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SB 3160

AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

2026 Regular Session Introduced by Jake Bissaillon and 1 co-sponsor

The bill imposes an 8% local tax on gross rents for qualifying affordable housing and converted non-residential builds, with rules and compliance to preserve affordability.

05/21/2026 Committee recommended measure be held for further study
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Bill Summary · SB 3160

Summary of SB 3160 (2026) – Rhode Island

Main purpose and intent

SB 3160 proposes a new local tax framework for qualifying low-income housing and for converting non-residential buildings into residential property. The bill creates an eight percent (8%) tax on the gross rental income for eligible properties, with a structured path to gradually increase (for conversion projects) over a 30-year period, and it sets forth rules to ensure affordable housing preservation and broader state-wide concerns about low-income housing development.

Key provisions and changes

  • Qualifying low-income housing (Section 44-5-13.11(a))

    • Residential rental property with an occupancy permit issued on/after Jan 1, 1995, that is restricted by a covenant in favor of a government unit or the Rhode Island Housing and Mortgage Finance Corporation (RIHMFC) to rents or occupants’ incomes, is taxed at 8% of the property’s previous year’s gross scheduled rental income (or a lesser local percentage).
    • Two affordability thresholds may trigger the 8% tax:
    • At least 40% of units have housing costs (rent + utilities) ≤ 30% of gross income for households ≤ 80% of statewide AMI, adjusted for metro area and family size; or
    • At least 30% of units have housing costs ≤ 30% of gross income for households ≤ 60% of statewide AMI.
    • An alternative carve-out exists for units defined as “low- and moderate-income housing” under RI law, taxed at 8% with the remainder taxed at non-residential rates.

  • Conversion from non-residential to residential (Section 44-5-13.11(b))

    • For buildings converted to residential use meeting certain size or unit thresholds, a fixed schedule applies for 30 years, with the tax rate starting at 8% for years 1–15 and gradually increasing to 10–12% by year 16 onward, ending after 30 years.

  • Administration and scope (Section 44-5-13.11(c)-(d))

    • Property owners must provide a certified rent roll annually.
    • For mixed-use buildings, the assessor determines residential vs. non-residential portions; taxes are allocated accordingly.
    • Conversions must meet responsible contracting standards, registered apprenticeship requirements, and prevailing wage requirements (for high-cost projects).

  • Compliance and enforcement (Section 44-5-13.11(d))

    • The local assessor requires confirmation from the Department of Labor and Training that responsible contracting, apprenticeship, and prevailing wage standards are satisfied. Violations can revoke or deny the tax treatment.

  • Existing tax treatment (Section 44-5-13.11(e))

    • Properties taxed under this section as of Dec 31, 2024 can continue with prior rates if the owner wishes; the treatment is transferable to new owners if conditions are met.

  • State-wide concern and limits (Section 44-5-13.11(f)-(g))

    • No municipality may exceed the statute’s rates for qualifying low-income housing or adaptive reuse.
    • Subsection (b) (conversion) expires and is repealed for residential rental housing not created by July 1, 2037 (i.e., the conversion provision sunsets for non-created housing).

  • Effective date

    • The act takes effect upon passage.

Who is affected

  • Owners and developers of qualifying low-income housing and of buildings converted from non-residential to residential use.
  • Local assessors who administer the tax and verify compliance.
  • Employers and contractors involved in qualifying projects, due to responsible contracting, apprenticeship, and prevailing wage requirements.
  • Tenants in eligible properties, through the affordability restrictions tied to the tax status.

Timeline and procedural notes

  • Introduction date: March 27, 2026.
  • Scheduled for hearing/consideration: May 21, 2026.
  • The conversion provisions have a sunset for not-created conversions by July 1, 2037.
  • Effective date is upon passage.

This bill aims to incentivize the development and preservation of affordable housing by applying a targeted tax rate, while ensuring labor standards and local accountability through compliance and reporting requirements.

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

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