2014 -- H 7488

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LC004191

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

____________

A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX - HISTORIC HOMEOWNERSHIP

ASSISTANCE

     

     Introduced By: Representatives Marshall, Shekarchi, Almeida, O`Grady, and Ackerman

     Date Introduced: February 13, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal

2

Income Tax" is hereby amended to read as follows:

3

     44-30-2.6. Rhode Island taxable income -- Rate of tax. [Effective January 1, 2011.] --

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(a) "Rhode Island taxable income" means federal taxable income as determined under the

5

Internal Revenue Code, 26 U.S.C. section 1 et seq., not including the increase in the basic

6

standard deduction amount for married couples filing joint returns as provided in the Jobs and

7

Growth Tax Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief

8

Reconciliation Act of 2001 (EGTRRA), and as modified by the modifications in section 44-30-

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12.

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     (b) Notwithstanding the provisions of sections 44-30-1 and 44-30-2, for tax years

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beginning on or after January 1, 2001, a Rhode Island personal income tax is imposed upon the

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Rhode Island taxable income of residents and nonresidents, including estates and trusts, at the rate

13

of twenty-five and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for

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tax year 2002 and thereafter of the federal income tax rates, including capital gains rates and any

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other special rates for other types of income, except as provided in section 44-30-2.7, which were

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in effect immediately prior to enactment of the Economic Growth and Tax Relief Reconciliation

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Act of 2001 (EGTRRA); provided, rate schedules shall be adjusted for inflation by the tax

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administrator beginning in taxable year 2002 and thereafter in the manner prescribed for

 

1

adjustment by the commissioner of Internal Revenue in 26 U.S.C. section 1(f). However, for tax

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years beginning on or after January 1, 2006, a taxpayer may elect to use the alternative flat tax

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rate provided in section 44-30-2.10 to calculate his or her personal income tax liability.

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     (c) For tax years beginning on or after January 1, 2001, if a taxpayer has an alternative

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minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode

6

Island alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by

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multiplying the federal tentative minimum tax without allowing for the increased exemptions

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under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal

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form 6251 Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%)

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for tax year 2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing

11

the product to the Rhode Island tax as computed otherwise under this section. The excess shall be

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the taxpayer's Rhode Island alternative minimum tax.

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     (1) For tax years beginning on or after January 1, 2005 and thereafter the exemption

14

amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by

15

the tax administrator in the manner prescribed for adjustment by the commissioner of Internal

16

Revenue in 26 U.S.C. section 1(f).

17

     (2) For the period January 1, 2007 through December 31, 2007, and thereafter, Rhode

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Island taxable income shall be determined by deducting from federal adjusted gross income as

19

defined in 26 U.S.C. section 62 as modified by the modifications in section 44-30-12 the Rhode

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Island itemized deduction amount and the Rhode Island exemption amount as determined in this

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section.

22

     (A) Tax imposed.

23

     (1) There is hereby imposed on the taxable income of married individuals filing joint

24

returns and surviving spouses a tax determined in accordance with the following table:

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     If taxable income is: The tax is:

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     Not over $53,150 3.75% of taxable income

27

     Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the

28

excess over $53,150

29

     Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the

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excess over $128,500

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     Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the

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excess over $195,850

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     Over $349,700 $26,333.75 plus 9.90% of the

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excess over $349,700

 

LC004191 - Page 2 of 16

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      (2) There is hereby imposed on the taxable income of every head of household a tax

2

determined in accordance with the following table:

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     If taxable income is: The tax is:

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     Not over $42,650 3.75% of taxable income

5

     Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the

6

excess over $42,650

7

     Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the

8

excess over $110,100

9

     Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the

10

excess over $178,350

11

     Over $349,700 $27,031.75 plus 9.90% of the

12

excess over $349,700

13

      (3) There is hereby imposed on the taxable income of unmarried individuals (other than

14

surviving spouses and heads of households) a tax determined in accordance with the following

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table:

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     If taxable income is: The tax is:

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     Not over $31,850 3.75% of taxable income

18

     Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the

19

excess over $31,850

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     Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the

21

excess over $77,100

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     Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the

23

excess over $160,850

24

     Over $349,700 $27,849.00 plus 9.90% of the

25

excess over $349,700

26

      (4) There is hereby imposed on the taxable income of married individuals filing separate

27

returns and bankruptcy estates a tax determined in accordance with the following table:

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     If taxable income is: The tax is:

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     Not over $26,575 3.75% of taxable income

