2022 -- H 7866

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LC004966

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

____________

A N   A C T

RELATING TO TAXATION -- ESTATE AND TRANSFER TAXES--LIABILITY AND

COMPUTATION

     Introduced By: Representatives P Morgan, Roberts, Quattrocchi, and Nardone

     Date Introduced: March 04, 2022

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 44-22 of the General Laws entitled "Estate and Transfer Taxes -

Liability and Computation" is hereby repealed in its entirety.

CHAPTER 44-22

Estate and Transfer Taxes - Liability and Computation

     44-22-1. Tax on net estate of decedents -- Additional tax on postponed enjoyment --

Deductions -- Marital deduction.

     (a) 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 imposed at the rate of two percent (2%) upon

all amounts not in excess of twenty-five thousand dollars ($25,000); at the rate of three percent

(3%) upon all amounts in excess of twenty-five thousand dollars ($25,000) and not exceeding fifty

thousand dollars ($50,000); at the rate of four percent (4%) upon all amounts in excess of fifty

thousand dollars ($50,000) and not exceeding one hundred thousand dollars ($100,000); at the rate

of five percent (5%) upon all amounts in excess of one hundred thousand dollars ($100,000) and

not exceeding two hundred fifty thousand dollars ($250,000); at the rate of six percent (6%) upon

all amounts in excess of two hundred fifty thousand dollars ($250,000) and not exceeding five

hundred thousand dollars ($500,000); at the rate of seven percent (7%) upon all amounts in excess

of five hundred thousand dollars ($500,000) and not exceeding seven hundred fifty thousand dollars

($750,000); at the rate of eight percent (8%) upon all amounts in excess of seven hundred fifty

thousand dollars ($750,000) and not exceeding one million dollars ($1,000,000); at the rate of nine

percent (9%) upon all amounts in excess of one million dollars ($1,000,000). An additional tax is

imposed at the rate of two percent (2%) upon all or any part of each estate devised, bequeathed, or

conveyed in such manner that it becomes necessary to postpone the assessment of taxes imposed

by this chapter until the person entitled to the estate comes into beneficial enjoyment or possession

of the estate; and provided, further, that an additional tax is not assessed and collected, as provided

in §§ 44-23-9 -- 44-23-12, in case a settlement of taxes is effected under the provisions of § 44-23-

25.

     (b) In computing the value of the net estate in subsection (a) of this section, there is

deducted from the estate and exempted from the tax twenty-five thousand dollars ($25,000).

     (c) In computing the value of the net estate in subsection (a) of this section, there is

deducted from the estate and exempted from the tax all property or interests transferred to any

corporation, association, or institution located in Rhode Island which is exempt from taxation by

charter or under the laws of this state; or to any corporation, association, or institution located

outside of this state, which if located within this state, would be exempt from taxation; provided,

that the state of domicile of the corporation, association, or institution allows a reciprocal

exemption to any similar Rhode Island corporation, association, or institution; or to any person in

trust for the same or for use by the same for charitable purposes; or to any city or town in this state

for public purposes.

     (d) In computing the value of the net estate in subsection (a) of this section, there is

deducted from the estate and exempted from the tax United States civil and federal military service

annuity payments.

     (e) In computing the value of the net estate in subsection (a) of this section, there is

deducted from the estate and exempted from the estate tax a marital deduction, as defined in 26

U.S.C. § 2056, in the amount of one hundred seventy-five thousand dollars ($175,000), from

property or beneficial interests which pass or have passed from the decedent to the surviving

spouse, but only to the extent that the interests are included in determining the value of the gross

estate.

     (f)(1) In computing the value of the net estate in subsection (a) of this section, there is

deducted from the estate and exempted from the estate tax, an orphan's deduction, provided, that:

(i) the decedent does not have a surviving spouse, and (ii) the decedent is survived by a minor child

who, immediately after the death of the decedent, has no known parent, an amount equal to the

value of any interest in property which passes or has passed from the decedent to the child, but only

to the extent that the interest is included in determining the value of the gross estate. The aggregate

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amount of the deductions allowed under this section (computed without regard to this subsection)

with respect to interests in property passing to any minor child shall not exceed an amount equal to

five thousand dollars ($5,000) multiplied by the excess of twenty-one (21) over the age (in years)

which the child has attained on the date of the decedent's death.

     (2) For purposes of this subsection, any term used in the subsection has the same meaning

as when used in a comparable context in 26 U.S.C. § 2057 unless a different meaning is clearly

required.

     (g) Notwithstanding any other provisions of this chapter, the total estate tax payment on

account of the estate of a decedent whose death occurs on or after January 1, 1986, is that percentage

of the estate tax which would be payable under this chapter determined in accordance with the

following schedule:

     (1) Death prior to January 1, 1987. Ninety percent (90%) in the case of decedents whose

deaths occur on or after January 1, 1986, and prior to January 1, 1987;

     (2) Death prior to January 1, 1988. Eighty percent (80%) in the case of decedents whose

deaths occur on or after January 1, 1987, and prior to January 1, 1988;

     (3) Death prior to January 1, 1989. Sixty percent (60%) in the case of decedents whose

deaths occur on or after January 1, 1988, and prior to January 1, 1989;

     (4) Death prior to January 1, 1990. Forty percent (40%) in the case of decedents whose

deaths occur on or after January 1, 1989, and prior to January 1, 1990;

     (5) Death prior to June 1, 1990. Twenty percent (20%) in the case of decedents whose

deaths occur on or after January 1, 1990, and prior to June 1, 1990;

     (6) Death prior to January 1, 1992. Forty percent (40%) in the case of decedents whose

deaths occur on or after June 1, 1990, and prior to January 1, 1992.

