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SB 2827

AN ACT RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION

2026 Regular Session Introduced by Lou DiPalma and 4 co-sponsors

SB 2827 broadens and clarifies Rhode Island tax exemptions for various property and organizations, expands net income rules, and adds urban/small farmer exemptions with land-use pe

06/19/2026 Signed by Governor
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Bill Summary · SB 2827

Summary of SB 2827 (2026) – Rhode Island

Main purpose and intent

SB 2827, introduced in the Rhode Island General Assembly in 2026, aims to modify tax exemptions and definitions related to property subject to taxation, corporate tax, and sales/use tax exemptions. The bill expands, narrows, or clarifies various exemptions and treatment for specific property types, organizations, and economic provisions to support public policy goals such as education, religion, charitable activities, open space preservation, energy, and urban farming.

Key provisions and changes

  • Property tax exemptions (44-3-3)

    • The bill continues and enumerates a broad list of property exemptions, including property owned by the state, lands owned by the federal government, government securities, religious and educational properties, veterans organizations, libraries, hospitals, and many charitable/501(c)(3) entities.
    • Introduces and clarifies exemptions for:
    • Religious facilities and clergy housing (with specifics for Charlestown and related conditions).
    • Intangible personal property used for religious or charitable purposes.
    • Educational institutions, schools, and related facilities with acreage limits.
    • Certain healthcare facilities, higher education institutions, and property leased to non-exempt tenants.
    • Urban farming-related property (see below under Subsection 52 and 95).
    • Various nonprofit organizations located in multiple Rhode Island towns (a lengthy, enumerated list).
    • Renewable energy resources used in residential systems and by manufacturers.
    • Adds: authority for municipalities to exempt tangible personal property for economic development purposes, subject to local ordinances and § 44-5-12.2 compliance.

  • For-profit hospital and stabilization provisions (44-3-3(b))

    • Clarifies how for-profit hospital property is valued for taxation, including initial valuations for new for-profit facilities and potential stabilization agreements. In the year of conversion or establishment, the levy related to the facility may be treated differently for purposes of the state levy cap.

  • Exemption for tangible personal property (broad city/town exemptions)

    • Allows municipalities to set local exemptions for tangible personal property to aid business growth, with uniform application and compliance requirements.

  • Net income definition for corporate tax (44-11-11)

    • Expands “net income” to include:
    • Certain forgiven Paycheck Protection Program (PPP) loan amounts, subject to thresholds.
    • Federal items such as interest, specific exemptions, and federal tax considerations.
    • Net operating loss deduction rules aligned with federal law but with Rhode Island-specific carry-forward limitations (5 years after 2020 start; expanding to 20 years after 2025 for certain uses).
    • Special treatment for domestic international sales corporations (DISCs) and foreign sales corporations (FSCs) consistent with federal law as of specified dates.
    • Income from the production of food by urban and small farmers.
    • Establishes rules around emergency rules to preserve Rhode Island tax base in response to federal changes (One Big Beautiful Bill Act or similar).

  • Sales and use tax exemptions (44-18-30)

    • Retains and reinforces exemptions for:
    • Newspapers, school meals, certain containers, charitable/educational/religious organizations (including hospitals and educational institutions not operated for profit).
    • Medical drugs, durable medical equipment, prosthetic devices, burial goods, food and food ingredients (with detailed exclusions for candy, soda, etc.).
    • Motor vehicles sold to nonresidents under specific conditions.
    • Educational institution housing for students and staff.
    • Certain energy-related equipment and manufacturing machinery used in manufacturing processes.
    • Includes provisions for special exemptions related to hospitals, educational institutions, and certain nonprofit organizations, reflecting a wide range of exemptions for public and charitable purposes.

  • Urban farming and small farmers exemptions (new in 44-11-11 and 44-3-3 subsections)

    • Defines “urban farmland” and “urban farmer” with explicit criteria (urban area threshold, Schedule F reporting, and active agricultural use).
    • Provides a land use change tax schedule for when land reverts from urban farmland to other uses, with tiered percentages (ranging from 10% to 1% over 15 years, then none thereafter).
    • Similar provisions apply to “small farmers” and “small farmland” with parallel definitions and tax consequences.

Who would be affected

  • Local governments (cities and towns) due to expanded and clarified exemption authority and potential changes in property tax revenues.
  • Taxpayers that own property currently exempt or newly eligible for exemptions (numerous nonprofit, religious, educational, healthcare, cultural organizations listed in the bill).
  • For-profit hospital facilities and those converting from nonprofit status, due to valuation rules and stabilization considerations.
  • Businesses and manufacturers through expanded or clarified sales/use tax exemptions (energy-related equipment, manufacturing machinery, open space/conservation properties).
  • Urban and small farmers and related urban farmland properties, including possible land use change taxes if farm status ends.
  • Corporations with DISCs/FSC status and those claiming federal-related deductions, as net income calculations for Rhode Island corporate tax would align with federal rules.

Procedural and timeline aspects

  • Referred to as of March 4, 2026, to Senate Finance.
  • Provisions include dates tied to federal programs (PPP forgiveness applicable for 2020 onward; carry-forward periods starting at specified years).
  • Certain exemptions and tax treatment would require municipal action (formal action by councils) and may require compliance with existing Rhode Island statutory sections (e.g., 44-5-12.2).
  • Emergency rulemaking implications referenced for certain federal tax changes, to preserve Rhode Island’s tax base.

This summary focuses on substantive changes and typical effects, offering a concise guide to what SB 2827 would change or add in Rhode Island tax law.

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

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