Chapter 019
2010 -- H 8196 SUBSTITUTE A
Enacted 06/09/10
A N A C T
RELATING TO
TAXATION - PERSONAL INCOME TAX
Introduced By: Representatives Melo, Costantino, Giannini, Carter, and Almeida
Date Introduced: May 27, 2010
It is enacted by the
General Assembly as follows:
SECTION
1. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled
"Personal
Income Tax" is hereby
amended to read as follows:
44-30-2.6.
income" means federal taxable income as
determined under the Internal Revenue Code, 26 U.S.C.
§ 1 et seq., not including the increase in the basic
standard deduction amount for married couples
filing joint returns as provided in the Jobs and
Growth Tax Relief Reconciliation Act of 2003 and
the Economic Growth and Tax Relief Reconciliation Act
of 2001 (EGTRRA), and as modified by
the modifications in § 44-30-12.
(b)
Notwithstanding the provisions of §§ 44-30-1 and 44-30-2, for tax years
beginning
on or after January 1, 2001, a
Island taxable income of residents and nonresidents,
including estates and trusts, at the rate of
twenty-five and one-half percent (25.5%) for tax year
2001, and twenty-five percent (25%) for
tax year 2002 and thereafter of the federal income tax
rates, including capital gains rates and any
other special rates for other types of income, except
as provided in § 44-30-2.7, which were in
effect immediately prior to enactment of the Economic
Growth and Tax Relief Reconciliation Act
of 2001 (EGTRRA); provided, rate schedules shall be
adjusted for inflation by the tax
administrator beginning in taxable year 2002 and
thereafter in the manner prescribed for
adjustment by the commissioner of Internal Revenue in
26 U.S.C. § 1(f). However, for tax years
beginning on or after January 1, 2006, a taxpayer may
elect to use the alternative flat tax rate
provided in § 44-30-2.10 to calculate his or her
personal income tax liability.
(c) For tax years
beginning on or after January 1, 2001, if a taxpayer has an alternative
minimum tax for federal tax purposes, the taxpayer
shall determine if he or she has a Rhode
Island alternative minimum tax. The
multiplying the federal tentative minimum tax without
allowing for the increased exemptions
under the Jobs and Growth Tax Relief Reconciliation
Act of 2003 (as redetermined on federal
form 6251 Alternative Minimum Tax-Individuals) by
twenty-five and one-half percent (25.5%)
for tax year 2001, and twenty-five percent (25%) for
tax year 2002 and thereafter, and comparing
the product to the
the taxpayer's
(1) For tax years
beginning on or after January 1, 2005 and thereafter the exemption
amount for alternative minimum tax, for
the tax administrator in the manner prescribed for
adjustment by the commissioner of Internal
Revenue in 26 U.S.C. § 1(f).
(2) For the period
January 1, 2007 through December 31, 2007, and thereafter, Rhode
Island taxable income shall be determined by deducting
from federal adjusted gross income as
defined in 26 U.S.C. § 62 as modified by the
modifications in § 44-30-12 the
itemized deduction amount and the
(A) Tax imposed.