     (7) Death on or after January 1, 1992. The estate tax payable on or account of the estate of

a decedent whose death occurs on or after January 1, 1992, is determined in accordance with § 44-

22-1.1.

     (h) The estate tax payable under this section shall in no event be less than the estate tax due

under § 44-22-1.1, computed without regard to the date of death.

     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,

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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, and prior to 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 eight hundred and fifty

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

thereafter until January 1, 2015, 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 a Rhode Island credit shall

be allowed against any tax so determined in the amount of sixty-four thousand four hundred

($64,400). 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; provided, further, beginning on January 1, 2016, and

each January 1 thereafter, said Rhode Island credit amount under this section 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.

     (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,

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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)(1) 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) 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 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.

     44-22-2. Exemption -- Missing persons in military action.

     An estate of a serviceman or servicewoman who has been classified by the armed forces

of the United States as missing in action is exempt from provisions of this chapter pertaining to

taxation.

     44-22-3 -- 44-22-7. Repealed.

     44-22-8 -- 44-22-11. Repealed.

     44-22-12 -- 44-22-20. Repealed.

     44-22-21. Repealed.

     44-22-22 -- 44-22-24. Repealed.

     44-22-25. Repealed.

     44-22-26. [Renumbered.]

     SECTION 2. Chapter 44-23 of the General Laws entitled "Estate and Transfer Taxes -

Enforcement and Collection" is hereby repealed in its entirety.

CHAPTER 44-23

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Estate and Transfer Taxes - Enforcement and Collection

     44-23-1. Statements filed by executors, administrators and heirs-at-law.

     (a) Every executor, administrator, and heir-at-law, within nine (9) months after the death

of the decedent, shall file with the tax administrator a statement under oath showing the full and

fair cash value of the estate, the amounts paid out from the estate for claims, expenses, charges, and

fees, and the statement shall also provide the names and addresses of all persons entitled to take

any share or interest of the estate as legatees or distributees of the estate.

     (b) A fee of fifty dollars ($50.00) is paid when filing any statement required by this section.

All fees received under this section are allocated to the tax administrator for enforcement and

collection of taxes.

     44-23-2. Statements filed by trustees.

     Whenever any person during his or her life appoints a trustee, naming that person or others

as beneficiaries, and providing for the administration of the trust after his or her death, or providing

for a termination of the trust and a distribution of the trust estate or any part of the trust estate at his

or her death, any person acting as the trustee or any trustee of property subject to a power of

appointment, shall, within thirty (30) days after the death of the creator of the trust, or within thirty

(30) days after the death of the donee of the power file with the tax administrator a sworn statement

showing:

     (1) The trust agreement, if any;

     (2) The full and fair cash value of the trust estate;

     (3) The extent of the duration of the trust;

     (4) The manner provided for its termination;

     (5) The names and addresses of the beneficiaries of the trust; and

     (6) Any other information relating to the trust, which the tax administrator may deem

necessary for the proper assessment of the tax on the estate.

     44-23-3. Extension of time for filing of statement.

     The tax administrator has authority to grant extensions of time corresponding to the

approved extension granted by the Internal Revenue Service for the filing of federal form 706

within which any statement is required to be filed upon written application of the executor,

administrator, heir-at-law, or trustee desiring an extension, and it is the duty of the executor,

administrator, heir-at-law, or trustee, to file the statement within the extension of time granted.

     44-23-4. Declarations under penalties of perjury.

     The oath or affirmation required by the provisions of this chapter as to any report or written

statement is not required if the report or statement to be sworn to contains or is verified by a written

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declaration that it is made under the penalties of perjury; and whoever signs or issues any report or

statement containing or verified by a written declaration is, if the report or statement is willfully

false, guilty of perjury.

     44-23-5. Appraisal of estate.

     (a) If any statement filed in accordance with the provisions of this chapter is considered to

be an erroneous or incomplete statement of the property, real, tangible personal, intangible

personal, or of any part of the property, of the decedent, the tax administrator shall give notice to

the executor, administrator, heir-at-law, beneficiary, or trustee filing the statement, to appear before

the tax administrator for the purpose of examination of and concerning the statement, and

concerning all matters appertaining to the estate and the value of the estate of the decedent; and if

the executor, administrator, heir-at-law, beneficiary, or trustee fails to appear after due notice, or if

after appearance and examination of the executor, administrator, heir-at-law, beneficiary, or trustee

the tax administrator still considers the statement to be an erroneous or incomplete statement, or if

the executor, administrator, heir-at-law, beneficiary, or trustee refuses or neglects to answer the

questions propounded in reference to the statement, the tax administrator may appraise the estate.

