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2012 -- H 7454 | |
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LC00115 | |
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STATE OF RHODE ISLAND | |
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IN GENERAL ASSEMBLY | |
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JANUARY SESSION, A.D. 2012 | |
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____________ | |
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A N A C T | |
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RELATING TO TAXATION - PERSONAL INCOME TAX | |
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Introduced By: Representatives Valencia, Blazejewski, Walsh, O`Neill, and Tanzi | |
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Date Introduced: February 09, 2012 | |
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Referred To: House Finance | |
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It is enacted by the General Assembly as follows: | |
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SECTION 1. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal |
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Income Tax" is hereby amended to read as follows: |
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44-30-2.6. Rhode Island taxable income -- Rate of tax. [Effective January 1, 2011.] -- |
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(a) "Rhode Island taxable income" means federal taxable income as determined under the |
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Internal Revenue Code, 26 U.S.C. section 1 et seq., not including the increase in the basic |
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standard deduction amount for married couples filing joint returns as provided in the Jobs and |
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Growth Tax Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief |
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Reconciliation Act of 2001 (EGTRRA), and as modified by the modifications in section 44-30- |
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12. |
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(b) Notwithstanding the provisions of sections 44-30-1 and 44-30-2, for tax years |
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beginning on or after January 1, 2001, a Rhode Island personal income tax is imposed upon the |
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Rhode Island taxable income of residents and nonresidents, including estates and trusts, at the rate |
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of twenty-five and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for |
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tax year 2002 and thereafter of the federal income tax rates, including capital gains rates and any |
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other special rates for other types of income, except as provided in section 44-30-2.7, which were |
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in effect immediately prior to enactment of the Economic Growth and Tax Relief Reconciliation |
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Act of 2001 (EGTRRA); provided, rate schedules shall be adjusted for inflation by the tax |
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administrator beginning in taxable year 2002 and thereafter in the manner prescribed for |
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adjustment by the commissioner of Internal Revenue in 26 U.S.C. section 1(f). However, for tax |
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years beginning on or after January 1, 2006, a taxpayer may elect to use the alternative flat tax |
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rate provided in section 44-30-2.10 to calculate his or her personal income tax liability. |
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(c) For tax years beginning on or after January 1, 2001, if a taxpayer has an alternative |
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minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode |
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Island alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by |
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multiplying the federal tentative minimum tax without allowing for the increased exemptions |
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under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal |
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form 6251 Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%) |
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for tax year 2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing |
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the product to the Rhode Island tax as computed otherwise under this section. The excess shall be |
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the taxpayer's Rhode Island alternative minimum tax. |
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(1) For tax years beginning on or after January 1, 2005 and thereafter the exemption |
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amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by |
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the tax administrator in the manner prescribed for adjustment by the commissioner of Internal |
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Revenue in 26 U.S.C. section 1(f). |
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(2) For the period January 1, 2007 through December 31, 2007, and thereafter, Rhode |
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Island taxable income shall be determined by deducting from federal adjusted gross income as |
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defined in 26 U.S.C. section 62 as modified by the modifications in section 44-30-12 the Rhode |
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Island itemized deduction amount and the Rhode Island exemption amount as determined in this |
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section. |
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(A) Tax imposed. |
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(1) There is hereby imposed on the taxable income of married individuals filing joint |
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returns and surviving spouses a tax determined in accordance with the following table: |
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If taxable income is: The tax is: |
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Not over $53,150 3.75% of taxable income |