(1) There is hereby
imposed on the taxable income of married individuals filing joint
returns and surviving spouses a tax determined in
accordance with the following table:
(2) There is hereby
imposed on the taxable income of every head of household a tax
determined in accordance with the following table:
If taxable income is: The
tax is:
Not over $53,150 3.75%
of taxable income
Over $53,150 but not
over $128,500 $1,993.13
plus 7.00% of the excess over
$53,150
Over $128,500 but not
over $195,850 $7,267.63
plus 7.75% of the excess over
$128,500
Over $195,850 but not
over $349,700 $12,487.25
plus 9.00% of the excess
over $195,850
Over $349,700 $26,333.75
plus 9.90% of the excess
over $349,700
If taxable income is: The
tax is:
Not over $42,650 3.75%
of taxable income
Over $42,650 but not
over $110,100 $1,599.38
plus 7.00% of the excess over
$42,650
Over $110,100 but not over
$178,350 $6,320.88
plus 7.75% of the excess over
$110,100
Over $178,350 but not
over $349,700 $11,610.25
plus 9.00% of the excess
over $178,350
Over $349,700 $27,031.75
plus 9.90% of the excess
over $349,700
(3) There is hereby
imposed on the taxable income of unmarried individuals (other than
surviving spouses and heads of households) a tax
determined in accordance with the following
table:
If taxable income is: The
tax is:
Not over $31,850 3.75%
of taxable income
Over $31,850 but not
over $77,100 $1,194.38
plus 7.00% of the excess over
$31,850
Over $77,100 but not
over $160,850 $4,361.88
plus 7.75% of the excess over
$77,100
Over $160,850 but not
over $349,700 $10,852.50
plus 9.00% of the excess
over $160,850
Over $349,700 $27,849.00
plus 9.90% of the excess
over $349,700
(4) There is hereby
imposed on the taxable income of married individuals filing separate
returns and bankruptcy estates a tax determined in
accordance with the following table:
If taxable income is: The
tax is:
Not over $26,575 3.75%
of taxable income
Over $26,575 but not
over $64,250 $996.56
plus 7.00% of the excess over
$26,575
Over $64,250 but not
over $97,925 $3,633.81
plus 7.75% of the excess over
$64,250
Over $97,925 but not
over $174,850 $6,243.63
plus 9.00% of the excess over
$97,925
Over $174,850 $13,166.88
plus 9.90% of the excess
over $174,850
(5) There is hereby
imposed a taxable income of an estate or trust a tax determined in
accordance with the following table:
If taxable income is: The
tax is:
Not over $2,150 3.75%
of taxable income
Over $2,150 but not over
$5,000 $80.63
plus 7.00% of the excess over
$2,150
Over $5,000 but not over
$7,650 $280.13
plus 7.75% of the excess over
$5,000
Over $7,650 but not over
$10,450 $485.50
plus 9.00% of the excess over
$7,650
Over $10,450 $737.50
plus 9.90% of the excess over
$10,450
(6) Adjustments for
inflation.
The dollars amount
contained in paragraph (A) shall be increased by an amount equal to:
(a) Such dollar amount contained in paragraph (A) in
the year 1993, multiplied by;
(b) The cost-of-living
adjustment determined under section (J) with a base year of 1993;
(c) The cost-of-living
adjustment referred to in subparagraph (a) and (b) used in making
adjustments to the nine percent (9%) and nine and nine
tenths percent (9.9%) dollar amounts shall
be determined under section (J) by substituting
"1994" for "1993."
(B) Maximum capital
gains rates
(1) In general
If a taxpayer has a net
capital gain for tax years ending prior to January 1, 2010, the tax
imposed by this section for such taxable year shall
not exceed the sum of:
(a) 2.5 % of the net
capital gain as reported for federal income tax purposes under section
26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b).
(b) 5% of the net
capital gain as reported for federal income tax purposes under 26 U.S.C.
1(h)(1)(c).
(c) 6.25% of the net
capital gain as reported for federal income tax purposes under 26
U.S.C. 1(h)(1)(d).
(d) 7% of the net
capital gain as reported for federal income tax purposes under 26 U.S.C.
1(h)(1)(e).
(C) Itemized deductions.
(1) In general
For the purposes of
section (2) "itemized deductions" means the amount of federal
itemized deductions as modified by the modifications
in § 44-30-12.
(2) Individuals who do
not itemize their deductions
In the case of an
individual who does not elect to itemize his deductions for the taxable
year, they may elect to take a standard deduction.
(3) Basic standard
deduction.
The
table:
Filing status Amount
Single $5,350
Married filing jointly
or qualifying widow(er) $8,900
Married filing
separately $4,450
Head of Household $7,850
(4) Additional standard
deduction for the aged and blind.
An additional standard
deduction shall be allowed for individuals age sixty-five (65) or
older or blind in the amount of $1,300 for individuals
who are not married and $1,050 for
individuals who are married.
(5) Limitation on basic
standard deduction in the case of certain dependents.
In the case of an
individual to whom a deduction under section (E) is allowable to another
taxpayer, the basic standard deduction applicable to
such individual shall not exceed the greater
of:
(a) $850;
(b) The sum of $300 and
such individual's earned income;
(6) Certain individuals
not eligible for standard deduction.