The tax administrator shall give notice by mail to the executor, administrator, heir-at-law,

beneficiary, or trustee and to all persons known to have a claim or interest in the estate or property

to be appraised, of the time and place of the appraisal, and the tax administrator or his or her

authorized agent shall at that time and place appraise the estate or property at its full and fair cash

value as prescribed in this section; and for that purpose the tax administrator is authorized to issue

subpoenas and to compel the attendance of witnesses and to take the evidence of the witnesses

under oath if necessary, concerning the estate or property and the value of the estate, and the

witnesses shall receive the same fees as those now paid to witnesses subpoenaed to attend the

superior court. From the appraisal and other proof relating to the estate or property, the tax

administrator determines the full and fair cash value of the estate or property upon which all taxes

imposed by chapter 22 of this title are computed and the amount of taxes to which it is liable. If no

appraisal is made as provided in this section, the tax administrator may determine the value of the

property upon which all the taxes are computed and the amount of taxes to which it is liable.

     (b) Notwithstanding the provisions of §  44-23-5(a), all farmland, as such term is defined

in § 44-27-2, included as part of an estate for purposes of this section and utilized by the executor,

administrator, heir-at-law, beneficiary or trustee as farmland, shall be appraised at its use value

according to applicable federal and state law and not at its full and fair cash value.

     44-23-6. Notice by probate clerk of grant of letters on estate.

     Every probate clerk shall, within thirty (30) days after the granting of letters testamentary

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or letters of administration upon any estate, notify the tax administrator of the name of the decedent,

the name and address of the executor, administrator, or trustee appointed, and the amount of the

bond required by the court; and shall also furnish upon request certified copies of documents and

any further information from the records and files of his or her office in regard to the estate that the

tax administrator may from time to time require.

     44-23-7. Fees of probate clerk.

     The probate clerk furnishing the information required by § 44-23-6 is paid out of any

money appropriated for expenses of tax administration a fee of fifteen cents ($.15) for every

hundred words of copy, but the tax administrator may in his or her discretion make copies of the

documents or of any other records of the probate court. If the copies are found by the probate clerk

to be correct, the clerk shall certify to their correctness and be paid a fee of twenty-five cents ($.25)

for each certification. All fees paid to a probate clerk under this section are disposed of in the same

manner as is provided for the disposition of other probate fees under the provisions of chapter 22

of title 33.

     44-23-8. Estates where no will has been offered or letters granted.

     If upon the decease of a person leaving an estate liable to a tax under the provisions of

chapter 22 of this title, a will disposing of the estate is not offered for probate or an application for

administration is not made within three (3) months after the decease, the tax administrator may in

his or her discretion, with the approval of the attorney general, agree with the persons interested in

the estate as to the value of the estate and the amount of the tax to be assessed on the estate, or the

tax administrator may apply to the probate court for the appointment of an administrator of the

estate, and the probate court upon the application shall appoint an administrator of the estate.

     44-23-9. Assessment and notice of estate tax -- Collection powers -- Lien.

     (a) The tax imposed by § 44-22-1.1 shall be assessed upon the full and fair cash value of

the net estate determined by the tax administrator as provided in this chapter. Notice of the amount

of the tax shall be mailed to the executor, administrator, or trustee, but failure to receive the notice

does not excuse the nonpayment of or invalidate the tax. The tax administrator shall receive and

collect the assessed taxes in the same manner and with the same powers as are prescribed for and

given to the collectors of taxes by chapters 7 -- 9 of this title. The tax shall be due and payable as

provided in § 44-23-16, shall be paid to the tax administrator, and shall be and remain a lien upon

the estate until it is paid. All executors, administrators, and trustees are personally liable for the tax

until it is paid.

     (b) Notwithstanding the provisions of subsection (a) of this section, under no circumstances

shall the tax administrator issue any notice of deficiency determination for the amount of the estate

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tax due more than ten (10) years after the return was filed or should have been filed, nor shall the

tax administrator commence any collection action for any estate tax due and payable unless the

collection action is commenced within ten (10) years after the date a notice of deficiency

determination became a final collectible assessment. "Collection action" refers to any activity

undertaken by the division of taxation to collect on any state tax liabilities that are final, due, and

payable under Rhode Island law. "Collection action" may include, but is not limited to, any civil

action involving a liability owed under chapters 22 and 23 of title 44.

     (c) The ten-year (10) limitation shall not apply to the renewal or continuation of the state's

attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation

periods set forth in this section.

     44-23-9.1. Hearing by tax administrator on application.

     An executor, administrator, trustee, legatee or other person aggrieved by a final assessment

of the tax administrator as to the amount of the tax imposed by chapter 22 of this title on any estate

or any part of the estate shall notify the tax administrator, in writing, within thirty (30) days from

the date of mailing by the tax administrator of the notice of the final assessment or date tax is due,

whichever is later, and shall request a hearing relative to the tax; and the tax administrator shall, as

soon as practicable, fix a time and place for the hearing and shall, after the hearing, determine the

correct amount of the tax, interest, and penalties.

