This bill amends the General Laws in Chapter 44-30, which pertains to Personal Income Tax in Rhode Island, by updating the definition of "Rhode Island taxable income" and adjusting the tax rates for various income levels and filing statuses. It excludes the increase in the basic standard deduction for married couples filing jointly as provided by federal tax acts from 2001 and 2003. The bill sets Rhode Island personal income tax rates as a percentage of federal income tax rates prior to these acts, with specific rates for tax years 2001 and 2002, and includes adjustments for inflation starting in the tax year 2002. It also outlines the Rhode Island alternative minimum tax, computed by multiplying the federal tentative minimum tax by a specified percentage, and provides for inflation adjustments for exemption amounts, determination of Rhode Island taxable income, and maximum capital gains rates.

The bill details tax rules regarding standard deductions, itemized deductions, exemption amounts, and the alternative minimum tax, with provisions for inflation adjustments and phase-outs. It caps the standard deduction for individuals and sets it to zero for certain taxpayers, while outlining phase-outs for itemized deductions and exemption amounts for high-income taxpayers. The bill specifies various federal credits that are applicable against Rhode Island state tax, but excludes any federal credits enacted after January 1, 1996. It also introduces a new provision for investment tax credits for Sub-S corporation shareholders and limited liability company members in manufacturing, based on wage criteria and NAICS codes, retroactive to the tax year 2022. The bill mandates that the tax administrator recalculate and submit revisions every three years, and it defines the tax rates, standard deductions, and exemption amounts with adjustments for inflation. The bill is set to take effect upon passage and applies retroactively from January 1, 2022.

Statutes affected:
7929: 44-30-2.6