In the case of:
(a) A married individual
filing a separate return where either spouse itemizes deductions;
(b) Nonresident alien
individual;
(c) An estate or trust;
The standard deduction
shall be zero.
(7) Adjustments for
inflation.
Each dollars amount
contained in paragraphs (3), (4) and (5) shall be increased by an
amount equal to:
(a) Such dollar amount
contained in paragraphs (3), (4) and (5) in the year 1988,
multiplied by
(b) The cost-of-living
adjustment determined under section (J) with a base year of 1988.
(D) Overall Limitation
on Itemized Deductions
(1) General rule.
In the case of an
individual whose adjusted gross income as modified by § 44-30-12
exceeds the applicable amount, the amount of the
itemized deductions otherwise allowable for the
taxable year shall be reduced by the lesser of:
(a) Three percent
(3%) of the excess of adjusted gross income as modified by § 44-30-12
over the applicable amount; or
(b) Eighty percent
(80%) of the amount of the itemized deductions otherwise allowable
for such taxable year.
(2) Applicable
amount.
(a) In general.
For purposes of
this section, the term "applicable amount" means $156,400 ($78,200 in
the case of a separate return by a married individual)
(b) Adjustments
for inflation.
Each dollar amount
contained in paragraph (a) shall be increased by an amount equal to:
(i) Such dollar amount contained in paragraph (a) in the
year 1991, multiplied by
(ii) The
cost-of-living adjustment determined under section (J) with a base year of
1991.
(3) Phase-out of
Limitation.
(a) In general.
In the case
of taxable year beginning after December 31, 2005, and before January 1,
2010, the reduction under section (1) shall be equal
to the applicable fraction of the amount which
would be the amount of such reduction.
(b) Applicable
fraction.
For purposes of
paragraph (a), the applicable fraction shall be determined in accordance
with the following table:
For taxable years
beginning in calendar year The applicable fraction is
2006 and 2007 2/3
2008 and 2009 1/3
(E) Exemption
Amount
(1) In general.
Except as
otherwise provided in this subsection, the term "exemption amount"
mean
$3,400.
(2) Exemption
amount disallowed in case of certain dependents.
In the case of an
individual with respect to whom a deduction under this section is
allowable to another taxpayer for the same taxable
year, the exemption amount applicable to such
individual for such individual's taxable year shall be
zero.
(3) Adjustments for
inflation.
The dollar amount contained
in paragraph (1) shall be increased by an amount equal to:
(a) Such dollar amount contained in paragraph (1) in
the year 1989, multiplied by
(b) The cost-of-living
adjustment determined under section (J) with a base year of 1989.
(4) Limitation.
(a) In general.
In the case of any
taxpayer whose adjusted gross income as modified for the taxable year
exceeds the threshold amount shall be reduced by the
applicable percentage.
(b) Applicable
percentage.
In the case of any
taxpayer whose adjusted gross income for the taxable year exceeds the
threshold amount, the exemption amount shall be
reduced by two (2) percentage points for each
$2,500 (or fraction thereof) by which the taxpayer's
adjusted gross income for the taxable year
exceeds the threshold amount. In the case of a married
individual filing a separate return, the
preceding sentence shall be applied by substituting
"$1,250" for "$2,500." In no event shall the
applicable percentage exceed one hundred percent (100%).
(c) Threshold Amount.
For the purposes of this
paragraph, the term "threshold amount" shall be determined with
the following table:
Filing status Amount
Single $156,400
Married filing jointly
of qualifying widow(er) $234,600
Married filing
separately $117,300
Head of Household $195,500
(d) Adjustments for
inflation.
Each dollars amount
contain in paragraph (b) shall be increased by an amount equal to:
(i) Such dollar amount contained
in paragraph (b) in the year 1991, multiplied by
(ii) The cost-of-living
adjustment determined under section (J) with a base year of 1991.
(5) Phase-out of Limitation.
(a) In general.
