2014 -- S 2320

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LC004387

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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 - ESTATE AND TRANSFER TAXES - LIABILITY AND

COMPUTATION

     

     Introduced By: Senators Jabour, Picard, Lombardi, Nesselbush, and Felag

     Date Introduced: February 12, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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

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

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

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

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

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

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

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

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

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

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however, that the tax shall be imposed only if the net taxable estate shall exceed six hundred

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seventy-five thousand dollars ($675,000). Any scheduled increase in the unified credit provided

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in 26 U.S.C. section 2010 in effect on January 1, 2001, or thereafter, shall not apply.

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      (3) For decedents whose death occurs on or after January 1, 2010 and prior to January 1,

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2015, a tax is imposed upon the transfer of the net estate of every resident or nonresident

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

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state death taxes allowed by 26 U.S.C. section 2011 as it was in effect as of January 1, 2001;

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provided, however, that the tax shall be imposed only if the net taxable estate shall exceed eight

 

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hundred and fifty thousand dollars ($850,000); provided, further, beginning on January 1, 2011

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and each January 1 thereafter until December 31, 2014, said amount shall be adjusted by the

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percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as

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published by the United States Department of Labor Statistics determined as of September 30 of

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the prior calendar year; said adjustment shall be compounded annually and shall be rounded up to

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the nearest five dollar ($5.00) increment. Any scheduled increase in the unified credit provided in

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

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

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the transfer of the net Rhode Island estate of every resident or nonresident decedent as a tax upon

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the right to transfer. The amount of tax is determined as follows:

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     (i) If the Rhode Island taxable estate is two million dollars ($2,000,000) or less, the tax is

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zero dollars ($0).

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     (ii) If the Rhode Island taxable estate is more than two million dollars ($2,000,000) but

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not more than five million dollars ($5,000,000), the tax is eight percent (8%) of the amount of the

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excess over two million dollars ($2,000,000).

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     (iii) If the Rhode Island taxable estate is more than five million dollars ($5,000,000) but

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not more than eight million dollars ($8,000,000), the tax is two hundred forty thousand dollars

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($240,000) plus ten percent (10%) of the amount of the excess over five million dollars

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($5,000,000).

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     (iv) If the Rhode Island taxable estate is more than eight million dollars ($8,000,000), the

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tax is five hundred forty thousand dollars ($540,000) plus twelve percent (12%) of the amount of

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the excess over eight million dollars ($8,000,000).

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

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

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

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

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

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

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      (c) (1) The terms "gross taxable estate", "federal gross estate" or "net taxable estate" used

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

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

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

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this title to the Internal Revenue Code or other laws of the United States means the Internal

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Revenue Code of 1954, 26 U.S.C. section 1 et seq.

 

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

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

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

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

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

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

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

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

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

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

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Rhode Island; or

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

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     SECTION 2. This act shall take effect upon passage, and shall apply to the estate of any

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decedent whose date of death is on or after January 1, 2015.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - ESTATE AND TRANSFER TAXES - LIABILITY AND

COMPUTATION

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     This act would amend the provisions of the Rhode Island estate tax laws to apply a

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graduated tax as follows: zero tax on estates $2,000,000 and below; for estates more than

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$2,000,000 to $5,000,000, 8% on the amount over $2,000,000; for estates more than $5,000,000

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to $8,000,000, 10% on the amount over $5,000,000 plus $240,000; and for estates more than

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$8,000,000, 12% on the amount over $8,000,000 plus $540,000.

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     This act would take effect upon passage, and would apply to the estate of any decedent

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whose date of death is on or after January 1, 2015.

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