     44-23-10. Deposit with tax administrator to cover taxes.

     An executor, administrator, or trustee may deposit with the tax administrator a sum of

money sufficient in the opinion of the tax administrator to pay all taxes, which may become due

under the provisions of chapter 22 of this title. When the taxes have been determined, the general

treasurer shall, upon certification by the tax administrator and with the approval of the controller,

repay to the executor, administrator, or trustee the difference between the determined taxes and the

amount deposited, or the tax administrator shall collect any deficiency in the tax. The lien upon the

estate imposed under § 44-23-9 is discharged by the acceptance of the deposit.

     44-23-11. Tentative assessment.

     At the request of an executor, administrator, or trustee the tax administrator may make a

tentative assessment of taxes under the provisions of §§ 44-22-1 and 44-22-1.1, whichever section

is in effect at the time, to prevent interest charges on the amount of the tentative assessment, and

shall accept payment of that sum, and when the taxes have been finally determined, the general

treasurer shall, upon certification by the tax administrator and with the approval of the controller,

repay to the executor, administrator, or trustee the difference between the taxes so determined and

the amount of the tentative assessment, or the tax administrator shall collect any deficiency in the

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taxes together with interest on the deficiency, if any is due.

     44-23-12. Recording of lien against real estate -- Discharge.

     Whenever a statement is filed with the tax administrator showing the ownership of real

property, the tax administrator shall notify the recorder of deeds or the clerk of the city or town, as

the case may be, in which the real property is located, and the recorder of deeds shall note in the

land records of his or her office the decedent's name, and the fact that all real property belonging

to the decedent is impressed with a lien under the provisions of this chapter. Upon the discharge of

the lien, the tax administrator shall send the recorder of deeds a further notice showing the discharge

and the manner of the discharge. The recorder of deeds is paid out of any money appropriated for

expenses of tax administration, a fee of one dollar and fifty cents ($1.50) for a completed entry.

     44-23-13. Assessment and notice of transfer tax -- Collection powers -- Lien on

property.

     (a) All taxes imposed by § 44-22-1.1 shall be assessed by the tax administrator upon the

full and fair cash value of the property transferred at the rates described in chapter 22 of this title

and only upon the amount in excess of the exemptions or deductions specified in that chapter, to

be paid to the tax administrator, and all executors, administrators, or trustees are personally liable

for any and all taxes until they are paid. Notice of the amount of the taxes shall be mailed to the

executor, administrator or trustee liable for the taxes, and upon request made to the tax

administrator to any other person by whom the taxes are payable, but failure to receive the notice

does not excuse the nonpayment of or invalidate the taxes. Unless appeal is taken from the

assessment, as provided in this chapter, the amount of assessed taxes is final.

     (b) The tax administrator shall receive and collect the assessed taxes in the manner and

with the powers prescribed and given to the collectors of taxes by chapters 7 -- 9 of this title.

Payment of the certified amount is a discharge of the tax.

     (c) The taxes are and remain a lien upon the property transferred, and upon all property

acquired by the executor, administrator or trustee in substitution for the property while that property

remains in his or her hands until the taxes are paid, but the lien does not affect any tangible personal

property or intangible personal property after it has passed to a bona fide purchaser for value.

Nothing contained in this section gives the owner of any securities specified in § 44-23-34 the right

to have the securities transferred to the owner by the corporation, association, company or trust

issuing the securities, until the permit required by § 44-23-34 has been filed as provided in § 44-

23-34.

     44-23-14. Discharge of lien on real estate -- Liability of heir or devisee.

     The lien imposed under § 44-23-13 upon any real estate or separate parcel of real estate

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may be discharged by the payment of all taxes due and to become due upon the real estate or

separate parcel, or by an order of the tax administrator transferring the lien to other real estate

owned by the person to whom the real estate or separate parcel of the real estate passes, or by the

acceptance of the surety for the payment of taxes which the tax administrator may approve. The

heir, devisee, or other donee is personally liable for the tax on the real estate, as well as the executor,

administrator, or trustee; and if the executor, administrator, or trustee pays the tax he or she shall,

unless the tax is made an expense of administration by the will or other instrument of the decedent,

have the right to recover the tax from the heir, devisee, or other donee of the real estate.

     44-23-15. Taxes as debt to state.

     The taxes imposed under the provisions of chapter 22 of this title, together with all

penalties, charges and interest shall also become, from the time the taxes are due and payable, a

debt to the state of Rhode Island from the person or corporation liable for the payment of the taxes.

     44-23-16. Time taxes due -- Interest and additions to tax on delinquent payments.

     All taxes imposed by chapter 22 of this title, unless provided, are due and payable nine (9)

months after the date of death of the decedent. If the taxes are not paid within nine (9) months from

the date of death, interest shall be charged and collected at the annual rate provided by § 44-1-7

from the time the tax is due, determined without regard to any extension of time for payment. In

addition, if the taxes are not paid when due (determined with regard to any extension of time for

payment), there is added to the amount of tax due five-tenths percent (0.5%) of the tax per month

to a maximum of twenty-five percent (25%) unless it is shown that the failure to pay is due to

reasonable cause and not due to willful neglect.