30

     Over $26,575 but not over $64,250 $996.56 plus 7.00% of the

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excess over $26,575

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     Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the

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excess over $64,250

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     Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the

 

LC004191 - Page 3 of 16

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excess over $97,925

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     Over $174,850 $13,166.88 plus 9.90% of the

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excess over $174,850

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      (5) There is hereby imposed a taxable income of an estate or trust a tax determined in

5

accordance with the following table:

6

     If taxable income is: The tax is:

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     Not over $2,150 3.75% of taxable income

8

     Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess

9

over $2,150

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     Over $5,000 but not over $7,650 $280.13 plus 7.75% of the

11

excess over $5,000

12

     Over $7,650 but not over $10,450 $485.50 plus 9.00% of the

13

excess over $7,650

14

     Over $10,450 $737.50 plus 9.90% of the

15

excess over $10,450

16

      (6) Adjustments for inflation.

17

     The dollars amount contained in paragraph (A) shall be increased by an amount equal to:

18

(a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by;

19

     (b) The cost-of-living adjustment determined under section (J) with a base year of 1993;

20

(c) The cost-of-living adjustment referred to in subparagraph (a) and (b) used in making

21

adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall

22

be determined under section (J) by substituting "1994" for "1993."

23

     (B) Maximum capital gains rates

24

     (1) In general

25

     If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax

26

imposed by this section for such taxable year shall not exceed the sum of:

27

     (a) 2.5 % of the net capital gain as reported for federal income tax purposes under section

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26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b).

29

     (b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.

30

1(h)(1)(c).

31

     (c) 6.25% of the net capital gain as reported for federal income tax purposes under 26

32

U.S.C. 1(h)(1)(d).

33

     (d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.

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1(h)(1)(e).

 

LC004191 - Page 4 of 16

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     (2) For tax years beginning on or after January 1, 2010 the tax imposed on net capital

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gain shall be determined under subdivision 44-30-2.6(c)(2)(A).

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     (C) Itemized deductions.

4

     (1) In general

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     For the purposes of section (2) "itemized deductions" means the amount of federal

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itemized deductions as modified by the modifications in section 44-30-12.

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     (2) Individuals who do not itemize their deductions

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     In the case of an individual who does not elect to itemize his deductions for the taxable

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year, they may elect to take a standard deduction.

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     (3) Basic standard deduction.

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     The Rhode Island standard deduction shall be allowed in accordance with the following

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table:

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     Filing status Amount

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     Single $5,350

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     Married filing jointly or qualifying widow(er) $8,900

16

     Married filing separately $4,450

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     Head of Household $7,850

18

     (4) Additional standard deduction for the aged and blind.

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     An additional standard deduction shall be allowed for individuals age sixty-five (65) or

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older or blind in the amount of $1,300 for individuals who are not married and $1,050 for

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individuals who are married.

22

     (5) Limitation on basic standard deduction in the case of certain dependents.

23

     In the case of an individual to whom a deduction under section (E) is allowable to another

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taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater

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of:

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     (a) $850;

27

     (b) The sum of $300 and such individual's earned income;

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     (6) Certain individuals not eligible for standard deduction.

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     In the case of:

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     (a) A married individual filing a separate return where either spouse itemizes deductions;

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(b) Nonresident alien individual;

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     (c) An estate or trust;

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     The standard deduction shall be zero.

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     (7) Adjustments for inflation.

 

LC004191 - Page 5 of 16

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     Each dollars amount contained in paragraphs (3), (4) and (5) shall be increased by an

2

amount equal to:

3

     (a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988,

4

multiplied by

5

     (b) The cost-of-living adjustment determined under section (J) with a base year of 1988.

6

(D) Overall limitation on itemized deductions

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     (1) General rule.

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     In the case of an individual whose adjusted gross income as modified by section 44-30-12

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exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the

10

taxable year shall be reduced by the lesser of:

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     (a) Three percent (3%) of the excess of adjusted gross income as modified by section 44-

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30-12 over the applicable amount; or

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     (b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable

14

for such taxable year.

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     (2) Applicable amount.

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     (a) In general.

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     For purposes of this section, the term "applicable amount" means $156,400 ($78,200 in

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the case of a separate return by a married individual)

19

     (b) Adjustments for inflation.

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     Each dollar amount contained in paragraph (a) shall be increased by an amount equal to:

21

(i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by

22

     (ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.

23

(3) Phase-out of Limitation.

24

     (a) In general.

