The proposed bill establishes a new chapter, CHAPTER 72, titled "WEALTH TAX," within Title 44 of the General Laws of Rhode Island, which introduces a wealth tax on residents starting January 1, 2026. This tax will be levied at a rate of one percent (1%) on individuals' taxable worldwide wealth as of December 31 of the tax year. The bill includes definitions for key terms related to the wealth tax and outlines specific provisions for individuals who pass away during the tax year, detailing how their taxable wealth will be assessed. It clarifies that the wealth tax does not apply to individuals solely based on their status as trustees of a trust unless they are also beneficiaries or hold a general power of appointment over the trust's assets.

Additionally, the bill amends existing tax laws to include exemptions for certain obligations and evidences of debt, as well as provisions for tax credits for similar taxes paid to other states. It introduces a process for "innocent spouse relief," allowing individuals who filed jointly to seek relief from joint tax liabilities under specific conditions. The bill also establishes penalties for substantial understatements in wealth tax valuations and mandates electronic filing for tax returns. Overall, the legislation aims to create a comprehensive framework for the wealth tax, enhance revenue sources for the state, and provide clarity and relief mechanisms for taxpayers.