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Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the |
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excess over $53,150 |
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Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the |
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excess over $128,500 |
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Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the |
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excess over $195,850 |
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Over $349,700 $26,333.75 plus 9.90% of the |
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excess over $349,700 |
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(2) There is hereby imposed on the taxable income of every head of household a tax |
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determined in accordance with the following table: |
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If taxable income is: The tax is: |
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Not over $42,650 3.75% of taxable income |
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Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the |
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excess over $42,650 |
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Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the |
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excess over $110,100 |
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Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the |
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excess over $178,350 |
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Over $349,700 $27,031.75 plus 9.90% of the |
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excess over $349,700 |
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(3) There is hereby imposed on the taxable income of unmarried individuals (other than |
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surviving spouses and heads of households) a tax determined in accordance with the following |
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table: |
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If taxable income is: The tax is: |
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Not over $31,850 3.75% of taxable income |
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Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the |
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excess over $31,850 |
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Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the |
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excess over $77,100 |
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Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the |
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excess over $160,850 |
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Over $349,700 $27,849.00 plus 9.90% of the |
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excess over $349,700 |
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(4) There is hereby imposed on the taxable income of married individuals filing separate |
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returns and bankruptcy estates a tax determined in accordance with the following table: |
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If taxable income is: The tax is: |
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Not over $26,575 3.75% of taxable income |
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Over $26,575 but not over $64,250 $996.56 plus 7.00% of the |
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excess over $26,575 |
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Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the |
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excess over $64,250 |
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Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the |
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excess over $97,925 |
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Over $174,850 $13,166.88 plus 9.90% of the |
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excess over $174,850 |
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(5) There is hereby imposed a taxable income of an estate or trust a tax determined in |
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accordance with the following table: |
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If taxable income is: The tax is: |
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Not over $2,150 3.75% of taxable income |
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Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess |
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over $2,150 |
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Over $5,000 but not over $7,650 $280.13 plus 7.75% of the |
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excess over $5,000 |
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Over $7,650 but not over $10,450 $485.50 plus 9.00% of the |
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excess over $7,650 |
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Over $10,450 $737.50 plus 9.90% of the |
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excess over $10,450 |
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(6) Adjustments for inflation. |
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The dollars amount contained in paragraph (A) shall be increased by an amount equal to: |
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(a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by; |
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1993; |
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(c) The cost-of-living adjustment referred to in subparagraph (a) and (b) used in making |
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adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall |
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be determined under section (J) by substituting "1994" for "1993." |
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(B) Maximum capital gains rates |
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(1) In general |
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If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax |
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imposed by this section for such taxable year shall not exceed the sum of: |
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(a) 2.5 % of the net capital gain as reported for federal income tax purposes under section |
