2021 -- H 5227
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LC000920
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2021
____________
AN ACT
RELATING TO TAXATION -- PERSONAL INCOME TAX
Introduced By: Representatives Alzate, Amore, Blazejewski, Williams, Speakman,
Giraldo, Slater, Kazarian, Potter, and Diaz
Date Introduced: January 29, 2021
Referred To: House Finance
It is enacted by the General Assembly as follows:
1 SECTION 1. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal
2 Income Tax" is hereby amended to read as follows:
3 44-30-2.6. Rhode Island taxable income -- Rate of tax.
4 (a) "Rhode Island taxable income" means federal taxable income as determined under the
5 Internal Revenue Code, 26 U.S.C. § 1 et seq., not including the increase in the basic, standard-
6 deduction amount for married couples filing joint returns as provided in the Jobs and Growth Tax
7 Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief Reconciliation Act of
8 2001 (EGTRRA), and as modified by the modifications in § 44-30-12.
9 (b) Notwithstanding the provisions of §§ 44-30-1 and 44-30-2, for tax years beginning on
10 or after January 1, 2001, a Rhode Island personal income tax is imposed upon the Rhode Island
11 taxable income of residents and nonresidents, including estates and trusts, at the rate of twenty-five
12 and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for tax year 2002
13 and thereafter of the federal income tax rates, including capital gains rates and any other special
14 rates for other types of income, except as provided in § 44-30-2.7, which were in effect immediately
15 prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA);
16 provided, rate schedules shall be adjusted for inflation by the tax administrator beginning in taxable
17 year 2002 and thereafter in the manner prescribed for adjustment by the commissioner of Internal
18 Revenue in 26 U.S.C. § 1(f). However, for tax years beginning on or after January 1, 2006, a
19 taxpayer may elect to use the alternative flat tax rate provided in § 44-30-2.10 to calculate his or
 1 her personal income tax liability.
2 (c) For tax years beginning on or after January 1, 2001, if a taxpayer has an alternative
3 minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode Island
4 alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by
5 multiplying the federal tentative minimum tax without allowing for the increased exemptions under
6 the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal form 6251
7 Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%) for tax year
8 2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing the product
9 to the Rhode Island tax as computed otherwise under this section. The excess shall be the taxpayer's
10 Rhode Island alternative minimum tax.
11 (1) For tax years beginning on or after January 1, 2005, and thereafter, the exemption
12 amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by
13 the tax administrator in the manner prescribed for adjustment by the commissioner of Internal
14 Revenue in 26 U.S.C. § 1(f).
15 (2) For the period January 1, 2007, through December 31, 2007, and thereafter, Rhode
16 Island taxable income shall be determined by deducting from federal adjusted gross income as
17 defined in 26 U.S.C. § 62 as modified by the modifications in § 44-30-12 the Rhode Island
18 itemized-deduction amount and the Rhode Island exemption amount as determined in this section.
19 (A) Tax imposed.