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     In the case of taxable year beginning after December 31, 2005, and before January 1,

26

2010, the reduction under section (1) shall be equal to the applicable fraction of the amount which

27

would be the amount of such reduction.

28

     (b) Applicable fraction.

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     For purposes of paragraph (a), the applicable fraction shall be determined in accordance

30

with the following table:

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     For taxable years beginning in The applicable fraction is

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calendar year

33

     2006 and 2007 2/3

34

     2008 and 2009 1/3

 

LC004191 - Page 6 of 16

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      (E) Exemption amount

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     (1) In general.

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     Except as otherwise provided in this subsection, the term "exemption amount" mean

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$3,400.

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     (2) Exemption amount disallowed in case of certain dependents. In the case of an

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individual with respect to whom a deduction under this section is allowable to another taxpayer

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for the same taxable year, the exemption amount applicable to such individual for such

8

individual's taxable year shall be zero.

9

     (3) Adjustments for inflation.

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     The dollar amount contained in paragraph (1) shall be increased by an amount equal to:

11

(a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by

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     (b) The cost-of-living adjustment determined under section (J) with a base year of 1989.

13

(4) Limitation.

14

     (a) In general.

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     In the case of any taxpayer whose adjusted gross income as modified for the taxable year

16

exceeds the threshold amount shall be reduced by the applicable percentage.

17

     (b) Applicable percentage.

18

     In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the

19

threshold amount, the exemption amount shall be reduced by two (2) percentage points for each

20

$2,500 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year

21

exceeds the threshold amount. In the case of a married individual filing a separate return, the

22

preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no event shall the

23

applicable percentage exceed one hundred percent (100%).

24

     (c) Threshold Amount.

25

     For the purposes of this paragraph, the term "threshold amount" shall be determined with

26

the following table:

27

      Filing status Amount

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     Single $156,400

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     Married filing jointly of qualifying widow(er) $234,600

30

     Married filing separately $117,300

31

     Head of Household $195,500

32

      (d) Adjustments for inflation.

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     Each dollars amount contain in paragraph (b) shall be increased by an amount equal to:

34

(i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by

 

LC004191 - Page 7 of 16

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     (ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.

2

(5) Phase-out of Limitation.

3

     (a) In general.

4

     In the case of taxable years beginning after December 31, 2005, and before January 1,

5

2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which

6

would be the amount of such reduction.

7

     (b) Applicable fraction.

8

     For the purposes of paragraph (a), the applicable fraction shall be determined in

9

accordance with the following table:

10

     For taxable years beginning in The applicable fraction is

11

calendar year

12

     2006 and 2007 2/3

13

     2008 and 2009 1/3

14

      (F) Alternative minimum tax

15

     (1) General rule. - There is hereby imposed (in addition to any other tax imposed by this

16

subtitle) a tax equal to the excess (if any) of:

17

     (a) The tentative minimum tax for the taxable year, over

18

     (b) The regular tax for the taxable year.

19

     (2) The tentative minimum tax for the taxable year is the sum of:

20

     (a) 6.5 percent of so much of the taxable excess as does not exceed $175,000, plus

21

     (b) 7.0 percent of so much of the taxable excess above $175,000.

22

     (3) The amount determined under the preceding sentence shall be reduced by the

23

alternative minimum tax foreign tax credit for the taxable year.

24

     (4) Taxable excess. - For the purposes of this subsection the term "taxable excess" means

25

so much of the federal alternative minimum taxable income as modified by the modifications in

26

section 44-30-12 as exceeds the exemption amount.

27

     (5) In the case of a married individual filing a separate return, subparagraph (2) shall be

28

applied by substituting "$87,500" for $175,000 each place it appears.

29

     (6) Exemption amount.

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     For purposes of this section "exemption amount" means:

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     Filing status Amount

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     Single $39,150

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     Married filing jointly or qualifying widow(er) $53,700

34

     Married filing separately $26,850

 

LC004191 - Page 8 of 16

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     Head of Household $39,150

2

     Estate or trust $24,650

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     (7) Treatment of unearned income of minor children

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     (a) In general.

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     In the case of a minor child, the exemption amount for purposes of section (6) shall not

6

exceed the sum of:

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     (i) Such child's earned income, plus

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     (ii) $6,000.

9

     (8) Adjustments for inflation.

10

     The dollar amount contained in paragraphs (6) and (7) shall be increased by an amount

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equal to:

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     (a) Such dollar amount contained in paragraphs (6) and (7) in the year 2004, multiplied

13

by

14

     (b) The cost-of-living adjustment determined under section (J) with a base year of 2004.