In the case of taxable years
beginning after December 31, 2005, and before January 1,
2010, the reduction under section 4 shall be equal to
the applicable fraction of the amount which
would be the amount of such reduction.
(b) Applicable fraction.
For the purposes of
paragraph (a), the applicable fraction shall be determined in
accordance with the following table:
For taxable years
beginning in calendar year The applicable fraction is
2006 and 2007 2/3
2008 and 2009 1/3
(F) Alternative Minimum
Tax
(1) General rule. There
is hereby imposed (in addition to any other tax imposed by this
subtitle) a tax equal to the excess (if any) of:
(a) The tentative
minimum tax for the taxable year, over
(b) The regular tax for
the taxable year.
(2) The tentative
minimum tax for the taxable year is the sum of:
(a) 6.5 percent of so
much of the taxable excess as does not exceed $175,000, plus
(b) 7.0 percent of so
much of the taxable excess above $175,000.
(3) The amount
determined under the preceding sentence shall be reduced by the
alternative minimum tax foreign tax credit for the
taxable year.
(4) Taxable excess. For
the purposes of this subsection the term "taxable excess" means
so much of the federal alternative minimum taxable
income as modified by the modifications in §
44-30-12 as exceeds the exemption amount.
(5) In the case of a
married individual filing a separate return, subparagraph (2) shall be
applied by substituting "$87,500" for
$175,000 each place it appears.
(6) Exemption amount.
For purposes of this
section "exemption amount" means:
Filing status Amount
Single $39,150
Married filing jointly
or qualifying widow(er) $53,700
Married filing
separately $26,850
Head of Household $39,150
Estate or trust $24,650
(7) Treatment of
unearned income of minor children
(a) In general.
In the case of a minor
child, the exemption amount for purposes of section (6) shall not
exceed the sum of:
(i)
Such child's earned income, plus
(ii) $6,000.
(8) Adjustments for
inflation.
The dollar amount
contained in paragraphs (6) and (7) shall be increased by an amount
equal to:
(a) Such dollar amount
contained in paragraphs (6) and (7) in the year 2004, multiplied
by
(b) The cost-of-living
adjustment determined under section (J) with a base year of 2004.
(9) Phase-out.
(a) In general.
The exemption amount of
any taxpayer shall be reduced (but not below zero) by an
amount equal to twenty-five percent (25%) of the
amount by which alternative minimum taxable
income of the taxpayer exceeds the threshold amount.
(b) Threshold amount.
For purposes of this
paragraph, the term "threshold amount" shall be determined with the
following table:
Filing status Amount
Single $123,250
Married filing jointly
or qualifying widow(er) $164,350
Married filing
separately $82,175
Head of Household $123,250
Estate or Trust $82,150
(c) Adjustments for
inflation
Each dollar amount
contained in paragraph (9) shall be increased by an amount equal to:
(i) Such dollar amount contained
in paragraph (9) in the year 2004, multiplied by
(ii) The cost-of-living
adjustment determined under section (J) with a base year of 2004.
(G) Other
(1) General rule. There
is hereby imposed (in addition to any other tax imposed by this
subtitle) a tax equal to twenty-five percent (25%) of:
(a) The Federal income
tax on lump-sum distributions.
(b) The Federal income
tax on parents' election to report child's interest and dividends.
(c) The recapture of
Federal tax credits that were previously claimed on
return.
(H) Tax for children
under 18 with investment income
(1) General rule. There
is hereby imposed a tax equal to twenty-five percent (25%) of:
(a) The Federal tax for children under the age of 18
with investment income.
(I) Averaging of farm
income
(1) General rule. At the
election of an individual engaged in a farming business or fishing
business, the tax imposed in section 2 shall be equal
to twenty-five percent (25%) of:
(a) The Federal
averaging of farm income as determined in IRC section 1301.
(J) Cost-of-Living
Adjustment
(1) In general.
The cost-of-living
adjustment for any calendar year is the percentage (if any) by which:
(a) The CPI for the preceding calendar year exceeds
(b) The CPI for the base
year.
(2) CPI for any calendar
year.
For purposes of
paragraph (1), the CPI for any calendar year is the average of the
Consumer Price Index as of the close of the twelve
(12) month period ending on August 31 of
such calendar year.