     44-23-16.1. Interest on overpayments.

     If it is determined that any overpayment has been made with respect to taxes imposed by

chapter 22 of this title, the amount of the overpayment bears interest at the annual rate established

by § 44-1-7.1. The acceptance of the check shall be without prejudice to any right of the taxpayer

to claim any additional overpayment and interest.

     44-23-17. Suspension of tax payment pending claim against estate.

     Whenever it is necessary in the settlement of any estate to retain property or funds for the

purpose of paying the claim of any creditor, the amount or validity of which is contested and is not

determined, the payment of the whole or a proportionate part of the tax may be suspended, by and

with the approval of the tax administrator, to await the disposition of the claim.

     44-23-18. Extension of time for payment of additional estate tax.

     Whenever the tax administrator finds that the payment of the tax imposed by § 44-22-1.1

causes undue hardship, the tax administrator may, in his or her discretion, with the approval of the

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attorney general and by agreement with the executor, administrator, or trustee, extend the time for

payment of the whole or any part of the tax for a period not to exceed four (4) years from the date

the tax is due and payable, and may provide for payment in installments. In that case the amount in

respect of which the extension is granted shall be paid with or without interest, on or before the

date of the expiration of the period of the extension.

     44-23-19 -- 44-23-22. Repealed.

     44-23-23. Sale of property to pay tax.

     Every executor, administrator, or trustee has full power to sell, upon application to the

probate court, so much of the property of the decedent as will enable him or her to pay any tax

imposed by chapter 22 of this title in the manner he or she might be entitled by law to do for the

payment of the debts of the testator or intestate.

     44-23-24. Refusal to furnish information or obey subpoena.

     If any executor, administrator, heir-at-law, or trustee, probate clerk or other person neglects

or refuses to file any statement as required by the provisions of this chapter, or to furnish any other

information required by this chapter, or neglects or refuses to comply with any subpoena issued

under the authority of § 44-23-5, the tax administrator may apply to the sixth (6th) division of the

district court, upon proof by affidavit of the neglect or refusal, for an order returnable in not less

than two (2) nor more than five (5) days, directing the person charged in the affidavit with the

neglect or refusal to show cause before the judge who made the order, or any other judge of the

court, why the person should not be adjudged in contempt. Upon the return of the order, the judge

before whom the matter is brought for a hearing shall examine the person under oath, and the person

shall be given an opportunity to be heard. If the judge determines that the person has without

reasonable cause been guilty of the neglect or refusal complained of, the judge may immediately

commit the offender to the adult correctional institutions, to remain there until the offender submits

to file the statement required or to furnish the information required, or to obey the subpoena, as the

case may be, or is discharged according to law, or the judge may make any other order in the

premises that the circumstances of the case may seem to the judge to require, and may from time

to time alter, amend or suspend any order entered by the judge under this section. Notwithstanding

anything contained in this section or in § 44-23-5, whenever any executor, administrator, heir-at-

law, trustee, or other person liable for any tax imposed under the provisions of chapter 22 of this

title, refuses or neglects to furnish any information which in the opinion of the tax administrator is

necessary for the proper computation of the taxes payable under that chapter, after having been

requested so to do, the tax administrator may in his or her discretion assess and collect the taxes at

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the highest rate at which they could in any event be computed. A party aggrieved by an order of

the court may appeal the order to the supreme court in accordance with the procedures contained

in the rules of appellate procedure of the supreme court.

     44-23-25. Settlement of taxes due.

     The tax administrator, with the approval of the attorney general, may effect a settlement of

the amount of any taxes imposed by chapter 22 of this title as they deem to be for the best interests

of the state, and the payment of amount agreed upon is a full satisfaction of the taxes; provided,

that the settlement and assessment are made only with the consent of the executor of the will or the

trustee under the other instrument, or, in the case of a transfer by will of real estate, of the persons

entitled to the real estate, or, if the real estate passes to a trustee for those persons, then of the

trustee. The settlement, in accordance with the provisions of this section, of a tax upon any transfer

of property subject to a power of appointment, if the agreement of settlement provides, precludes

the assessment under this chapter or under any act hereafter passed of any further tax, with respect

to the right to transfer, upon or with respect to the transfer of any property at the time subject to the

power, as a part of the estate of the donee of the power. The agreement is binding upon all persons

taking property subject to the tax, except for fraud or manifest error; and executors and trustees are

expressly authorized to enter into an agreement unless a contrary intention appears in the instrument

defining their powers.

     44-23-26. Adjustment of clerical or palpable errors.

     Whenever a clerical or palpable error or mistake has been made in any statement filed with

the tax administrator under the provisions of this chapter concerning any matter of information, or

in entering amounts or figures, the tax administrator may assess an additional tax and receive and

collect the tax. In the event that the error or mistake has resulted in an over assessment, and in case

the tax has already been paid to the tax administrator the general treasurer shall, upon certification

by the tax administrator and with the approval of the controller, refund any overpayment to the

executor, administrator, heir-at-law, or trustee, or to the person by whom the tax was paid, without

any further act or resolution making appropriation for the refund; provided, that not more than four

(4) years have elapsed from the payment of the tax.

