The bill introduces CHAPTER 72 to Title 44 of the General Laws, establishing a new tax on gains from the sale or exchange of real property in Rhode Island. This tax is supplementary to existing taxes and applies to properties held for six years or less. The legislation outlines specific exclusions from the tax, including:

1. Properties sold by nonprofit development corporations or nonprofit local development corporations qualifying under Section 501(c)(3) of the Internal Revenue Code.
2. Properties purchased by the State of Rhode Island from organizations qualifying under Section 501(c)(3) of the Internal Revenue Code.
3. Properties conveyed pursuant to a court judgment related to the disposition of real estate between parties to a marriage.
4. Farmland and open-space properties sold to qualifying organizations under Section 501(c)(3) of the Internal Revenue Code, provided they are held for agricultural, forestry, or open-space purposes for at least six years.
5. Agricultural land transferred by a farmer to a family member, provided the land is used as agricultural land for a total of six years.
6. Conservation and preservation rights transferred to a qualified holder.
7. Properties sold to organizations qualifying under Section 501(c)(3) of the Internal Revenue Code for affordable housing, contingent on being held for at least six years.
8. Properties sold by the United States, the State of Rhode Island, or any of its instrumentalities or subdivisions, provided the sale is exempt from federal income taxation.

The bill establishes tax rates based on the duration of property ownership, with the transferor responsible for tax payment. Buyers of properties held for less than six years are required to withhold ten percent of the consideration paid to the seller, which must be remitted to the tax administrator. Sellers must file a return within thirty days of the sale, detailing the tax due and the amount withheld.

The legislation defines lease-purchase agreements as installment sales, requiring tax obligations to be met within thirty days of each installment payment. Sellers may elect to file tax returns as part of their Rhode Island income tax return for subsequent installments, with provisions to prevent interest from accruing on withholding if annual returns are elected.

The bill establishes penalties for willful tax evasion, including imprisonment for up to two years and fines up to ten thousand dollars or five times the amount of tax evaded, whichever is greater. Tax payment forms must clearly state these penalties. Additionally, a reduced tax rate is available for sales to qualifying 501(c)(3) organizations aimed at providing affordable housing, contingent on the property being held for at least six years. The act is set to take effect upon passage.