15

(9) Phase-out.

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     (a) In general.

17

     The exemption amount of any taxpayer shall be reduced (but not below zero) by an

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amount equal to twenty-five percent (25%) of the amount by which alternative minimum taxable

19

income of the taxpayer exceeds the threshold amount.

20

     (b) Threshold amount.

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     For purposes of this paragraph, the term "threshold amount" shall be determined with the

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following table:

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     Filing status Amount

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     Single $123,250

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     Married filing jointly or qualifying widow(er) $164,350

26

     Married filing separately $82,175

27

     Head of Household $123,250

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     (c) Adjustments for inflation

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     Each dollar amount contained in paragraph (9) shall be increased by an amount equal to:

30

     (i) Such dollar amount contained in paragraph (9) in the year 2004, multiplied by

31

     (ii) The cost-of-living adjustment determined under section (J) with a base year of 2004.

32

     (G) Other Rhode Island taxes

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     (1) General rule. - There is hereby imposed (in addition to any other tax imposed by this

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subtitle) a tax equal to twenty-five percent (25%) of:

 

LC004191 - Page 9 of 16

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     (a) The Federal income tax on lump-sum distributions.

2

     (b) The Federal income tax on parents' election to report child's interest and dividends.

3

     (c) The recapture of Federal tax credits that were previously claimed on Rhode Island

4

return.

5

     (H) Tax for children under 18 with investment income

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     (1) General rule. - There is hereby imposed a tax equal to twenty-five percent (25%) of:

7

(a) The Federal tax for children under the age of 18 with investment income.

8

     (I) Averaging of farm income

9

     (1) General rule. - At the election of an individual engaged in a farming business or

10

fishing business, the tax imposed in section 2 shall be equal to twenty-five percent (25%) of:

11

     (a) The Federal averaging of farm income as determined in IRC section 1301.

12

     (J) Cost-of-living adjustment

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     (1) In general.

14

     The cost-of-living adjustment for any calendar year is the percentage (if any) by which:

15

     (a) The CPI for the preceding calendar year exceeds

16

     (b) The CPI for the base year.

17

     (2) CPI for any calendar year. For purposes of paragraph (1), the CPI for any calendar

18

year is the average of the Consumer Price Index as of the close of the twelve (12) month period

19

ending on August 31 of such calendar year.

20

     (3) Consumer Price Index

21

     For purposes of paragraph (2), the term "consumer price index" means the last consumer

22

price index for all urban consumers published by the department of labor. For purposes of the

23

preceding sentence, the revision of the consumer price index which is most consistent with the

24

consumer price index for calendar year 1986 shall be used.

25

     (4) Rounding.

26

     (a) In general.

27

     If any increase determined under paragraph (1) is not a multiple of $50, such increase

28

shall be rounded to the next lowest multiple of $50.

29

     (b) In the case of a married individual filing a separate return, subparagraph (a) shall be

30

applied by substituting "$25" for $50 each place it appears.

31

     (K) Credits against tax. - For tax years beginning on or after January 1, 2001, a taxpayer

32

entitled to any of the following federal credits enacted prior to January 1, 1996 shall be entitled to

33

a credit against the Rhode Island tax imposed under this section:

34

     (1) [Deleted by P.L. 2007, ch. 73, art. 7, section 5].

 

LC004191 - Page 10 of 16

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     (2) Child and dependent care credit;

2

     (3) General business credits;

3

     (4) Credit for elderly or the disabled;

4

     (5) Credit for prior year minimum tax;

5

     (6) Mortgage interest credit;

6

     (7) Empowerment zone employment credit;

7

     (8) Qualified electric vehicle credit.

8

     (L) Credit against tax for adoption. - For tax years beginning on or after January 1, 2006,

9

a taxpayer entitled to the federal adoption credit shall be entitled to a credit against the Rhode

10

Island tax imposed under this section if the adopted child was under the care, custody, or

11

supervision of the Rhode Island department of children, youth and families prior to the adoption.

12

     (M) The credit shall be twenty-five percent (25%) of the aforementioned federal credits

13

provided there shall be no deduction based on any federal credits enacted after January 1, 1996,

14

including the rate reduction credit provided by the federal Economic Growth and Tax

15

Reconciliation Act of 2001 (EGTRRA). In no event shall the tax imposed under this section be

16

reduced to less than zero. A taxpayer required to recapture any of the above credits for federal tax

17

purposes shall determine the Rhode Island amount to be recaptured in the same manner as

18

prescribed in this subsection.