     44-23-27. Conflict of laws as to domicile -- Definition of terms.

     When used in §§ 44-23-27 -- 44-23-32 the following terms have the following meanings:

     (1) "Death tax" means any tax levied by a state on account of the transfer or shifting of

economic benefits in property at death, or in contemplation of death, or intended to take effect in

possession or enjoyment at or after death, whether denominated an "inheritance tax," "transfer tax,"

"succession tax," "estate tax," "death duty," "death dues," or otherwise;

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     (2) "Executor" means any executor of the will or administrator of the estate of a decedent,

except an ancillary administrator;

     (3) "Interested person" means any person who may be entitled to receive or who has

received any property or interest which may be required to be considered in computing the death

tax of any state involved;

     (4) "Taxing official" means the tax administrator in this state, and in any other reciprocal

state the officer or body designated in the statute of the state substantially similar to §§ 44-23-27 -

- 44-23-32.

     44-23-28. Election to invoke remedy as to conflict of laws.

     (a) In any case in which this state and one or more other states each claim that it was the

domicile of a decedent at the time of his or her death, and no judicial determination of domicile for

death tax purposes has been made in any of those states, any executor or the taxing official of any

of those states, may elect to invoke the provisions of §§ 44-23-27 -- 44-23-32. The election is

evidenced by sending a notice by registered or certified mail, receipt requested, to the taxing

officials of each of those states and to each executor, ancillary administrator and interested person.

     (b) Any executor may reject the election by sending a notice by registered or certified mail,

receipt requested, to the taxing officials involved and to all other executors within forty (40) days

after the receipt of the notice of election. If the election is rejected, no further proceedings shall be

had under §§ 44-23-27 -- 44-23-32. If the election is not rejected, the dispute as to the death taxes

shall be determined solely as provided in this chapter, and no other proceedings to determine or

assess the death taxes shall be instituted in the courts of this state or otherwise.

     44-23-29. Agreement as to amount due when domicile is in question -- Adjustment for

credits against federal tax.

     In any case in which an election is made as provided in § 44-23-28 and not rejected, the

tax administrator may enter into a written agreement with the other taxing officials involved and

with the executors, to accept a certain sum in full payment of any death tax, together with interest

and penalties, that may be due this state; provided, that the agreement also fixes the amount to be

paid the other state or states. If an agreement cannot be reached and the arbitration proceeding

specified in § 44-23-30 is commenced, and thereafter an agreement is arrived at, a written

agreement may be entered into at any time before the proceeding is concluded notwithstanding the

commencement of the proceeding. Upon the filing of the agreement or duplicate of it with the

authority which would have jurisdiction to assess the death tax of this state if the decedent died

domiciled in this state, an assessment shall be made as provided in the agreement. The assessment,

except as hereinafter provided, shall finally and conclusively fix and determine the amount of death

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tax due this state. In the event that the aggregate amount payable under the agreement to the states

involved is less than the maximum credit allowable to the estate against the United States estate tax

imposed with respect to the tax, the executor shall also immediately pay to the taxing administrator

that percentage of the difference between the aggregate amount and the amount of the credit, which

the amount payable to the taxing administrator under the agreement bears to the aggregate amount.

     44-23-30. Interstate arbitration as to domicile.

     If in any case it appears that an agreement cannot be reached as provided in § 44-23-29, or

if one year has elapsed from the date of the election without an agreement having been reached, the

domicile of the decedent at the time of his or her death shall be determined solely for death tax

purposes as follows:

     (1) Where only this state and one other state are involved, the taxing administrator and the

taxing official of the other state shall each appoint a member of a board of arbitration, and the

appointed members shall select the third member of the board. If this state and more than one other

state are involved, the taxing officials of the states shall agree upon the authorities charged with the

duty of administering death tax laws in three (3) states not involved, each of which authorities shall

appoint a member of the board. The members of the board shall elect one of their number as

chairperson.

     (2) The board shall hold hearings at those places as are deemed necessary, upon reasonable

notice to the executors, ancillary administrators, all other interested persons, and the taxing officials

of the states involved, all of whom are entitled to be heard.

     (3) The board has the power to administer oaths, take testimony, subpoena and require the

attendance of witnesses and the production of books, papers and documents and issue commissions

to take testimony. Subpoenas may be issued by any member of the board. Failure to obey a

subpoena may be punished by a judge or justice of any court of record in the same manner as if the

subpoena had been issued by the judge or justice or by the court in which the judge or justice

functions.

     (4) The board shall apply, whenever practicable, the rules of evidence which prevail in

federal courts under the federal rules of civil procedure at the time of hearing.

     (5) The board shall, by majority vote, determine the domicile of the decedent at the time of

his or her death. The determination is final and conclusive, and binds this state and all its judicial

and administrative officials on all questions concerning the domicile of the decedent for death tax

purposes.