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26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b). |
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(b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C. |
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1(h)(1)(c). |
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(c) 6.25% of the net capital gain as reported for federal income tax purposes under 26 |
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U.S.C. 1(h)(1)(d). |
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(d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C. |
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1(h)(1)(e). |
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(2) For tax years beginning on or after January 1, 2010 the tax imposed on net capital |
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gain shall be determined under subdivision 44-30-2.6(c)(2)(A). |
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(C) Itemized deductions. |
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(1) In general |
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For the purposes of section (2) "itemized deductions" means the amount of federal |
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itemized deductions as modified by the modifications in section 44-30-12. |
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(2) Individuals who do not itemize their deductions |
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In the case of an individual who does not elect to itemize his deductions for the taxable |
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year, they may elect to take a standard deduction. |
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(3) Basic standard deduction. |
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The Rhode Island standard deduction shall be allowed in accordance with the following |
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table: |
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Filing status Amount |
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Single $5,350 |
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Married filing jointly or qualifying widow(er) $8,900 |
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Married filing separately $4,450 |
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Head of Household $7,850 |
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(4) Additional standard deduction for the aged and blind. |
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An additional standard deduction shall be allowed for individuals age sixty-five (65) or |
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older or blind in the amount of $1,300 for individuals who are not married and $1,050 for |
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individuals who are married. |
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(5) Limitation on basic standard deduction in the case of certain dependents. |
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In the case of an individual to whom a deduction under section (E) is allowable to another |
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taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater |
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of: |
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(a) $850; |
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(b) The sum of $300 and such individual's earned income; |
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(6) Certain individuals not eligible for standard deduction. |
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In the case of: |
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(a) A married individual filing a separate return where either spouse itemizes deductions; |
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(b) Nonresident alien individual; |
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(c) An estate or trust; |
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The standard deduction shall be zero. |
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(7) Adjustments for inflation. |
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Each dollars amount contained in paragraphs (3), (4) and (5) shall be increased by an |
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amount equal to: |
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(a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988, |
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multiplied by |
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1988. |
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(D) Overall limitation on itemized deductions |
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(1) General rule. |
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In the case of an individual whose adjusted gross income as modified by section 44-30-12 |
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exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the |
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taxable year shall be reduced by the lesser of: |
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(a) Three percent (3%) of the excess of adjusted gross income as modified by section 44- |
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30-12 over the applicable amount; or |
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(b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable |
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for such taxable year. |
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(2) Applicable amount. |
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(a) In general. |
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For purposes of this section, the term "applicable amount" means $156,400 ($78,200 in |
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the case of a separate return by a married individual) |
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(b) Adjustments for inflation. |
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Each dollar amount contained in paragraph (a) shall be increased by an amount equal to: |
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(i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by |
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(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991. |
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(3) Phase-out of Limitation. |
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(a) In general. |
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In the case of taxable year beginning after December 31, 2005, and before January 1, |