20 (1) There is hereby imposed on the taxable income of married individuals filing joint
21 returns and surviving spouses a tax determined in accordance with the following table:
22 If taxable income is: The tax is:
23 Not over $53,150 3.75% of taxable income
24 Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the excess over $53,150
25 Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the excess over $128,500
26 Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the excess over $195,850
27 Over $349,700 $26,333.75 plus 9.90% of the excess over $349,700
28 (2) There is hereby imposed on the taxable income of every head of household a tax
29 determined in accordance with the following table:
30 If taxable income is: The tax is:
31 Not over $42,650 3.75% of taxable income
32 Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the excess over $42,650
33 Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the excess over $110,100
34 Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the excess over $178,350
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 1 Over $349,700 $27,031.75 plus 9.90% of the excess over $349,700
2 (3) There is hereby imposed on the taxable income of unmarried individuals (other than
3 surviving spouses and heads of households) a tax determined in accordance with the following
4 table:
5 If taxable income is: The tax is:
6 Not over $31,850 3.75% of taxable income
7 Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the excess over $31,850
8 Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the excess over $77,100
9 Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the excess over $160,850
10 Over $349,700 $27,849.00 plus 9.90% of the excess over $349,700
11 (4) There is hereby imposed on the taxable income of married individuals filing separate
12 returns and bankruptcy estates a tax determined in accordance with the following table:
13 If taxable income is: The tax is:
14 Not over $26,575 3.75% of taxable income
15 Over $26,575 but not over $64,250 $996.56 plus 7.00% of the excess over $26,575
16 Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the excess over $64,250
17 Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the excess over $97,925
18 Over $174,850 $13,166.88 plus 9.90% of the excess over $174,850
19 (5) There is hereby imposed a taxable income of an estate or trust a tax determined in
20 accordance with the following table:
21 If taxable income is: The tax is:
22 Not over $2,150 3.75% of taxable income
23 Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess over $2,150
24 Over $5,000 but not over $7,650 $280.13 plus 7.75% of the excess over $5,000
25 Over $7,650 but not over $10,450 $485.50 plus 9.00% of the excess over $7,650
26 Over $10,450 $737.50 plus 9.90% of the excess over $10,450
27 (6) Adjustments for inflation.
28 The dollars amount contained in paragraph (A) shall be increased by an amount equal to:
29 (a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by;
30 (b) The cost-of-living adjustment determined under section (J) with a base year of 1993;
31 (c) The cost-of-living adjustment referred to in subparagraphs (a) and (b) used in making
32 adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall
33 be determined under section (J) by substituting "1994" for "1993."
34 (B) Maximum capital gains rates.
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 1 (1) In general.
2 If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax
3 imposed by this section for such taxable year shall not exceed the sum of:
4 (a) 2.5 % of the net capital gain as reported for federal income tax purposes under section
5 26 U.S.C. § 1(h)(1)(a) and 26 U.S.C. § 1(h)(1)(b).
6 (b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.
7 § 1(h)(1)(c).
8 (c) 6.25% of the net capital gain as reported for federal income tax purposes under 26
9 U.S.C. § 1(h)(1)(d).
10 (d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.
11 § 1(h)(1)(e).
12 (2) For tax years beginning on or after January 1, 2010, the tax imposed on net capital gain
13 shall be determined under subdivision 44-30-2.6(c)(2)(A).
14 (C) Itemized deductions.
15 (1) In general.
16 For the purposes of section (2), "itemized deductions" means the amount of federal
17 itemized deductions as modified by the modifications in § 44-30-12.
18 (2) Individuals who do not itemize their deductions.
19 In the case of an individual who does not elect to itemize his deductions for the taxable
20 year, they may elect to take a standard deduction.
21 (3) Basic standard deduction.
22 The Rhode Island standard deduction shall be allowed in accordance with the following
23 table:
24 Filing status Amount
25 Single $5,350
26 Married filing jointly or qualifying widow(er) $8,900
27 Married filing separately $4,450
28 Head of Household $7,850
29 (4) Additional standard deduction for the aged and blind.
30 An additional standard deduction shall be allowed for individuals age sixty-five (65) or
31 older or blind in the amount of $1,300 for individuals who are not married and $1,050 for
32 individuals who are married.
33 (5) Limitation on basic standard deduction in the case of certain dependents.
34 In the case of an individual to whom a deduction under section (E) is allowable to another
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 1 taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater of:
2 (a) $850;
3 (b) The sum of $300 and such individual's earned income;
4 (6) Certain individuals not eligible for standard deduction.
5 In the case of:
6 (a) A married individual filing a separate return where either spouse itemizes deductions;
7 (b) Nonresident alien individual;
8 (c) An estate or trust;
9 The standard deduction shall be zero.
10 (7) Adjustments for inflation.