(3) Consumer Price Index
For purposes of
paragraph (2), the term "consumer price index" means the last
consumer
price index for all urban consumers published by the department
of labor. For purposes of the
preceding sentence, the revision of the consumer price
index which is most consistent with the
consumer price index for calendar year 1986 shall be
used.
(4) Rounding.
(a) In general.
If any increase
determined under paragraph (1) is not a multiple of $50, such increase
shall be rounded to the next lowest multiple of $50.
(b) In the case of a
married individual filing a separate return, subparagraph (a) shall be
applied by substituting "$25" for $50 each
place it appears.
(K) Credits against tax.
For tax years beginning on or after January 1, 2001, a taxpayer
entitled to any of the following federal credits
enacted prior to January 1, 1996 shall be entitled to
a credit against the
(1) [Deleted by P.L.
2007, ch. 73, art. 7, § 5].
(2) Child and dependent
care credit;
(3) General business
credits;
(4) Credit for elderly
or the disabled;
(5) Credit for prior
year minimum tax;
(6) Mortgage interest
credit;
(7) Empowerment zone
employment credit;
(8) Qualified electric
vehicle credit.
(L) Credit Against Tax
for Adoption. For tax years beginning on or after January 1, 2006,
a taxpayer entitled to the federal adoption credit
shall be entitled to a credit against the Rhode
Island tax imposed under this section if the adopted
child was under the care, custody, or
supervision of the
(M) The credit shall be twenty-five percent (25%) of
the aforementioned federal credits
provided there shall be no deduction based on any
federal credits enacted after January 1, 1996,
including the rate reduction credit provided by the federal
Economic Growth and Tax
Reconciliation Act of 2001 (EGTRRA). In no event shall
the tax imposed under this section be
reduced to less than zero. A taxpayer required to
recapture any of the above credits for federal tax
purposes shall determine the
prescribed in this subsection.
(N) Rhode
(1) In general.
A taxpayer entitled to a
federal earned income credit shall be allowed a
earned income credit equal to twenty-five percent
(25%) of the federal earned income credit.
Such credit shall not exceed the amount of the
(2) Refundable portion.
In the event the
amount of
(a) For purposes of
paragraph (2) refundable earned income credit means fifteen percent
(15%) of the amount by which the
income tax.
(O) The tax
administrator shall recalculate and submit necessary revisions to paragraphs
(A) through (J) to the general assembly no later than
February 1, 2010 and every three (3) years
thereafter for inclusion in the statute.
(3) For the period
January 1, 2011 through December 31, 2011, and thereafter, “Rhode
Revenue Code, 26 U.S.C. 1 et seq., and as modified for
section 44-30-12 less the amount of
subparagraph 44-30-2.6(c)(3)(B), and less the amount
of personal exemption allowed pursuant of
subparagraph 44-30-2.6(c)(3)(C).
(A) Tax imposed.
(I) There is hereby
imposed on the taxable income of married individuals filing joint
returns, qualifying widow(er),
every head of household, unmarried individuals, married
individuals filing separate returns and bankruptcy
estates, a tax determined in accordance with the
following table:
RI Taxable
Over But not over Pay + %on Excess on the amount over
$0 - $ 55,000 $0 + 3.75% $ 0
55,000 - 125,000 2,063 + 4.75% 55,000
125,000 - 5,388 + 5.99% 125,000
(II) There is hereby
imposed on the taxable income of an estate or trust a tax determined
in accordance with the following table:
RI Taxable
Over But not over Pay + % on Excess on the amount over
$0 - $ 2,230 $0 + 3.75% $ 0
2,230 - 7,022 84 + 4.75% 2,230
7,022 - 312 + 5.99% 7,022
(B) Deductions:
(I)
Only the
following table:
Filing status: Amount
Single $7,500
Married filing
jointly or qualifying widow(er) $15,000
Married filing
separately $7,500
Head of Household
$11,250
(II) Nonresident
alien individuals, estates and trusts are not eligible for standard
deductions.
