Bill
HB 5473
Rhode Island would set new personal income tax brackets and rates, adjust inflation annually, apply AMT rules, cap capital gains, and modify deductions/exemptions.
Status and procedure
- Introduced: February 12, 2025 (House Finance).
- Most recent action: 05/06/2025 — Committee recommended the measure be held for further study.
- The bill amends Rhode Island General Laws § 44-30-2.6 (personal income tax).
Purpose / Intent
- To set out (and in part rewrite) the rules for computing Rhode Island taxable income and personal income tax liability, including tax-rate schedules by filing status, alternative minimum tax (AMT) treatment, capital‑gains rate limits, deduction and exemption rules, and inflation adjustments.
Key provisions and changes
- Rhode Island taxable income: Defined as federal taxable income (26 U.S.C. § 1 et seq.) with specified state modifications and references to § 44-30-12.
- Rate structure: Establishes graduated rate schedules (dollar brackets and tax computations) for:
- Married filing jointly / surviving spouses
- Head of household
- Unmarried individuals (single)
- Married filing separately / bankruptcy estates
- Estates and trusts
- Bottom and top marginal rates: A lowest rate of 3.75% on the lowest bracket; top marginal rate of 9.90% on income above specified high thresholds (e.g., > $349,700 for most filers; > $174,850 for married filing separately; > $10,450 for estates/trusts).
- Specific bracket thresholds and formula amounts are set (examples for married filing jointly: 0–$53,150; $53,150–$128,500; $128,500–$195,850; $195,850–$349,700; over $349,700, with corresponding base taxes plus percentage rates).
- Inflation adjustments: Dollar amounts in the tables are indexed for inflation by the tax administrator using federal cost‑of‑living adjustment methodology (26 U.S.C. § 1(f)), with historical base-year references specified.
- Alternative minimum tax (AMT): Rhode Island AMT is computed by applying set percentage factors (25.5% for 2001, 25% for 2002 onward) to the federal tentative minimum tax, then comparing to regular state tax; AMT exemption amounts are inflation‑adjusted.
- Capital gains: Caps on the state tax imposed on net capital gains are specified as percentage-of-federal‑gain categories for tax years ending prior to Jan. 1, 2010; post‑2010 treatment references another subdivision in the statute.
- Itemized deductions and exemptions: The bill references state itemized‑deduction and exemption determinations (some portions of § (C) are truncated in the provided text).
Who is affected
- All Rhode Island taxpayers: residents and nonresidents with RI-source income, including individuals across filing statuses, estates and trusts.
- The AMT and capital gains provisions affect taxpayers with those specific tax attributes.
- The inflation‑indexing provisions affect how brackets and exemptions change over time.
Fiscal and implementation notes
- The text provided does not include a fiscal note. Changes to brackets, rates, and indexing can affect state revenue and taxpayer liabilities; consult the Office of Revenue/Office of Fiscal Analysis for an official estimate.
- Several procedural actions and hearings occurred; as of May 6, 2025, the committee recommended holding the measure for further study.
Limitations
- The posted version is long and partially truncated (itemized deduction section not fully included). For a complete legal reading and official fiscal impact, consult the full bill text on the legislature’s website or the Legislative Counsel’s Office.
Compiled from official sources — confirm details with the bill’s official record.
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