     (6) The reasonable compensation and expenses of the members of the board and employees

of the board shall be agreed upon among the members, the taxing officials of the states involved,

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and the executors. In the event an agreement cannot be reached, the compensation and expenses

shall be determined by the appropriate probate court of the state determined to be the domicile. The

amount is borne by the estate and is deemed an administration expense.

     (7) The determination of the board and the record of its proceedings shall be filed with the

authority having jurisdiction to assess the death tax in the state determined to be the domicile of

the decedent and with the authorities which would have had jurisdiction to assess the death tax in

each of the other states involved if the decedent had been found to be domiciled in that state.

     44-23-31. Interest on tax pending arbitration of domicile.

     In any case where it is determined by the board of arbitration referred to in § 44-23-30 that

the decedent died domiciled in this state, penalties and interest for nonpayment of the tax, between

the date of the election and the final determination of the board, shall not exceed, in the aggregate,

four percent (4%) of the amount of the taxes per annum.

     44-23-32. Reciprocal laws required.

     The provisions of §§ 44-23-27 -- 44-23-31 apply only to cases in which each of the states

involved has in effect a law substantially similar to those sections.

     44-23-33. Appeals.

     Appeals from administrative orders or decisions made pursuant to any provisions of this

chapter are to the sixth (6th) division district court pursuant to chapter 8 of title 8. The taxpayer's

right to appeal under this section is expressly made conditional upon prepayment of all taxes,

interest, and penalties unless the taxpayer moves for and is granted an exemption from the

prepayment requirements pursuant to § 8-8-26.

     44-23-34. Permit required for transfer of securities of resident decedent.

     No banking association organized under the laws of the United States and located within

this state, no corporation incorporated within this state, and no incorporated association or joint

stock company or business trust having certificates representing shares of stock and carrying on

business in this state, shall record a transfer of its stock made by any executor, administrator, or

trustee of a resident decedent or issue a new certificate for any share of its stock at the instance of

the executor, administrator, or trustee, until a permit authorizing the transfer is issued by the tax

administrator and filed with the corporation, association, company or trust. Any corporation,

association, company, or trust making a transfer before a permit authorizing the transfer is issued

is liable for the amount of any tax which may be assessed on account of the bequest or gift of the

stock, bond or other evidence of indebtedness, together with its interest, to be collected in an action

brought in the name of the tax administrator.

     44-23-35. Statement required as to delivery of decedent's property to other than

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administrator.

     No person having in possession or under control of property forming a part of the estate of

a resident decedent, as provided in this chapter, may deliver or transfer the property to any person

other than the executor, administrator, or trustee of the decedent unless the person making delivery

or transfer of the property immediately furnishes the tax administrator with a statement under oath

describing the property delivered or transferred together with the name of the person to whom the

property is delivered or transferred; provided, that any insurance company engaging in the business

of writing contracts of insurance in the state notifies the tax administrator of the amount of any

payment or payments made, or to be made to any person or persons under any insurance contract,

as a result of the death of a Rhode Island resident, whenever the total amount of payment or

payments made or to be made to the person or persons exceeds fifty thousand dollars ($50,000);

and provided, that banks and other institutions having deposits standing in the joint names of two

(2) or more persons, or standing in the joint names of two (2) or more persons and payable to either

or the survivor or survivors, are not required to furnish the statement with respect to deposits of

one thousand dollars ($1,000) or less. In the case of deposits of over one thousand dollars ($1,000),

the bank or other institution, having knowledge of the decease of one of the persons in whose names

the deposit stands, or upon request of the tax administrator, shall, in lieu of the statement furnish a

certificate showing the amount of each deposit together with the names of the persons in whose

names the deposit stands. Any person who makes delivery or transfer without furnishing a

statement is liable for the amount of any tax which may be assessed on account of the transfer of

the property, together with its interest, to be collected in an action brought in the name of the tax

administrator.

     44-23-36. Payment of tax as prerequisite for allowance of final account.

     The final account of an executor, administrator, or trustee shall not be allowed by the court

having jurisdiction of the estate unless the account shows, and the court finds, that all taxes imposed

under the provisions of chapter 22 of this title upon any property or interest in property belonging

to the estate to be settled by the account and then payable have been paid, that the payment of the

taxes has been extended, or that the property or any interest in property is not liable for any tax

imposed under chapter 22 of this title. The receipt of the tax administrator for the amount of the tax

is conclusive as to the payment of the tax to the extent of the receipt, and the certification of the tax

administrator that an estate, property, or interest is not liable for any tax imposed by chapter 22 of

this title is conclusive of that fact.

     44-23-37. Applicability of enforcement provisions.

     Sections 44-23-1 -- 44-23-8, 44-23-17, 44-23-23, 44-23-24, and 44-23-33 -- 44-23-36

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apply to the tax imposed under the provisions of § 44-22-1 or 44-22-1.1, whichever is in effect at

the time.

     44-23-38. Termination of lien.

     Any other provision of this or chapter 22 of this title to the contrary notwithstanding, a lien

created by those chapters ceases to be a lien upon or enforceable against real estate upon the

expiration of a period of ten (10) years from and after the death of the person whose act, failure to

act, or death gave rise to the lien, regardless of the date of death.