(III) In the case of
any taxpayer whose adjusted gross income, as modified for Rhode
Island purposes pursuant to section 44-30-12, for the
taxable year exceeds one hundred seventy-
five thousand dollars ($175,000), the standard
deduction amount shall be reduced by the
applicable percentage. The term “applicable
percentage” means twenty (20) percentage points for
each five thousand dollars ($5,000) (or fraction
thereof) by which the taxpayer’s adjusted gross
income for the taxable year exceeds one hundred
seventy-five thousand dollars ($175,000).
(C) Exemption Amount:
(I) The term "exemption
amount" means three thousand five hundred dollars ($3,500)
multiplied by the number of exemptions allowed for the
taxable year for federal income tax
purposes.
(II) Exemption amount
disallowed in case of certain dependents. In the case of an
individual with respect to whom a deduction under this
section is allowable to another taxpayer
for the same taxable year, the exemption amount
applicable to such individual for such
individual's taxable year shall be zero.
(D) In the case of any
taxpayer whose adjusted gross income, as modified for Rhode
Island purposes pursuant to section 33-30-12, for the
taxable year exceeds one hundred seventy-
five thousand dollars ($175,000), the exemption amount
shall be reduced by the applicable
percentage. The term “applicable percentage” means
twenty (20) percentage points for each five
thousand dollars ($5,000) (or fraction thereof) by
which the taxpayer’s adjusted gross income for
the taxable year exceeds one hundred seventy-five thousand
dollars ($175,000).
(E) Adjustment for
inflation. The dollar amount contained in subparagraphs 44-30-
2.6(c)(3)(A), 44-30-2.6(c)(3)(B) and
44-30-2.6(c)(3)(C) shall be increased annually by an amount
equal to:
(I) Such dollar
amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30-
2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) adjusted for
inflation using a base tax year of 2000,
multiplied by;
(II) The
cost-of-living adjustment with a base year of 2000.
(III) For the
purposes of this section the cost-of-living adjustment for any calendar year is
the percentage (if any) by which the consumer price
index for the preceding calendar year
exceeds the consumer price index for the base year.
The consumer price index for any calendar
year is the average of the consumer price index as of
the close of the twelve (12) month period
ending on August 31, of such calendar year.
(IV) For the purpose
of this section the term “consumer price index” means the last
consumer price index for all urban consumers published
by the department of labor. For the
purpose of this section the revision of the consumer
price index which is most consistent with the
consumer price index for calendar year 1986 shall be
used.
(V) If any increase determined
under this section is not a multiple of fifty dollars
($50.00), such increase shall be rounded to the next
lower multiple of fifty dollars ($50.00). In the
case of a married individual filing separate return,
if any increase determined under this section is
not a multiple of twenty-five dollars ($25.00), such
increase shall be rounded to the next lower
multiple of twenty-five dollars ($25.00).
(E) Credits against
tax.
(I) Notwithstanding
any other provisions of
or after January 1, 2011, the only credits allowed
against a tax imposed under this chapter shall be
as follows:
(a)
pursuant to subparagraph 44-30-2.6(c)(2)(N).
(b) Property Tax
Relief Credit: Credit shall be allowed for property tax relief as provided
in section 44-33-1 et seq.
(c) Lead Paint
Credit: Credit shall be allowed for residential lead abatement income tax
credit as provided in section 44-30.3-1 et seq.
(d) Credit for income
taxes of other states. Credit shall be allowed for income tax paid to
other states pursuant to section 44-30-74.
(e) Historic
Structures Tax Credit: Credit shall be allowed for historic structures tax
credit as provided in section 44-33.2-1 et seq.
(f) Motion Picture
Productions Tax Credit: Credit shall be allowed for motion picture
production tax credit as provided in section 44-31.2-1
et seq.
(g) Child and
Dependent Care: Credit shall be allowed for twenty-five percent (25%) of
the federal child and dependent care credit allowable
for the taxable year for federal purposes;
provided, however, such credit shall not exceed the
(h) Tax credits for
contributions to Scholarship Organizations: Credit shall be allowed for
contributions to scholarship organizations as provided
in section 44-62 et seq.