19

     (N) Rhode Island earned income credit

20

     (1) In general.

21

     A taxpayer entitled to a federal earned income credit shall be allowed a Rhode Island

22

earned income credit equal to twenty-five percent (25%) of the federal earned income credit.

23

Such credit shall not exceed the amount of the Rhode Island income tax.

24

     (2) Refundable portion.

25

     In the event the Rhode Island earned income credit allowed under section (J) exceeds the

26

amount of Rhode Island income tax, a refundable earned income credit shall be allowed.

27

     (a) For purposes of paragraph (2) refundable earned income credit means fifteen percent

28

(15%) of the amount by which the Rhode Island earned income credit exceeds the Rhode Island

29

income tax.

30

     (O) The tax administrator shall recalculate and submit necessary revisions to paragraphs

31

(A) through (J) to the general assembly no later than February 1, 2010 and every three (3) years

32

thereafter for inclusion in the statute.

33

     (3) For the period January 1, 2011 through December 31, 2011, and thereafter, "Rhode

34

Island taxable income" means federal adjusted gross income as determined under the Internal

 

LC004191 - Page 11 of 16

1

Revenue Code, 26 U.S.C. 1 et seq., and as modified for Rhode Island purposes pursuant to

2

section 44-30-12 less the amount of Rhode Island Basic Standard Deduction allowed pursuant to

3

subparagraph 44-30-2.6(c)(3)(B), and less the amount of personal exemption allowed pursuant of

4

subparagraph 44-30-2.6(c)(3)(C).

5

     (A) Tax imposed.

6

     (I) There is hereby imposed on the taxable income of married individuals filing joint

7

returns, qualifying widow(er), every head of household, unmarried individuals, married

8

individuals filing separate returns and bankruptcy estates, a tax determined in accordance with the

9

following table:

10

     RI Taxable Income RI Income Tax

11

     Over But not over Pay + % on Excess on the amount

12

      over

13

     $ 0 - $ 55,000 $ 0 + 3.75% $ 0

14

     55,000 - 125,000 2,063 + 4.75% 55,000

15

     125,000 - 5,388 + 5.99% 125,000

16

      (II) There is hereby imposed on the taxable income of an estate or trust a tax determined

17

in accordance with the following table:

18

     RI Taxable Income RI Income Tax

19

     Over But not over Pay + % Over - Excess on the amount

20

      over

21

     $ 0 - $ 2,230 $ 0 + 3.75% $ 0

22

     2,230 - 7,022 84 + 4.75% 2,230

23

     7,022 - 312 + 5.99% 7,022

24

      (B) Deductions:

25

     (I) Rhode Island Basic Standard Deduction. Only the Rhode Island standard deduction

26

shall be allowed in accordance with the following table:

27

     Filing status: Amount

28

     Single $7,500

29

     Married filing jointly or qualifying widow(er) $15,000

30

     Married filing separately $7,500

31

     Head of Household $11,250

32

      (II) Nonresident alien individuals, estates and trusts are not eligible for standard

33

deductions.

34

     (III) In the case of any taxpayer whose adjusted gross income, as modified for Rhode

 

LC004191 - Page 12 of 16

1

Island purposes pursuant to section 44-30-12, for the taxable year exceeds one hundred seventy-

2

five thousand dollars ($175,000), the standard deduction amount shall be reduced by the

3

applicable percentage. The term "applicable percentage" means twenty (20) percentage points for

4

each five thousand dollars ($5,000) (or fraction thereof) by which the taxpayer's adjusted gross

5

income for the taxable year exceeds one hundred seventy-five thousand dollars ($175,000).

6

     (C) Exemption Amount:

7

     (I) The term "exemption amount" means three thousand five hundred dollars ($3,500)

8

multiplied by the number of exemptions allowed for the taxable year for federal income tax

9

purposes.

10

     (II) Exemption amount disallowed in case of certain dependents. In the case of an

11

individual with respect to whom a deduction under this section is allowable to another taxpayer

12

for the same taxable year, the exemption amount applicable to such individual for such

13

individual's taxable year shall be zero.

14

     (D) In the case of any taxpayer whose adjusted gross income, as modified for Rhode

15

Island purposes pursuant to section 33-30-12, for the taxable year exceeds one hundred seventy-

16

five thousand dollars ($175,000), the exemption amount shall be reduced by the applicable

17

percentage. The term "applicable percentage" means twenty (20) percentage points for each five

18

thousand dollars ($5,000) (or fraction thereof) by which the taxpayer's adjusted gross income for

19

the taxable year exceeds one hundred seventy-five thousand dollars ($175,000).