11 Each dollar amount contained in paragraphs (3), (4) and (5) shall be increased by an amount
12 equal to:
13 (a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988, multiplied
14 by
15 (b) The cost-of-living adjustment determined under section (J) with a base year of 1988.
16 (D) Overall limitation on itemized deductions.
17 (1) General rule.
18 In the case of an individual whose adjusted gross income as modified by § 44-30-12
19 exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the
20 taxable year shall be reduced by the lesser of:
21 (a) Three percent (3%) of the excess of adjusted gross income as modified by § 44-30-12
22 over the applicable amount; or
23 (b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable for
24 such taxable year.
25 (2) Applicable amount.
26 (a) In general.
27 For purposes of this section, the term "applicable amount" means $156,400 ($78,200 in the
28 case of a separate return by a married individual)
29 (b) Adjustments for inflation.
30 Each dollar amount contained in paragraph (a) shall be increased by an amount equal to:
31 (i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by
32 (ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.
33 (3) Phase-out of Limitation.
34 (a) In general.
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 1 In the case of taxable year beginning after December 31, 2005, and before January 1, 2010,
2 the reduction under section (1) shall be equal to the applicable fraction of the amount which would
3 be the amount of such reduction.
4 (b) Applicable fraction.
5 For purposes of paragraph (a), the applicable fraction shall be determined in accordance
6 with the following table:
7 For taxable years beginning in calendar year The applicable fraction is
8 2006 and 2007 2/3
9 2008 and 2009 1/3
10 (E) Exemption amount.
11 (1) In general.
12 Except as otherwise provided in this subsection, the term "exemption amount" means
13 $3,400.
14 (2) Exemption amount disallowed in case of certain dependents.
15 In the case of an individual with respect to whom a deduction under this section is allowable
16 to another taxpayer for the same taxable year, the exemption amount applicable to such individual
17 for such individual's taxable year shall be zero.
18 (3) Adjustments for inflation.
19 The dollar amount contained in paragraph (1) shall be increased by an amount equal to:
20 (a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by
21 (b) The cost-of-living adjustment determined under section (J) with a base year of 1989.
22 (4) Limitation.
23 (a) In general.
24 In the case of any taxpayer whose adjusted gross income as modified for the taxable year
25 exceeds the threshold amount shall be reduced by the applicable percentage.
26 (b) Applicable percentage.
27 In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the
28 threshold amount, the exemption amount shall be reduced by two (2) percentage points for each
29 $2,500 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year
30 exceeds the threshold amount. In the case of a married individual filing a separate return, the
31 preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no event shall the
32 applicable percentage exceed one hundred percent (100%).
33 (c) Threshold Amount.
34 For the purposes of this paragraph, the term "threshold amount" shall be determined with
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 1 the following table:
2 Filing status Amount
3 Single $156,400
4 Married filing jointly of qualifying widow(er) $234,600
5 Married filing separately $117,300
6 Head of Household $195,500
7 (d) Adjustments for inflation.
8 Each dollar amount contained in paragraph (b) shall be increased by an amount equal to:
9 (i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by
10 (ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.
11 (5) Phase-out of limitation.
12 (a) In general.
13 In the case of taxable years beginning after December 31, 2005, and before January 1,
14 2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which
15 would be the amount of such reduction.
16 (b) Applicable fraction.
17 For the purposes of paragraph (a), the applicable fraction shall be determined in accordance
18 with the following table:
19 For taxable years beginning in calendar year The applicable fraction is
20 2006 and 2007 2/3
21 2008 and 2009 1/3
22 (F) Alternative minimum tax.
23 (1) General rule. There is hereby imposed (in addition to any other tax imposed by this
24 subtitle) a tax equal to the excess (if any) of:
25 (a) The tentative minimum tax for the taxable year, over
26 (b) The regular tax for the taxable year.
27 (2) The tentative minimum tax for the taxable year is the sum of:
28 (a) 6.5 perce