(i)
Credit for tax withheld. Wages upon which tax is required to be withheld shall
be
taxable as if no withholding were required, but any
amount of
actually deducted and withheld in any calendar year
shall be deemed to have been paid to the tax
administrator on behalf of the person from whom
withheld, and the person shall be credited with
having paid that amount of tax for the taxable year
beginning in that calendar year. For a taxable
year of less than twelve (12) months, the credit shall
be made under regulations of the tax
administrator.
(2) Except as
provided in section 1 above, no other state and federal tax credit shall be
available to the taxpayers in computing tax liability
under this chapter.
SECTION
2. Section 44-30-2.10 of the General Laws in Chapter 44-30 entitled
"Personal
Income Tax" is hereby
amended to read as follows:
44-30-2.10.
Alternative flat tax rate. -- (a) For tax years beginning on or after
January
1, 2006 and ending prior to January 1, 2011, a
taxpayer may elect to compute his or her Rhode
Island personal income tax liability as provided in
this section. If no election is made, the
taxpayer's personal income tax liability shall be
computed as otherwise provided in this chapter.
(b)
For purposes of this section, "alternative
federal adjusted gross income as determined for
federal income tax purposes as modified by §§
44-30-12 and 44-30-32 for residents and nonresidents,
respectively. No other state or federal
deductions or adjustments to income shall be available
to the taxpayer.
(c)
For purposes of this section, the "alternative tax rate" shall be
eight percent (8.0%)
for the tax year 2006; seven and one-half percent
(7.5%) for tax year 2007; seven percent (7%)
for tax year 2008; six and one-half percent (6.5%) for
tax year 2009; and six percent (6%) for tax
year 2010; and five and one-half percent (5.5%) for
tax years 2011 and thereafter;
(d)
The alternative personal income tax shall be determined by multiplying the
taxpayer's alternative
credits:
(1)
Credit for income taxes paid to other states as provided for in § 44-30-18;
(2)
Credit for
(3)
Credit for
RI Reg. Sec. PIT 90-17;
(4)
Credit for
(5)
Credit for
a nonresident member as provided in § 7-16-73(4).
No
other state or federal tax credits shall be available to the taxpayer in
computing the
alternative personal income tax liability.
(e)
The provisions of this section may apply regardless of the taxpayer's filing
status.
SECTION
3. Section 44-33-3 of the General Laws in Chapter 44-33 entitled "Property
Tax Relief" is hereby
amended to read as follows:
44-33-3.
Definitions. -- As used in this chapter:
(1)
"Claimant" means a homeowner or renter, who has filed a claim under
this chapter
and was domiciled in this state for the entire
calendar year for which he or she files a claim for
relief under this chapter. In the case of claim for
rent constituting property taxes accrued, the
claimant shall have rented property during the
preceding year for which he or she files for relief
under this chapter. Claimant shall not mean or include
any person claimed as a dependent by any
taxpayer under the Internal Revenue Code of the
two (2) individuals of a household are able to meet
the qualifications for a claimant, they may
determine between themselves as to who the claimant
is. If they are unable to agree, the matter is
referred to the tax administrator and his or her
decision is final. If a homestead is occupied by two
(2) or more individuals, and more than one individual
is able to qualify as a claimant, and some or
all of the qualified individuals are not related, the
individuals may determine among themselves
as to who the claimant is. If they are unable to
agree, the matter is referred to the tax
administrator, and his or her decision is final.
(2)
"Disabled" means those persons who are receiving a social security
disability benefit.
(3) "Gross
rent" means rental paid in cash or its equivalent solely for the right of
occupancy of a homestead, exclusive of charges for any
utilities, services, furniture, furnishings,
or personal property appliances furnished by the
landlord as a part of the rental agreement. If the
landlord and tenant have not dealt with each other at
arm's length, and the tax administrator is
satisfied that the gross rent charged was excessive,
he or she may adjust the gross rent to a
reasonable amount for purposes of this chapter.
"Gross rent" includes the rental of space paid to a
landlord for parking of a mobile home, or docking or
mooring a houseboat, exclusive of any
charges for utilities, services, furniture,
furnishings, or personal appliances furnished by the
landlord as a part of the rental. Twenty percent (20%)
of the annual gross rental plus the space
rental fees paid during the year are the annual
"property taxes accrued."