20

     (E) Adjustment for inflation. - The dollar amount contained in subparagraphs 44-30-

21

2.6(c)(3)(A), 44-30-2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) shall be increased annually by an amount

22

equal to:

23

     (I) Such dollar amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30-

24

2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) adjusted for inflation using a base tax year of 2000,

25

multiplied by;

26

     (II) The cost-of-living adjustment with a base year of 2000.

27

     (III) For the purposes of this section the cost-of-living adjustment for any calendar year is

28

the percentage (if any) by which the consumer price index for the preceding calendar year

29

exceeds the consumer price index for the base year. The consumer price index for any calendar

30

year is the average of the consumer price index as of the close of the twelve (12) month period

31

ending on August 31, of such calendar year.

32

     (IV) For the purpose of this section the term "consumer price index" means the last

33

consumer price index for all urban consumers published by the department of labor. For the

34

purpose of this section the revision of the consumer price index which is most consistent with the

 

LC004191 - Page 13 of 16

1

consumer price index for calendar year 1986 shall be used.

2

     (V) If any increase determined under this section is not a multiple of fifty dollars

3

($50.00), such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the

4

case of a married individual filing separate return, if any increase determined under this section is

5

not a multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower

6

multiple of twenty-five dollars ($25.00).

7

     (E) Credits against tax.

8

     (I) Notwithstanding any other provisions of Rhode Island Law, for tax years beginning on

9

or after January 1, 2011, the only credits allowed against a tax imposed under this chapter shall be

10

as follows:

11

     (a) Rhode Island Earned Income Credit: Credit shall be allowed for earned income credit

12

pursuant to subparagraph 44-30-2.6(c)(2)(N).

13

     (b) Property Tax Relief Credit: Credit shall be allowed for property tax relief as provided

14

in section 44-33-1 et seq.

15

     (c) Lead Paint Credit: Credit shall be allowed for residential lead abatement income tax

16

credit as provided in section 44-30.3-1 et seq.

17

     (d) Credit for income taxes of other states. - Credit shall be allowed for income tax paid

18

to other states pursuant to section 44-30-74.

19

     (e) Historic Structures Tax Credit: Credit shall be allowed for historic structures tax

20

credit as provided in section 44-33.2-1 et seq.

21

     (f) Motion Picture Productions Tax Credit: Credit shall be allowed for motion picture

22

production tax credit as provided in section 44-31.2-1 et seq.

23

     (g) Child and Dependent Care: Credit shall be allowed for twenty-five percent (25%) of

24

the federal child and dependent care credit allowable for the taxable year for federal purposes;

25

provided, however, such credit shall not exceed the Rhode Island tax liability.

26

     (h) Tax credits for contributions to Scholarship Organizations: Credit shall be allowed for

27

contributions to scholarship organizations as provided in section 44-62 et seq.

28

     (i) Historic Homeownership Assistance: Credit shall be allowed for maintenance and

29

rehabilitation of historic residences as provided in chapter 44-33.1 et seq., and provided further,

30

any person who has qualified for credits provided in chapter 44-33.1 et seq. at any time prior to

31

the passage of this act shall be considered approved for the credit without the necessity of a new

32

application.

33

     (i)(j) Credit for tax withheld. - Wages upon which tax is required to be withheld shall be

34

taxable as if no withholding were required, but any amount of Rhode Island personal income tax

 

LC004191 - Page 14 of 16

1

actually deducted and withheld in any calendar year shall be deemed to have been paid to the tax

2

administrator on behalf of the person from whom withheld, and the person shall be credited with

3

having paid that amount of tax for the taxable year beginning in that calendar year. For a taxable

4

year of less than twelve (12) months, the credit shall be made under regulations of the tax

5

administrator.

6

     (2) Except as provided in section 1 above, no other state and federal tax credit shall be

7

available to the taxpayers in computing tax liability under this chapter.

8

     SECTION 2. This act shall take effect upon passage.

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LC004191 - Page 15 of 16

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX - HISTORIC HOMEOWNERSHIP

ASSISTANCE

***

1

     This act would allow a credit for the maintenance and rehabilitation of historic residences

2

under the Historic Homeownership Assistance Act and would further authorize any person who

3

had previously qualified under the Act to reward themselves to the benefits thereof without a

4

renewal application.

5

     This act would take effect upon passage.

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LC004191 - Page 16 of 16