The proposed bill establishes a new chapter, CHAPTER 73, titled "WEALTH TAX," within Title 44 of the General Laws of Rhode Island. It introduces a wealth tax for residents starting January 1, 2027, with payments due in 2028. The tax will be levied at a rate of one percent (1%) on a resident's taxable worldwide wealth, which is defined as the fair market value of all intangible assets owned or controlled by the resident, excluding certain exempt properties.

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

Exemptions from the tax are provided for up to $25 million of a taxpayer's financial intangible assets, nonfinancial intangible assets, and certain government obligations. The bill also includes provisions for "innocent spouse relief," allowing individuals to petition for relief from joint and several liability for tax assessments under specific criteria.

Additionally, the bill addresses tax deficiencies by requiring individuals to demonstrate the portion of any deficiency attributable to themselves versus their spouse or partner, while excluding relief for taxes on wealth derived from "disqualified assets." It establishes penalties for substantial understatements of wealth tax valuations, with specific thresholds for gross wealth tax valuation misstatements and substantial wealth tax valuation understatements.

The legislation mandates audits of a percentage of registered taxpayers, starting at ten percent (10%) in 2027 and increasing to fifteen percent (15%) in 2028, and twenty percent (20%) in 2029 and thereafter. The bill includes a severability clause to ensure that if any provision is found invalid, the remainder of the chapter remains enforceable. The act is set to take effect upon passage.