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2010, the reduction under section (1) shall be equal to the applicable fraction of the amount which |
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would be the amount of such reduction. |
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(b) Applicable fraction. |
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For purposes of paragraph (a), the applicable fraction shall be determined in accordance |
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with the following table: |
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For taxable years beginning in The applicable fraction is |
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calendar year |
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2006 and 2007 2/3 |
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2008 and 2009 1/3 |
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(E) Exemption amount |
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(1) In general. |
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Except as otherwise provided in this subsection, the term "exemption amount" mean |
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$3,400. |
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(2) Exemption amount disallowed in case of certain dependents. In the case of an |
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individual with respect to whom a deduction under this section is allowable to another taxpayer |
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for the same taxable year, the exemption amount applicable to such individual for such |
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individual's taxable year shall be zero. |
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(3) Adjustments for inflation. |
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The dollar amount contained in paragraph (1) shall be increased by an amount equal to: |
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(a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by |
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1989. |
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(4) Limitation. |
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(a) In general. |
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In the case of any taxpayer whose adjusted gross income as modified for the taxable year |
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exceeds the threshold amount shall be reduced by the applicable percentage. |
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(b) Applicable percentage. |
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In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the |
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threshold amount, the exemption amount shall be reduced by two (2) percentage points for each |
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$2,500 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year |
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exceeds the threshold amount. In the case of a married individual filing a separate return, the |
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preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no event shall the |
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applicable percentage exceed one hundred percent (100%). |
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(c) Threshold Amount. |
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For the purposes of this paragraph, the term "threshold amount" shall be determined with |
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the following table: |
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Filing status Amount |
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Single $156,400 |
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Married filing jointly of qualifying widow(er) $234,600 |
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Married filing separately $117,300 |
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Head of Household $195,500 |
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(d) Adjustments for inflation. |
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Each dollars amount contain in paragraph (b) shall be increased by an amount equal to: |
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(i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by |
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(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991. |
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(5) Phase-out of Limitation. |
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(a) In general. |
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In the case of taxable years beginning after December 31, 2005, and before January 1, |
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2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which |
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would be the amount of such reduction. |
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(b) Applicable fraction. |
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For the purposes of paragraph (a), the applicable fraction shall be determined in |
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accordance with the following table: |
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For taxable years beginning in The applicable fraction is |
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calendar year |
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2006 and 2007 2/3 |
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8-11 |
2008 and 2009 1/3 |
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(F) Alternative minimum tax |
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(1) General rule. - There is hereby imposed (in addition to any other tax imposed by this |
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subtitle) a tax equal to the excess (if any) of: |
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(a) The tentative minimum tax for the taxable year, over |
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(b) The regular tax for the taxable year. |
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(2) The tentative minimum tax for the taxable year is the sum of: |
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(a) 6.5 percent of so much of the taxable excess as does not exceed $175,000, plus |
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(b) 7.0 percent of so much of the taxable excess above $175,000. |
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(3) The amount determined under the preceding sentence shall be reduced by the |
