The proposed bill establishes a new chapter, CHAPTER 73, titled "WEALTH TAX," within Title 44 of the General Laws of Rhode Island, introducing a wealth tax that will take effect on January 1, 2027. This tax will be levied at a rate of one percent (1%) on the taxable worldwide wealth of Rhode Island residents, which encompasses the total fair market value of all intangible assets owned or controlled by the resident, with certain exemptions.

The bill outlines definitions for key terms related to the tax, including "financial intangible assets," "nonfinancial intangible assets," and "Rhode Island resident." It sets forth the filing requirements, which mandate that each resident owing tax under this chapter must file a return by April 15th each year, reporting their taxable worldwide wealth for the preceding calendar year. The legislation provides for joint filing by spouses and state registered domestic partners, with provisions allowing for separate returns under certain circumstances.

Exemptions from the tax include up to $25 million of a taxpayer's financial intangible assets, nonfinancial intangible assets, and certain U.S. government obligations. The bill also includes a credit for similar wealth tax paid to another state, subject to specific conditions.

Additionally, the legislation includes provisions for penalties for late filing and substantial understatements of wealth tax valuation, as well as "innocent spouse relief" for individuals seeking to mitigate joint liability. The burden of proof for tax deficiencies is placed on individuals, and the department is required to initiate audits of a percentage of registered taxpayers starting in 2027, increasing in subsequent years.

The bill emphasizes compliance and equitable contributions from wealth holders, and it includes a severability clause to ensure that if any provision is held invalid, the remainder of the chapter remains effective.