The bill establishes a new chapter, CHAPTER 72, titled "WEALTH TAX," within Title 44 of the General Laws of Rhode Island, introducing a wealth tax that will take effect on January 1, 2026. This tax will be levied at a rate of one percent (1%) on the taxable worldwide wealth of Rhode Island residents as of December 31 of the tax year. The legislation defines key terms such as "taxable worldwide wealth," "Rhode Island resident," and "intangible assets," while also providing exemptions for up to $25 million of financial intangible assets and nonfinancial intangible assets.

Residents will be required to file tax returns by April 15 each year, reporting their taxable worldwide wealth from the previous calendar year, with provisions for joint filing for spouses and state registered domestic partners. The bill includes penalties for late submissions, with a five percent (5%) penalty for each month a return is unfiled, capped at twenty-five percent (25%) of the tax due.

Additionally, the bill outlines specific provisions for tax relief, including the burden of proof for deficiencies between spouses or domestic partners and restrictions on seeking relief for taxes on wealth derived from "disqualified assets." It introduces penalties for substantial understatements in wealth tax valuations, with a penalty of fifty percent (50%) for gross wealth tax valuation misstatements and thirty percent (30%) for other substantial understatements. The department is mandated to initiate audits for at least ten percent (10%) of registered taxpayers in 2026, increasing to fifteen percent (15%) in 2027 and twenty percent (20%) by 2028.

The legislation also includes a severability clause, ensuring that if any provision of this chapter or its application is held invalid, the remainder of the chapter remains effective. Overall, the bill aims to create a comprehensive framework for the assessment and collection of a wealth tax in Rhode Island.