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alternative minimum tax foreign tax credit for the taxable year. |
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(4) Taxable excess. - For the purposes of this subsection the term "taxable excess" means |
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so much of the federal alternative minimum taxable income as modified by the modifications in |
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section 44-30-12 as exceeds the exemption amount. |
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(5) In the case of a married individual filing a separate return, subparagraph (2) shall be |
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applied by substituting "$87,500" for $175,000 each place it appears. |
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(6) Exemption amount. |
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For purposes of this section "exemption amount" means: |
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Filing status Amount |
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Single $39,150 |
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Married filing jointly or qualifying widow(er) $53,700 |
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Married filing separately $26,850 |
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Head of Household $39,150 |
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9-34 |
Estate or trust $24,650 |
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(7) Treatment of unearned income of minor children |
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(a) In general. |
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In the case of a minor child, the exemption amount for purposes of section (6) shall not |
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exceed the sum of: |
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(i) Such child's earned income, plus |
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9-40 |
(ii) $6,000. |
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(8) Adjustments for inflation. |
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The dollar amount contained in paragraphs (6) and (7) shall be increased by an amount |
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equal to: |
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(a) Such dollar amount contained in paragraphs (6) and (7) in the year 2004, multiplied |
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9-45 |
by |
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9-46 |
(b) The cost-of-living adjustment determined under section (J) with a base year of 2004. |
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9-47 |
(9) Phase-out. |
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(a) In general. |
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The exemption amount of any taxpayer shall be reduced (but not below zero) by an |
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9-50 |
amount equal to twenty-five percent (25%) of the amount by which alternative minimum taxable |
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9-51 |
income of the taxpayer exceeds the threshold amount. |
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9-52 |
(b) Threshold amount. |
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9-53 |
For purposes of this paragraph, the term "threshold amount" shall be determined with the |
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following table: |
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Filing status Amount |
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Single $123,250 |
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9-57 |
Married filing jointly or qualifying widow(er) $164,350 |
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9-58 |
Married filing separately $82,175 |
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9-59 |
Head of Household $123,250 |
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9-60 |
(c) Adjustments for inflation |
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9-61 |
Each dollar amount contained in paragraph (9) shall be increased by an amount equal to: |
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9-62 |
(i) Such dollar amount contained in paragraph (9) in the year 2004, multiplied by |
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9-63 |
(ii) The cost-of-living adjustment determined under section (J) with a base year of 2004. |
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9-64 |
(G) Other Rhode Island taxes |
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9-65 |
(1) General rule. - There is hereby imposed (in addition to any other tax imposed by this |
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9-66 |
subtitle) a tax equal to twenty-five percent (25%) of: |
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9-67 |
(a) The Federal income tax on lump-sum distributions. |
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10-68 |
(b) The Federal income tax on parents' election to report child's interest and dividends. |
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10-69 |
(c) The recapture of Federal tax credits that were previously claimed on Rhode Island |
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10-70 |
return. |
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(H) Tax for children under 18 with investment income |
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(1) General rule. - There is hereby imposed a tax equal to twenty-five percent (25%) of: |
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(a) The Federal tax for children under the age of 18 with investment income. |
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10-74 |
(I) Averaging of farm income |
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10-75 |
(1) General rule. - At the election of an individual engaged in a farming business or |
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10-76 |
fishing business, the tax imposed in section 2 shall be equal to twenty-five percent (25%) of: |
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10-77 |
(a) The Federal averaging of farm income as determined in IRC section 1301. |
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10-78 |
(J) Cost-of-living adjustment |
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10-79 |
(1) In general. |
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10-80 |
The cost-of-living adjustment for any calendar year is the percentage (if any) by which: |
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10-81 |
(a) The CPI for the preceding calendar year exceeds |
