2012 -- S 2456

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LC00970

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO TAXATION - ESTATE AND TRANSFER TAXES

     Introduced By: Senator Michael J. McCaffrey

     Date Introduced: February 16, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-22-1.1 of the General Laws in Chapter 44-22 entitled "Estate

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and Transfer Taxes - Liability and Computation" is hereby amended to read as follows:

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     44-22-1.1. Tax on net estate of decedent. -- (a) (1) For decedents whose death occurs on

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or after January 1, 1992, but prior to January 1, 2002, a tax is imposed upon the transfer of the net

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estate of every resident or nonresident decedent as a tax upon the right to transfer. The tax is a

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sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. section 2011.

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      (2) For decedents whose death occurs on or after January 1, 2002, but prior to January 1,

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2010 a tax is imposed upon the transfer of the net estate of every resident or nonresident decedent

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as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for state death

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taxes allowed by 26 U.S.C. section 2011 as it was in effect as of January 1, 2001; provided,

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however, that the tax shall be imposed only if the net taxable estate shall exceed six hundred

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seventy-five thousand dollars ($675,000). Any scheduled increase in the unified credit provided

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in 26 U.S.C. section 2010 in effect on January 1, 2001, or thereafter, shall not apply.

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      (3) For decedents whose death occurs on or after January 1, 2010, and prior to January 1,

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2013, a tax is imposed upon the transfer of the net estate of every resident or nonresident

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decedent as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for

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state death taxes allowed by 26 U.S.C. section 2011 as it was in effect as of January 1, 2001;

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provided, however, that the tax shall be imposed only if the net taxable estate shall exceed eight

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

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and each January 1 thereafter, until January 1, 2013, said amount shall be adjusted by the

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percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as

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published by the United States Department of Labor Statistics determined as of September 30 of

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the prior calendar year; said adjustment shall be compounded annually and shall be rounded up to

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the nearest five dollar ($5.00) increment. Any scheduled increase in the unified credit provided in

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26 U.S.C. section 2010 in effect on January 1, 2003, or thereafter, shall not apply.

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     (4) For decedents whose death occurs on or after January 1, 2013, a tax is imposed upon

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the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to

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transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C.

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section 2011 as it was in effect as of January 1, 2001; provided, however, that a credit shall be

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allowed against any tax so determined in the amount of ninety-nine thousand six hundred dollars

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($99,600). Any scheduled increase in the unified credit provided in 26 U.S.C. section 2010 in

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effect on January 1, 2003, or thereafter, shall not apply.

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      (b) If the decedent's estate contains property having a tax situs not within the state, then

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the tax determined by this section is reduced to an amount determined by multiplying the tax by a

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fraction whose numerator is the gross estate excluding all property having a tax situs not within

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the state at the decedent's death and whose denominator is the gross estate. In determining the

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fraction, no deductions are considered and the gross estate is not reduced by a mortgage or other

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indebtedness for which the decedent's estate is not liable.

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      (c) (1) The terms "gross taxable estate", "federal gross estate" or "net taxable estate" used

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in this chapter or chapter 23 of this title has the same meaning as when used in a comparable

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context in the laws of the United States, unless a different meaning is clearly required by the

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provisions of this chapter or chapter 23 of this title. Any reference in this chapter or chapter 23 of

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this title to the Internal Revenue Code or other laws of the United States means the Internal

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Revenue Code of 1954, 26 U.S.C. section 1 et seq.

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      (2) For decedents whose death occurs on or after January 1, 2002, the terms "gross

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taxable estate" "federal gross estate" or "net taxable estate" used in this chapter or chapter 23 of

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this title has the same meaning as when used in a comparable context in the laws of the United

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States, unless a different meaning is clearly required by the provisions of this chapter or chapter

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23 of this title. Any reference in this chapter or chapter 23 of this title to the Internal Revenue

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Code or other laws of the United States means the Internal Revenue Code of 1954, 26 U.S.C.

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section 1 et seq., as they were in effect as of January 1, 2001, unless otherwise provided.

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      (d) All values are as finally determined for federal estate tax purposes.

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      (e) Property has a tax situs within the state of Rhode Island:

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      (1) If it is real estate or tangible personal property and has actual situs within the state of

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Rhode Island; or

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      (2) If it is intangible personal property and the decedent was a resident.

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     SECTION 2. This act shall take effect upon passage.

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LC00970

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - ESTATE AND TRANSFER TAXES

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     This act would allow a credit against the Rhode Island estate tax of $99,600 for decedents

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dying after December 31, 2013.

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     This act would take effect upon passage.

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LC00970

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