Coming up in Committee: Tax Bills Being Heard by the RI General Assembly, Today, May 28

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1. Proposed retirement-income tax exemptions:

  • (H Finance; Thu, May 28)
  • H5000: Exempts “all income received from federal, state and local governments’ retirement plans, social security retirement and disability benefits, military pensions, railroad retirement benefits, private pension plans, and deferred-compensation plans in the public and private sector” from the RI income tax, restricted to people 65 years of age or older.
  • H5055: Exempts “all income received from federal, state and local governments’ retirement plans, private pension plans, and deferred-compensation plans in the public and private sector” from the RI income tax.
  • H5056: Exempts the same income sources as H5055 plus “social security retirement and disability benefits” from the RI income tax.
  • H5057/H5447: Exempts only “all income received from social security retirement and disability benefits” from the RI income tax.
  • H5203: Exempts “all income received from social security retirement and disability benefits, military pensions, and pension plans in the public and private sector” from the RI income tax.
  • H5207: Exempts “the amount of any retirement income received by an individual who has attained the age used for calculating the maximum social security retirement benefits” from the RI income tax.
  • H5446: Exempts out-of-state pension benefits from the RI income tax, if they are taxed by the other state.
  • H5234: Exempts “all state income tax refunds included in his or her federal adjusted gross income where the refund was originally claimed as an itemized deduction for federal income tax purposes” from the state income tax.
  • H5325/H5391: Exempts “the amount of military pension” from the federal adjusted gross income used to calculate the RI income tax.
  • H5236: Exempts “up to fifteen thousand dollars ($15,000) when withdrawing from any retirement or savings plan” from the federal gross income used to calculate RI income tax.

2. Proposed changes to the Rhode Island estate tax:

  • (H Finance; Thu, May 28)
  • H5209: From the official description: “This act would provide that estates in Rhode Island be taxed at a rate equal to the federal revenue act for estate, inheritance, and succession taxes”.
  • H5737: Establishes a $2.5M threshold on the estate tax for this year, moving to $3M beginning next year.
  • H5735: Exempts a “qualified small business” from the estate tax, along with procedures and definitions for doing so.
  • H5279: Exempts $5M of “property…used by the decedent in the conduct of his or her trade or business” from the estate tax.

3. Proposed changes to the minimum business tax:

  • (H Finance; Thu, May 28)
  • H5058: Exempts businesses from the $500 corporate minimum tax for the first three years of their existence.
  • H5231: Reduces the minimum corporate tax from $500 to $50.
  • H5562: Reduces the minimum corporate tax from $500 to $250 for businesses with more than 50 employees.
  • H5549: Reduces the minimum corporate tax from $500 to $0 for businesses with fewer than 50 employees. Businesses with exactly 50 employees need a better lobby.  They’ll be the only ones paying the original $500 if both bills pass.
  • H5433: Phases out the corporate minimum tax, completely eliminating it by 2019.

4. Proposed tax-incentive plans for promoting economic activity:

  • (H Finance; Thu, May 28)
  • H6225: Tax-credits for businesses that create new jobs, provided that they have “enter[ed] into an incentive agreement” with the RI Commerce Corporation, prior to the issuance of the tax-credits. The first thing the Commerce Corporation will have to give approval to is “a detailed description of the proposed job creation including industry sectors and the number of new full-time jobs that are sought to be approved for tax credits”. The minimum number of jobs needed to receive credits varies with the size of the business, but it hovers around 10% of the existing workforce.
  • H5116: Reduces the corporate income tax by 0.25% multiplied by the “the number of units of new employment for each such taxable year through the taxable year ending on or before December 31, 2017” or after 2017, by the “the number of units of new employment reported for such taxable year ending in 2017″, up to a maximum reduction of 6% “for the applicable income tax rate” or 3% “for the applicable personal income tax rate”.
  • H5852: Makes the RI motion-picture tax-credit refundable, extends it to the year 2025 (from 2019), and lowers it from 25% to 23%. Also, H5852 makes historic tax-credits refundable and extends them to 2022 (from 2016). Also also, H5835 and H5729 add reporting requirements for historical tax credit recipients.
  • H6000: Exempts “hospitals not operated for a profit” from the state income tax.
  • (S Finance; Thu, May 28)
  • S0471: Exempts alcoholic beverages sold by “farmer-winery licensees” and distilleries from the sales tax.
  • S0213: Exempts “the purchase or use of tangible personal property or 24 services used to access the internet” from the sales tax. Would the purchase of the laptop I’m using to access the GA website to write this post have qualified for this exemption (*if it hadn’t been done in Attleboro)?

5. New upper-income tax brackets:

  • (H Finance; Thu, May 28)
  • H5206: Creates 7 new upper state income tax brackets, up to 15.5% on incomes over $5M, with “all revenue collected on taxable income under this section in excess of the first two hundred and fifty thousand dollars” to be deposited into restricted receipt accounts “to be allocated as follows: one restricted receipt account for the sole purpose of state aid to cities and towns, with each municipality to receive aid from such account, on an annual basis, in an amount proportionate to its population; and one restricted receipt account for the sole purpose of funding the reimbursement of public school housing construction at such time as when the state moratorium on school housing and construction aid terminates”.
  • (S Finance; Thu, May 28)
  • S0468: Creates an 8% tax bracket on incomes over $250,000, and permanently appropriates 3% of state tax revenue to local (non-educational) aid.

6. A few others:

  • (H Finance; Thu, May 28)
  • H5336: Allows a municipal economic development zone (where qualifying businesses are “exempt from the requirement to charge and collect fifty percent (50%) of the current sales and use tax…for a period of ten years”) to be established “in a municipally designated and state-approved ‘growth center’ in accordance with the Land-Use 2025 element of the state guide plan”.
  • H5335: From the official description: “This act would add the enterprise zone tax credit to the list of tax credits available to the taxpayers in computing state personal income tax liability under this chapter”.
  • H5328: Increases the amount of tax paid on certain rent controlled and/or income controlled properties from 8% to 12% “of the property’s previous 10 years’ gross scheduled rental income or a lesser percentage as determined by each municipality”.


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