Rhode Island HB 7696: AN ACT RELATING TO TAXATION -- ESTATE AND TRANSFER TAXES (Repeals the estate tax and transfer tax.)

Bill Text

2020 -- H 7696
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LC004268
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2020
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A N A C T
RELATING TO TAXATION -- ESTATE AND TRANSFER TAXES
Introduced By: Representatives Chippendale, Filippi, Lyle, Price, and Place
Date Introduced: February 26, 2020
Referred To: House Finance

It is enacted by the General Assembly as follows:
SECTION 1. Chapter 44-22 of the General Laws entitled "Estate and Transfer Taxes - 1
Liability and Computation" is hereby repealed in its entirety. 2
CHAPTER 44-22 3
Estate and Transfer Taxes - Liability and Computation 4
44-22-1. Tax on net estate of decedents -- Additional tax on postponed enjoyment -- 5
Deductions -- Marital deduction. 6
(a) A tax is imposed upon the transfer of the net estate of every resident or nonresident 7
decedent as a tax upon the right to transfer. The tax is imposed at the rate of two percent (2%) 8
upon all amounts not in excess of twenty-five thousand dollars ($25,000); at the rate of three 9
percent (3%) upon all amounts in excess of twenty-five thousand dollars ($25,000) and not 10
exceeding fifty thousand dollars ($50,000); at the rate of four percent (4%) upon all amounts in 11
excess of fifty thousand dollars ($50,000) and not exceeding one hundred thousand dollars 12
($100,000); at the rate of five percent (5%) upon all amounts in excess of one hundred thousand 13
dollars ($100,000) and not exceeding two hundred fifty thousand dollars ($250,000); at the rate of 14
six percent (6%) upon all amounts in excess of two hundred fifty thousand dollars ($250,000) and 15
not exceeding five hundred thousand dollars ($500,000); at the rate of seven percent (7%) upon 16
all amounts in excess of five hundred thousand dollars ($500,000) and not exceeding seven 17
hundred fifty thousand dollars ($750,000); at the rate of eight percent (8%) upon all amounts in 18
excess of seven hundred fifty thousand dollars ($750,000) and not exceeding one million dollars 19

LC004268 - Page 2 of 25
($1,000,000); at the rate of nine percent (9%) upon all amounts in excess of one million dollars 1
($1,000,000). An additional tax is imposed at the rate of two percent (2%) upon all or any part of 2
each estate devised, bequeathed, or conveyed in such manner that it becomes necessary to 3
postpone the assessment of taxes imposed by this chapter until the person entitled to the estate 4
comes into beneficial enjoyment or possession of the estate; and provided, further, that an 5
additional tax is not assessed and collected, as provided in §§ 44-23-9 -- 44-23-12, in case a 6
settlement of taxes is effected under the provisions of § 44-23-25. 7
(b) In computing the value of the net estate in subsection (a) of this section, there is 8
deducted from the estate and exempted from the tax twenty-five thousand dollars ($25,000). 9
(c) In computing the value of the net estate in subsection (a) of this section, there is 10
deducted from the estate and exempted from the tax all property or interests transferred to any 11
corporation, association, or institution located in Rhode Island which is exempt from taxation by 12
charter or under the laws of this state; or to any corporation, association, or institution located 13
outside of this state, which if located within this state, would be exempt from taxation; provided, 14
that the state of domicile of the corporation, association, or institution allows a reciprocal 15
exemption to any similar Rhode Island corporation, association, or institution; or to any person in 16
trust for the same or for use by the same for charitable purposes; or to any city or town in this 17
state for public purposes. 18
(d) In computing the value of the net estate in subsection (a) of this section, there is 19
deducted from the estate and exempted from the tax United States civil and federal military 20
service annuity payments. 21
(e) In computing the value of the net estate in subsection (a) of this section, there is 22
deducted from the estate and exempted from the estate tax a marital deduction, as defined in 26 23
U.S.C. § 2056, in the amount of one hundred seventy-five thousand dollars ($175,000), from 24
property or beneficial interests which pass or have passed from the decedent to the surviving 25
spouse, but only to the extent that the interests are included in determining the value of the gross 26
estate. 27
(f)(1) In computing the value of the net estate in subsection (a) of this section, there is 28
deducted from the estate and exempted from the estate tax, an orphan's deduction, provided, that: 29
(i) the decedent does not have a surviving spouse, and (ii) the decedent is survived by a minor 30
child who, immediately after the death of the decedent, has no known parent, an amount equal to 31
the value of any interest in property which passes or has passed from the decedent to the child, 32
but only to the extent that the interest is included in determining the value of the gross estate. The 33
a