2014 -- S 2079

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LC003426

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

     Introduced By: Senators Pearson, Picard, Satchell, Conley, and Kettle

     Date Introduced: January 21, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is

hereby amended by adding thereto the following section:

     44-30-28. Stay invested in RI tax credit. – (a) This section shall be known and may be

cited as the "Stay Invested in RI tax credit."

     (b) Graduates of accredited institutions of higher education and who receive an

associate's degree, a bachelor of science or arts degree, or a master's degree and who remain

residents of and employed in Rhode Island, shall be eligible for a tax credit against their personal

income tax, based upon the amount of their student loan balance, for a period of no longer than

ten (10) years after their first graduation from an accredited institution and so long as the person

remains a legal resident of and employed in Rhode Island. Said credit shall be calculated as

follows:

     (1) For each year after the person graduates as set forth in subsection (b), a person shall

be eligible to claim a tax credit against his or her personal income tax in an amount of up to ten

percent (10%) of that person's undergraduate or graduate student loan balance, up to a maximum

amount of one thousand dollars ($1,000) for an associate's degree holder, five thousand dollars

($5,000) for a bachelor's degree holder, and six thousand dollars ($6,000) for a graduate degree

holder, in any single tax year.

     (2) The tax credit provided for by this section shall be calculated using the ending

balance on the principal of the person's loan as of the last day of the tax year for which a person is

claiming the credit. Provided, the balance amount used in this calculation shall not exceed the

original loan amount plus any capitalized interest less credits previously claimed under this

section.

     (3) Provided further, a party claiming the tax credit provided for under this section shall

need to be current on his or her student loan repayment obligations in order to obtain the credit.

     (c) The division of taxation shall prepare forms to permit a person to claim the tax credit

provided for herein. The division of taxation may also promulgate rules and regulations necessary

to implement the provisions of this section.

     (d) As used herein, the term "student loan" shall mean a loan from an eligible lender. An

eligible lender, subject to further particular or more restrictive definition by regulation of the

division of taxation, means any governmental or private agency, corporation, organization, or

institution designated as an "eligible lender" by Federal statute, regulation, or administrative

ruling for the purposes of the guaranteed student loan program.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

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     This act would establish the Stay Invested in RI Tax Credit. It would authorize a tax

credit against Rhode Island personal income tax for graduates who remain a resident of and work

in Rhode Island for up to ten (10) years after graduation from an institution of higher education.

The credit would be calculated based upon the principal balance of the person's student loans.

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