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HB 7312

AN ACT RELATING TO TAXATION -- ESTATE AND TRANSFER TAXES -- LIABILITY AND COMPUTATION

2026 Regular Session Introduced by Mike Chippendale and 5 co-sponsors

The bill raises Rhode Island’s estate tax exemption to $15,000,000 for deaths on/after Jan 1, 2027, reducing tax liability for very large estates.

05/07/2026 Committee recommended measure be held for further study
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Bill Summary · HB 7312

Summary of HB 7312 (Rhode Island, 2026) – Estate and Transfer Taxes – Liability and Computation

Purpose and Intent

HB 7312 proposes to modify Rhode Island’s estate tax regime by increasing the net taxable estate threshold that triggers the Rhode Island estate tax for deaths occurring from January 1, 2027 onward. The bill aims to align Rhode Island’s framework with the state’s prior approach to using the federal estate tax credit as the basis for the Rhode Island tax, while gradually adjusting the exemption amount over time for inflation.

Key takeaway: The bill would raise the exemption (net taxable estate) to $15,000,000 for deaths on or after January 1, 2027, effectively reducing or delaying Rhode Island’s estate tax liability for larger estates.

Key Provisions and Changes

  1. Tax on net estate (base framework)

    • The bill retains Rhode Island’s approach to calculating estate tax as a tax on the right to transfer the net estate, with the amount tied to the federal credit for state death taxes (as specified by the U.S. Internal Revenue Code in effect at various reference dates).
    • The structure is phased by periods (based on death dates) corresponding to historical U.S. tax configurations (1992–2001, 2002–2009, 2010–2014, 2015 onward, and future 2027+), each with its own applicability conditions and credit references.

  2. Exemption thresholds by period (summary)

    • Deaths on/after 1992 but before 2002: Tax equals the maximum federal credit allowed as of that era.
    • Deaths on/after 2002 but before 2010: Tax equals the maximum credit as of 2001, with a $675,000 net taxable estate floor (tax applies only if estate exceeds this amount).
    • Deaths on/after 2010 but before 2015: Tax equals the maximum credit as of 2001; floor increases (initially $850,000) with CPI-U adjustments from 2011–2015, compounded annually, rounded to the nearest $5.
    • Deaths on/after 2015: Tax equals the maximum credit as of 2001; Rhode Island-specific credit of $64,400 is subtracted as a state credit against the calculated tax; CPI-U adjustments to the Rhode Island credit accrue annually from 2016, compounded and rounded to the nearest $5.
    • Deaths on/after 2027: Tax equals the maximum federal credit as of 2001; Rhode Island credit applies; estate threshold increases to $15,000,000; CPI-U adjustments to the Rhode Island credit begin in 2028, compounded and rounded to the nearest $5.

  3. Inflation adjustments and rounding

    • When applicable, thresholds and Rhode Island credits are adjusted annually based on the CPI-U (as of September 30 of the prior year) and rounded up to the nearest $5.

  4. Credit mechanics and situs rules

    • If a portion of the estate has tax situs outside Rhode Island, the tax is prorated by a fraction reflecting the proportion of the estate with Rhode Island situs, using gross values without deductions for mortgages or indebtedness.

  5. Definitions and alignment with federal law

    • The bill preserves alignment of terms (gross taxable estate, federal gross estate, net taxable estate) with federal definitions, and clarifies reference to the Internal Revenue Code as it existed on specified dates (primarily 2001 and earlier references).

  6. Effective date

    • The act takes effect upon passage.

Who Would Be Affected

  • Estates of both Rhode Island residents and nonresidents who have Rhode Island-situs property.
  • Executors and beneficiaries of larger estates (those close to or above the new $15,000,000 threshold beginning 2027) who would face Rhode Island estate tax liability.
  • Tax professionals and estate planners who must apply the applicable set of thresholds and CPI-U adjustments based on death date.

Procedural and Timeline Aspects

  • Introduced: January 23, 2026.
  • Referred to: House Finance.
  • Scheduled: Hearing and/or consideration as of May 7, 2026.
  • Effective date: Upon passage (no delayed or phased-go-live beyond “effective on enactment” is stated).

Notes for Readers

  • The most notable change is the new $15,000,000 net estate threshold for deaths occurring on/after January 1, 2027, reducing Rhode Island estate tax exposure for very large estates.
  • The bill preserves historical credit-based mechanics while incorporating annual CPI-U-driven adjustments to Rhode Island-specific credits and thresholds.
  • Practical impact depends on an estate’s domicile, situs, and composition, particularly the proportion of Rhode Island property.

Compiled from official sources — confirm details with the bill’s official record.

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