 30 |
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| 296 | 296 | | (1) "Gross wealth tax valuation misstatement" means the fair market value of any financial 31 |
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| 297 | 297 | | intangible assets reported on a return is forty percent (40%) or less of the amount determined to be 32 |
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| 298 | 298 | | the correct amount of such fair market value. 33 |
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| 299 | 299 | | (b) "Substantial wealth tax valuation understatement" means the fair market value of any 34 |
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| 300 | 300 | | |
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| 301 | 301 | | |
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| 302 | 302 | | LC002281 - Page 9 of 10 |
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| 303 | 303 | | financial intangible assets reported on a return is sixty five percent (65%) or less of the amount 1 |
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| 304 | 304 | | determined to be the correct amount of such fair market value. 2 |
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| 305 | 305 | | 44-72-9. Enforcement. 3 |
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| 306 | 306 | | Beginning in calendar year 2026, to the extent that sufficient funds are specifically 4 |
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| 307 | 307 | | appropriated for this purpose, the department shall initiate audits of at least ten percent (10%) of 5 |
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| 308 | 308 | | individuals who are registered with the department to pay the tax imposed in this chapter, increasing 6 |
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| 309 | 309 | | to fifteen percent (15%) in calendar year 2027, and twenty percent (20%) in calendar year 2028 7 |
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| 310 | 310 | | and thereafter. 8 |
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| 311 | 311 | | 44-72-10. Rule of construction. 9 |
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| 312 | 312 | | The general assembly intends that any provision of this chapter that is found to be 10 |
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| 313 | 313 | | ambiguous, by a court of competent jurisdiction or administrative agency, be construed in favor of 11 |
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| 314 | 314 | | application of the tax, notwithstanding any contrary common law rule of statutory construction. 12 |
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| 315 | 315 | | 44-72-11. Severability clause. 13 |
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| 316 | 316 | | If any provision of this chapter or its application to any person or circumstance is held 14 |
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| 317 | 317 | | invalid, the remainder of the chapter or the application of the provision to other persons or 15 |
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| 318 | 318 | | circumstances is not affected. 16 |
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| 319 | 319 | | SECTION 2. This act shall take effect upon passage. 17 |
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| 320 | 320 | | ======== |
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| 321 | 321 | | LC002281 |
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| 322 | 322 | | ======== |
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| 323 | 323 | | |
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| 324 | 324 | | |
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| 325 | 325 | | LC002281 - Page 10 of 10 |
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| 326 | 326 | | EXPLANATION |
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| 327 | 327 | | BY THE LEGISLATIVE COUNCIL |
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| 328 | 328 | | OF |
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| 329 | 329 | | A N A C T |
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| 330 | 330 | | RELATING TO TAXATION -- WEALTH TAX |
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| 331 | 331 | | *** |
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| 332 | 332 | | This act would impose a wealth tax on Rhode Island individuals and entities at a rate of 1 |
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| 333 | 333 | | one percent (1%) of worldwide wealth. 2 |
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| 334 | 334 | | This act would take effect upon passage. 3 |
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| 335 | 335 | | ======== |
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| 336 | 336 | | LC002281 |
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| 337 | 337 | | ======== |
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| 338 | 338 | | |
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