The bill introduces a new tax on gains from the sale or exchange of real property in Rhode Island, creating Chapter 72 in Title 44 of the General Laws. This tax is in addition to existing taxes and applies to properties held for six years or less, with specific exclusions for nonprofit organizations, property conveyed in divorce judgments, farmland and open-space property for conservation, affordable housing, government sales, agricultural land within a family, and transfers of conservation rights. The tax rate varies from 60% to 5% based on the holding period and the gain relative to the property's basis. The bill also defines the sale or exchange of property, including the transfer of options and contracts for sale, and outlines the calculation of the basis and the amount realized from the sale or exchange. The transferor is generally liable for the tax, but liability can shift to the transferee under certain conditions, such as providing false certifications.

The bill mandates that buyers withhold 10% of the consideration for sellers who have held the property for less than six years and requires sellers to file a return and either pay the tax due or claim a refund within 30 days of the sale. Installment sales are also covered, with tax due within 30 days of each payment. The bill includes administrative details, enforcement provisions, and criminal penalties for willful tax evasion. An exception is provided for sales to qualifying affordable housing organizations, with only half the tax due if the property is held for the required period. The bill would take effect upon passage, setting up the legal framework for this new taxation system on short-term real property gains.