2013 -- S 0393

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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 Pearson, Picard, Satchell, Kettle, and Pichardo

     Date Introduced: February 26, 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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     44-30-28. Stay invested in RI tax credit. – (a) This section shall be known and may be

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

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

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

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

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

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

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

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follows:

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

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

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

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

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

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holder, in any single tax year.

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

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

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

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

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section.

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

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

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

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

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to implement the provisions of this section.

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

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

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

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

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ruling for the purposes of the guaranteed student loan program.

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

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

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

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

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     This act would take effect upon passage.

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