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10-82 |
(b) The CPI for the base year. |
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10-83 |
(2) CPI for any calendar year. For purposes of paragraph (1), the CPI for any calendar |
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10-84 |
year is the average of the Consumer Price Index as of the close of the twelve (12) month period |
|
10-85 |
ending on August 31 of such calendar year. |
|
10-86 |
(3) Consumer Price Index |
|
10-87 |
For purposes of paragraph (2), the term "consumer price index" means the last consumer |
|
10-88 |
price index for all urban consumers published by the department of labor. For purposes of the |
|
10-89 |
preceding sentence, the revision of the consumer price index which is most consistent with the |
|
10-90 |
consumer price index for calendar year 1986 shall be used. |
|
10-91 |
(4) Rounding. |
|
10-92 |
(a) In general. |
|
10-93 |
If any increase determined under paragraph (1) is not a multiple of $50, such increase |
|
10-94 |
shall be rounded to the next lowest multiple of $50. |
|
10-95 |
(b) In the case of a married individual filing a separate return, subparagraph (a) shall be |
|
10-96 |
applied by substituting "$25" for $50 each place it appears. |
|
10-97 |
(K) Credits against tax. - For tax years beginning on or after January 1, 2001, a taxpayer |
|
10-98 |
entitled to any of the following federal credits enacted prior to January 1, 1996 shall be entitled to |
|
10-99 |
a credit against the Rhode Island tax imposed under this section: |
|
10-100 |
(1) [Deleted by P.L. 2007, ch. 73, art. 7, section 5]. |
|
10-101 |
(2) Child and dependent care credit; |
|
11-102 |
(3) General business credits; |
|
11-103 |
(4) Credit for elderly or the disabled; |
|
11-104 |
(5) Credit for prior year minimum tax; |
|
11-105 |
(6) Mortgage interest credit; |
|
11-106 |
(7) Empowerment zone employment credit; |
|
11-107 |
(8) Qualified electric vehicle credit. |
|
11-108 |
(L) Credit against tax for adoption. - For tax years beginning on or after January 1, 2006, |
|
11-109 |
a taxpayer entitled to the federal adoption credit shall be entitled to a credit against the Rhode |
|
11-110 |
Island tax imposed under this section if the adopted child was under the care, custody, or |
|
11-111 |
supervision of the Rhode Island department of children, youth and families prior to the adoption. |
|
11-112 |
(M) The credit shall be twenty-five percent (25%) of the aforementioned federal credits |
|
11-113 |
provided there shall be no deduction based on any federal credits enacted after January 1, 1996, |
|
11-114 |
including the rate reduction credit provided by the federal Economic Growth and Tax |
|
11-115 |
Reconciliation Act of 2001 (EGTRRA). In no event shall the tax imposed under this section be |
|
11-116 |
reduced to less than zero. A taxpayer required to recapture any of the above credits for federal tax |
|
11-117 |
purposes shall determine the Rhode Island amount to be recaptured in the same manner as |
|
11-118 |
prescribed in this subsection. |
|
11-119 |
(N) Rhode Island earned income credit |
|
11-120 |
(1) In general. |
|
11-121 |
A taxpayer entitled to a federal earned income credit shall be allowed a Rhode Island |
|
11-122 |
earned income credit equal to twenty-five percent (25%) of the federal earned income credit. |
|
11-123 |
Such credit shall not exceed the amount of the Rhode Island income tax. |
|
11-124 |
(2) Refundable portion. |
|
11-125 |
In the event the Rhode Island earned income credit allowed under section (J) exceeds the |
|
11-126 |
amount of Rhode Island income tax, a refundable earned income credit shall be allowed. |
|
11-127 |
(a) For purposes of paragraph (2) refundable earned income credit means fifteen percent |
|
11-128 |
(15%) of the amount by which the Rhode Island earned income credit exceeds the Rhode Island |
|
11-129 |
income tax. |
|
11-130 |
(O) The tax administrator shall recalculate and submit necessary revisions to paragraphs |
|
11-131 |
(A) through (J) to the general assembly no later than February 1, 2010 and every three (3) years |
|
11-132 |
thereafter for inclusion in the statute. |
|
11-133 |
(3) For the period January 1, 2011 through December 31, 2011, and thereafter, "Rhode |
|
11-134 |
Island taxable income" means federal adjusted gross income as determined under the Internal |
|
11-135 |
Revenue Code, 26 U.S.C. 1 et seq., and as modified for Rhode Island purposes pursuant to |
|
11-136 |
section 44-30-12 less the amount of Rhode Island Basic Standard Deduction allowed pursuant to |
|
12-1 |
subparagraph 44-30-2.6(c)(3)(B), and less the amount of personal exemption allowed pursuant of |
|
12-2 |
subparagraph 44-30-2.6(c)(3)(C). |
|
12-3 |
(A) Tax imposed. |
|
12-4 |
(I) There is hereby imposed on the taxable income of |
|
12-5 |
|
|
12-6 |
individuals filing separate returns and bankruptcy estates, a tax determined in accordance with the |
|
12-7 |
following table: |
|
12-8 |
RI Taxable Income RI Income Tax |
|
12-9 |
Over But not over Pay + % on Excess on the amount |
|
12-10 |
over |
|
12-11 |
$ 0 - $ 55,000 $ 0 + 3.75% $ 0 |
|
12-12 |
55,000 - 125,000 2,063 + 4.75% 55,000 |
|
12-13 |
125,000 - |
|
12-14 |
|
|
12-15 |
(II) There is hereby imposed on the taxable income of married individuals filing joint |
|
12-16 |
returns and qualifying widow(ers), a tax determined in accordance with the following table: |
|
12-17 |
RI Taxable Income RI Income Tax |
|
12-18 |
Over But not over Pay + % on Excess on the amount |
|
12-19 |
over |
|
12-20 |
$ 0 - $ 55,000 $ 0 + 3.75% $ 0 |
|
12-21 |
55,000 - 125,000 2,063 + 4.75% 55,000 |
|
12-22 |
125,000 - 250,000 5,388 + 5.99% 125,000 |
|
12-23 |
250,000 12,876 + 10.09% 250,000 |
|
12-24 |
|
|
12-25 |
determined in accordance with the following table: |
|
12-26 |
RI Taxable Income RI Income Tax |
|
12-27 |
Over But not over Pay + % Over - Excess on the amount |
|
12-28 |
over |
|
12-29 |
$ 0 - $ 2,230 $ 0 + 3.75% $ 0 |
|
12-30 |
2,230 - 7,022 84 + 4.75% 2,230 |
|
12-31 |
7,022 - 312 + 5.99% 7,022 |
|
12-32 |
(B) Deductions: |
|
12-33 |
(I) Rhode Island Basic Standard Deduction. Only the Rhode Island standard deduction |
|
12-34 |
shall be allowed in accordance with the following table: |
|
13-35 |
Filing status: Amount |
|
13-36 |
Single $7,500 |
|
13-37 |
Married filing jointly or qualifying widow(er) $15,000 |
|
13-38 |
Married filing separately $7,500 |
|
13-39 |
Head of Household $11,250 |
|
13-40 |
(II) Nonresident alien individuals, estates and trusts are not eligible for standard |
|
13-41 |
deductions. |
|
13-42 |
(III) In the case of any taxpayer whose adjusted gross income, as modified for Rhode |
|
13-43 |
Island purposes pursuant to section 44-30-12, for the taxable year exceeds one hundred seventy- |