     44-23-39. Proof of payment of domiciliary tax by administrator of nonresident.

     At any time before the expiration of eighteen (18) months after the appointment in any

probate court of this state of an executor of the will, or administrator of the estate of, any

nonresident decedent, the executor or administrator shall file with the probate court proof that all

death taxes, together with interest, or penalties attached to or in connection with the death taxes,

which are due to the state of domicile of the decedent, or to any of its political subdivisions, have

been paid or secured, or that no taxes, interest, or penalties are due, as the case may be; provided,

that the filing of the proof is not required if it appears that letters testamentary have been issued in

the state of domicile. The proof may be in the form of a certificate issued by the official or body

charged with the administration of the death tax laws of the state of domicile.

     44-23-40. Information furnished to foreign tax officials.

     If the proof is not filed with a probate court in this state as provided by § 44-23-39, the

clerk of the probate court shall immediately notify by mail the official or body of the state of

domicile charged with the administration of the death tax laws of that state with respect to the

estate, and shall present in the notification, so far as is known to the clerk: (1) the name, date of

death and last domicile of the decedent; (2) the name and address of the executor or administrator;

(3) a summary of the values of the real estate, tangible personalty, and intangible personalty,

wherever situated, belonging to the decedent at the time of his or her death; and (4) the fact that the

executor or administrator has not previously filed the proof required by § 44-23-39. The clerk shall

also attach to the notification a copy of the will of the decedent, if the decedent died testate, or if

the decedent died intestate, a list of his or her heirs and next of kin, so far as is known to the clerk.

For each copy of the notice, the probate clerk furnishing the information shall be paid out of any

money appropriated for expenses of tax administration the fees provided in § 44-23-7.

     44-23-41. Accounting on petition by foreign tax official.

     Within sixty (60) days after the mailing of the notice, the official or body charged with the

administration of the death tax laws of the state of domicile may file with the probate court in this

state a petition for an accounting in the estate. The official or body of the state of domicile is, for

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the purposes of this chapter, a party in interest for the purpose of petitioning the probate court for

the accounting. If the petition is filed within the period of sixty (60) days, the probate court shall

decree the accounting, and upon the accounting being filed and approved shall decree the remission

to the fiduciary appointed by the probate court of the state of domicile of the balance of the

intangible personal property after the payment of creditors and expenses of administration in this

state.

     44-23-42. Noncompliance by administrator of nonresident -- "State" defined.

     Failure to comply with any of the provisions of §§ 44-23-39 -- 44-23-41 bars any executor

or administrator from the right to a final accounting or discharge in any probate court in this state.

The word "state" for the purposes of §§ 44-23-39 -- 44-23-41 includes any territory of the United

States, the District of Columbia, and any foreign country.

     44-23-43. Reciprocal laws required -- Liberal construction -- Remission of intangible

property.

     The provisions of §§ 44-23-39 -- 44-23-42 apply to the estate of a nonresident decedent

whenever the laws of the state of domicile of the decedents contain a provision, of any nature or

however expressed, where this state is given reasonable assurance of the collection of its death

taxes, interest and penalties, from the estates of decedents dying domiciled in this state but whose

estates are being administered by a court having probate jurisdiction in the other state; or whenever

the state of domicile does not grant letters testamentary or of administration in nonresident estates

until after the letters have been issued by the state of domicile. The provisions are liberally

construed in order to ensure that the state of domicile of any decedent receives any death taxes,

which may be due it, together with interest and penalties. Nothing in those sections shall be

construed to prevent a probate court from ordering the remission of any intangible personal

property belonging to a nonresident decedent whose estate is being administered in this state, and

the probate court is authorized to order the remission whenever good cause is shown.

     44-23-44. Exercise of statutory power.

     Whenever in this chapter or chapter 22 of this title any reference is made to any power or

duty of the tax administrator, the reference shall be construed to mean that the power or duty is

exercised by the tax administrator or by his or her authorized agent, under the supervision and

direction of the director of revenue. Whenever in this chapter or chapter 22 of this title any reference

is made to any power or duty of the controller, the reference shall be construed to mean that the

power or duty is exercised by the controller or by his or her authorized agent, under the supervision

and direction of the director of revenue.

     44-23-45. Liberal construction -- Incidental powers.

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     The provisions of this chapter and chapter 22 of this title shall be interpreted and construed

liberally in order to accomplish the purpose of those chapters, and the tax administrator has, in

addition to the powers in those chapters specified, mentioned and indicated, all additional implied

and incidental powers which may be proper and necessary to effect and carry out, perform and

execute all the powers specified, mentioned and indicated in those chapters.

     44-23-46. Severability.

     If any clause, sentence, paragraph, section, or part of this chapter and chapter 22 of this

title is for any reason adjudged by any court of competent jurisdiction to be invalid, that judgment

does not affect, impair or invalidate any other portion of those chapters which can be given

reasonable effect without the part adjudged invalid.

     SECTION 3. 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 -- ESTATE AND TRANSFER TAXES--LIABILITY AND

COMPUTATION

***

     This act would eliminate the estate tax in Rhode Island.

     This act would take effect upon passage.

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