2014 -- S 2143

========

LC003856

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

____________

A N   A C T

RELATING TO TAXATION - ESTATE AND TRANSFER TAXES - COMPUTATION

     Introduced By: Senators Felag, Bates, McCaffrey, Jabour, and Walaska

     Date Introduced: January 29, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-22-1.1 of the General Laws in Chapter 44-22 entitled “Estate

and Transfer Taxes - Liability and Computation” is hereby amended to read as follows:

     44-22-1.1. Tax on net estate of decedent. -- (a) (1) For decedents whose death occurs on

or after January 1, 1992, but prior to January 1, 2002, a tax is imposed upon the transfer of the net

estate of every resident or nonresident decedent as a tax upon the right to transfer. The tax is a

sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. § 2011.

     (2) For decedents whose death occurs on or after January 1, 2002, but prior to January 1,

2010 a tax is imposed upon the transfer of the net estate of every resident or nonresident decedent

as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for state death

taxes allowed by 26 U.S.C. § 2011 as it was in effect as of January 1, 2001; provided, however,

that the tax shall be imposed only if the net taxable estate shall exceed six hundred seventy-five

thousand dollars ($675,000). Any scheduled increase in the unified credit provided in 26 U.S.C. §

2010 in effect on January 1, 2001, or thereafter, shall not apply.

       (3) For decedents whose death occurs on or after January 1, 2010, a tax is imposed upon

the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to

transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C.

§ 2011 as it was in effect as of January 1, 2001; provided, however, that the tax shall be imposed

only if the net taxable estate shall exceed eight hundred and fifty thousand dollars ($850,000) ;

provided, further, beginning on January 1, 2011 and each January 1 thereafter, said amount shall

be adjusted by the percentage of increase in the Consumer Price Index for all Urban Consumers

(CPI-U) as published by the United States Department of Labor Statistics determined as of

September 30 of the prior calendar year; said adjustment shall be compounded annually and shall

be rounded up to the nearest five dollar ($5.00) increment. Any scheduled increase in the unified

credit provided in 26 U.S.C. § 2010 in effect on January 1, 2003, or thereafter, shall not apply.

     (4) For decedents whose death occurs on or after January 1, 2015, a tax is imposed upon

the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to

transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C.

2011 as it was in effect as of January 1, 2001; provided, however, that the tax shall be imposed

only if the net taxable estate shall exceed one million five hundred thousand dollars ($1,500,000);

provided, further, beginning on January 1, 2016 and each January 1 thereafter, said amount shall

be adjusted by the percentage of increase in the Consumer Price Index for all Urban Consumers

(CPI-U) as published by the United States Department of Labor Statistics determined as of

September 30 of the prior calendar year; said adjustment shall be compounded annually and shall

be rounded up to the nearest five dollar ($5.00) increment. Any scheduled increase in the unified

credit provided in 26 U.S.C. 2010 in effect on January 1, 2003, or thereafter, shall not apply.

     (b) If the decedent's estate contains property having a tax situs not within the state, then

the tax determined by this section is reduced to an amount determined by multiplying the tax by a

fraction whose numerator is the gross estate excluding all property having a tax situs not within

the state at the decedent's death and whose denominator is the gross estate. In determining the

fraction, no deductions are considered and the gross estate is not reduced by a mortgage or other

indebtedness for which the decedent's estate is not liable.

     (c) The terms "gross taxable estate", "federal gross estate" or "net taxable estate" used in

this chapter or chapter 23 of this title has the same meaning as when used in a comparable context

in the laws of the United States, unless a different meaning is clearly required by the provisions of

this chapter or chapter 23 of this title. Any reference in this chapter or chapter 23 of this title to

the Internal Revenue Code or other laws of the United States means the Internal Revenue Code of

1954, 26 U.S.C. § 1 et seq.

      (2)(1) For decedents whose death occurs on or after January 1, 2002, the terms "gross

taxable estate" "federal gross estate" or "net taxable estate" used in this chapter or chapter 23 of

this title has the same meaning as when used in a comparable context in the laws of the United

States, unless a different meaning is clearly required by the provisions of this chapter or chapter

23 of this title. Any reference in this chapter or chapter 23 of this title to the Internal Revenue

Code or other laws of the United States means the Internal Revenue Code of 1954, 26 U.S.C. § 1

LC003856 - Page 2 of 4

et seq., as they were in effect as of January 1, 2001, unless otherwise provided.

     (d) All values are as finally determined for federal estate tax purposes.

     (e) Property has a tax situs within the state of Rhode Island:

     (1) If it is real estate or tangible personal property and has actual situs within the state of

Rhode Island; or

     (2) If it is intangible personal property and the decedent was a resident.

     SECTION 2. This act shall take effect upon passage.

========

LC003856

========

LC003856 - Page 3 of 4

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - ESTATE AND TRANSFER TAXES - COMPUTATION

***

     This act would increase the estate tax exemption from eight-hundred fifty thousand

dollars ($850,000) to one million five hundred thousand dollars ($1,500,000) for deaths occurring

after January 1, 2015.

     This act would take effect upon passage.

========

LC003856

========

LC003856 - Page 4 of 4