(4) "
surrounding it, not exceeding one acre, as is
reasonably necessary for use of the dwelling as a
home, and may consist of a part of the multi-dwelling
or multi-purpose building and a part of the
land upon which it is built ("owned"
includes a vendee in possession under a land contract and
one or more joint tenants or tenants in common). It
does not include personal property such as
furniture, furnishings, or appliances, but a mobile
home or a houseboat may be a homestead.
(5)
"Household" means one or more persons occupying a dwelling unit and
living as a
single nonprofit housekeeping unit.
"Household" shall not include bona fide lessees, tenants, or
roomers, and boarders on contract.
(6) "Household
income" means all income received by all persons of a household in a
calendar year while members of the household.
(7) "Income"
means the sum of federal adjusted gross income as defined in the Internal
Revenue Code of the
including, but not limited to, the amount of capital
gains excluded from adjusted gross income,
alimony, support money, non-taxable strike benefits,
cash public assistance and relief (not
including relief granted under this chapter), the
gross amount of any pension or annuity
(including Railroad Retirement Act (see 45 U.S.C.
section 231 et seq.) benefits, all payments
received under the federal Social Security Act, 42
U.S.C. section 301 et seq., state unemployment
insurance laws, and veterans' disability pensions (see
38 U.S.C. section 301 et seq.)), non-taxable
interest received from the federal government or any
of its instrumentalities, workers'
compensation, and the gross amount of "loss of
time" insurance. It shall not include gifts from
nongovernmental sources, or surplus foods or other
relief in kind supplied by a public or private
agency. For the purpose of this chapter, the
calculation of "income" shall not include any
deductions for rental losses, business losses, capital
losses, exclusion for foreign income, and any
losses received from pass-through entities.
(8) "Property
taxes accrued" means property taxes (exclusive of special assessments,
delinquent interest, and charges for service) levied
on a claimant's homestead in this state in 1977
or any calendar year thereafter. If a homestead is
owned by two (2) or more persons or entities as
joint tenants or tenants in common, and one or more
persons or entities are not a member of
claimant's household, "property taxes
accrued" is that part of property taxes levied on the
homestead which reflects the ownership percentage of
the claimant and his or her household. For
purposes of this subdivision, property taxes are
"levied" when the tax roll is certified by the city
or town assessor. When a homestead is sold during the
calendar year of the levy, the "property
taxes accrued" for the seller and buyer is the
amount of the tax levy prorated to each in the
closing agreement pertaining to the sale of the
homestead or, if not provided for in the closing
agreement, the tax levy is prorated between seller and
buyer based upon the delivery date of the
deed of conveyance. When a household owns and occupies
two (2) or more homesteads in the
same calendar year, "property taxes accrued"
is the sum of the prorated taxes attributable to the
household for each of the homesteads. If the household
owns and occupies the homestead for the
part of the calendar year and rents a household for
part of the calendar year, it may include both
the proration of taxes on the homestead owned and
"rent constituting property taxes accrued"
with respect to the months the homestead is rented, in
computing the amount of the claim. All
prorations are made on the basis of the gross tax levy after all
exemptions. If a homestead is an
integral part of a larger unit such as a farm, or a
multi-purpose or multi-dwelling building,
property taxes accrued is that percentage of the total
property taxes accrued as the value of the
homestead is of the total value. For the purposes of
this subdivision, "unit" refers to the parcel of
property covered by a single tax statement of which
the homestead is a part.
(9) "Rent
constituting property taxes accrued" means twenty percent (20%) of the
gross
rent actually paid in cash or its equivalent in any
calendar year by a claimant and his or her
household solely for the right of occupancy of their
and which rent constitutes the basis, in the
succeeding calendar year, of a claim for relief under
this chapter by the claimant, but shall not include
any part of the rent paid for occupancy of
premises which are legally exempt from the payment of
property taxes.
SECTION
4. This act shall take effect on January 1, 2011.
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LC02758/SUB A
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