|
13-44 |
five thousand dollars ($175,000), the standard deduction amount shall be reduced by the |
|
13-45 |
applicable percentage. The term "applicable percentage" means twenty (20) percentage points for |
|
13-46 |
each five thousand dollars ($5,000) (or fraction thereof) by which the taxpayer's adjusted gross |
|
13-47 |
income for the taxable year exceeds one hundred seventy-five thousand dollars ($175,000). |
|
13-48 |
(C) Exemption Amount: |
|
13-49 |
(I) The term "exemption amount" means three thousand five hundred dollars ($3,500) |
|
13-50 |
multiplied by the number of exemptions allowed for the taxable year for federal income tax |
|
13-51 |
purposes. |
|
13-52 |
(II) Exemption amount disallowed in case of certain dependents. In the case of an |
|
13-53 |
individual with respect to whom a deduction under this section is allowable to another taxpayer |
|
13-54 |
for the same taxable year, the exemption amount applicable to such individual for such |
|
13-55 |
individual's taxable year shall be zero. |
|
13-56 |
(D) In the case of any taxpayer whose adjusted gross income, as modified for Rhode |
|
13-57 |
Island purposes pursuant to section 33-30-12, for the taxable year exceeds one hundred seventy- |
|
13-58 |
five thousand dollars ($175,000), the exemption amount shall be reduced by the applicable |
|
13-59 |
percentage. The term "applicable percentage" means twenty (20) percentage points for each five |
|
13-60 |
thousand dollars ($5,000) (or fraction thereof) by which the taxpayer's adjusted gross income for |
|
13-61 |
the taxable year exceeds one hundred seventy-five thousand dollars ($175,000). |
|
13-62 |
(E) Adjustment for inflation. - The dollar amount contained in subparagraphs 44-30- |
|
13-63 |
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 |
|
13-64 |
equal to: |
|
13-65 |
(I) Such dollar amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30- |
|
13-66 |
2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) adjusted for inflation using a base tax year of 2000, |
|
13-67 |
multiplied by; |
|
13-68 |
(II) The cost-of-living adjustment with a base year of 2000. |
|
14-69 |
(III) For the purposes of this section the cost-of-living adjustment for any calendar year is |
|
14-70 |
the percentage (if any) by which the consumer price index for the preceding calendar year |
|
14-71 |
exceeds the consumer price index for the base year. The consumer price index for any calendar |
|
14-72 |
year is the average of the consumer price index as of the close of the twelve (12) month period |
|
14-73 |
ending on August 31, of such calendar year. |
|
14-74 |
(IV) For the purpose of this section the term "consumer price index" means the last |
|
14-75 |
consumer price index for all urban consumers published by the department of labor. For the |
|
14-76 |
purpose of this section the revision of the consumer price index which is most consistent with the |
|
14-77 |
consumer price index for calendar year 1986 shall be used. |
|
14-78 |
(V) If any increase determined under this section is not a multiple of fifty dollars |
|
14-79 |
($50.00), such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the |
|
14-80 |
case of a married individual filing separate return, if any increase determined under this section is |
|
14-81 |
not a multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower |
|
14-82 |
multiple of twenty-five dollars ($25.00). |
|
14-83 |
(E) Credits against tax. |
|
14-84 |
(I) Notwithstanding any other provisions of Rhode Island Law, for tax years beginning on |
|
14-85 |
or after January 1, 2011, the only credits allowed against a tax imposed under this chapter shall be |
|
14-86 |
as follows: |
|
14-87 |
(a) Rhode Island Earned Income Credit: Credit shall be allowed for earned income credit |
|
14-88 |
pursuant to subparagraph 44-30-2.6(c)(2)(N). |
|
14-89 |
(b) Property Tax Relief Credit: Credit shall be allowed for property tax relief as provided |
|
14-90 |
in section 44-33-1 et seq. |
|
14-91 |
(c) Lead Paint Credit: Credit shall be allowed for residential lead abatement income tax |
|
14-92 |
credit as provided in section 44-30.3-1 et seq. |
|
14-93 |
(d) Credit for income taxes of other states. - Credit shall be allowed for income tax paid |
|
14-94 |
to other states pursuant to section 44-30-74. |
|
14-95 |
(e) Historic Structures Tax Credit: Credit shall be allowed for historic structures tax |
|
14-96 |
credit as provided in section 44-33.2-1 et seq. |
|
14-97 |
(f) Motion Picture Productions Tax Credit: Credit shall be allowed for motion picture |
|
14-98 |
production tax credit as provided in section 44-31.2-1 et seq. |
|
14-99 |
(g) Child and Dependent Care: Credit shall be allowed for twenty-five percent (25%) of |
|
14-100 |
the federal child and dependent care credit allowable for the taxable year for federal purposes; |
|
14-101 |
provided, however, such credit shall not exceed the Rhode Island tax liability. |
|
14-102 |
(h) Tax credits for contributions to Scholarship Organizations: Credit shall be allowed for |
|
14-103 |
contributions to scholarship organizations as provided in section 44-62 et seq. |
|
15-1 |
(i) Credit for tax withheld. - Wages upon which tax is required to be withheld shall be |
|
15-2 |
taxable as if no withholding were required, but any amount of Rhode Island personal income tax |
|
15-3 |
actually deducted and withheld in any calendar year shall be deemed to have been paid to the tax |
|
15-4 |
administrator on behalf of the person from whom withheld, and the person shall be credited with |
|
15-5 |
having paid that amount of tax for the taxable year beginning in that calendar year. For a taxable |
|
15-6 |
year of less than twelve (12) months, the credit shall be made under regulations of the tax |
|
15-7 |
administrator. |
|
15-8 |
(2) Except as provided in section 1 above, no other state and federal tax credit shall be |
|
15-9 |
available to the taxpayers in computing tax liability under this chapter. |
|
15-10 |
SECTION 2. This act shall take effect upon passage. |
|
| |
|
======= | |
|
LC00115 | |
|
======== | |
|
EXPLANATION | |
|
BY THE LEGISLATIVE COUNCIL | |
|
OF | |
|
A N A C T | |
|
RELATING TO TAXATION - PERSONAL INCOME TAX | |
|
*** | |
|
16-1 |
This act would add a four and one tenth percent (4.1%) additional tax on all personal |
|
16-2 |
income over two hundred thousand dollars ($200,000) for heads of households, unmarried |
|
16-3 |
individuals, married individuals filing separate returns and bankruptcy estates and a four and one |
|
16-4 |
tenth percent (4.1%) over two hundred fifty-thousand dollars for married couples filing joint |
|
16-5 |
returns and qualifying widows(ers). |
|
16-6 |
This act would take effect upon passage. |
|
| |
|
======= | |
|
LC00115 | |
|
======= |