2013 -- S 0023

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

     Introduced By: Senators Bates, Walaska, Ottiano, Cote, and Hodgson

     Date Introduced: January 16, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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

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hereby amended by adding thereto the following section:

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     44-30-2.7.1. Capital gains rates for new investments in Rhode Island businesses. –

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All capital assets purchased after January 1, 2013, and sold after January 1, 2016, shall be deemed

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to have a holding period beginning from the date of such purchase. For tax years beginning in

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2016, a taxpayer shall be exempt from one hundred percent (100%) of the gains from the sale of a

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capital asset provided:

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     (1) The capital asset represents an ownership interest in an entity incorporated and having

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its headquarters located in the state of Rhode Island;

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     (2) The taxpayer did not have a previous ownership interest in the entity;

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     (3) The capital asset was in the minimum amount of ten thousand dollars ($10,000) and

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represented newly issued capital of the Rhode Island entity; and

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     (4) The capital asset was owned by the taxpayer for at least three (3) uninterrupted years

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prior to the sale or transaction that created the capital gain.

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     (b) The tax administrator is authorized to promulgate rules and regulations deemed

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necessary for the proper administration and enforcement of this section.

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     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 provide for a capital gains tax exemption with respect to investments

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made in Rhode Island businesses, provided certain conditions are met.

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     This act would take effect upon passage.

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