The bill amends Section 44-22-1.1 of the General Laws in Chapter 44-22, which is related to estate and transfer taxes, specifically the tax on the net estate of a decedent. The amendment introduces a new subsection (5) that applies to decedents whose death occurs on or after January 1, 2025. For these decedents, an estate tax is imposed only if the net taxable estate exceeds four million dollars ($4,000,000). The tax amount is equal to the maximum credit for state death taxes allowed by 26 U.S.C. § 2011 as it was in effect on January 1, 2001. Additionally, a Rhode Island credit is allowed against any tax determined, and beginning January 1, 2026, and each January 1 thereafter, the Rhode Island credit amount will be adjusted based on the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Statistics, with the adjustment being compounded annually and rounded up to the nearest five dollar increment.

The bill also specifies that for decedents whose death occurs on or after January 1, 2002, the terms "gross taxable estate," "federal gross estate," or "net taxable estate" have the same meaning as in the laws of the United States, specifically referencing the Internal Revenue Code of 1954 as it was in effect on January 1, 2001, unless otherwise provided. The bill clarifies the tax situs of property within the state of Rhode Island and states that all values are as finally determined for federal estate tax purposes. The act would take effect upon passage, and its purpose is to increase the net taxable estate exemption to four million dollars ($4,000,000) for deaths occurring on or after January 1, 2025.

Statutes affected:
7487: 44-22-1.1