The bill establishes a new chapter, CHAPTER 73, in Title 44 of the General Laws, which introduces a tax on gains from the sale or exchange of real property in Rhode Island. This tax is supplementary to existing taxes and includes specific exclusions, such as properties sold by nonprofit organizations qualifying under Section 501(c)(3) of the Internal Revenue Code, properties purchased by the state from these organizations, properties conveyed pursuant to court judgments related to marriage, farmland and open-space properties sold to qualifying organizations, agricultural land transferred within families under certain conditions, and conservation rights and interests transferred to qualified holders.

The tax rates are based on the duration of property ownership, with higher rates applied to properties held for shorter periods. The transferor is primarily responsible for tax payment, but liability can shift to the transferee if a certification regarding the use of the property is found to be untrue. 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. The seller must file a return within thirty days of the sale, detailing the tax due and the amount withheld.

The bill defines installment sales and stipulates that tax on such sales is due within thirty days of each installment payment. Sellers may report subsequent installments on their Rhode Island income tax return, with the total tax calculated based on the full purchase price. The legislation includes penalties for willful tax evasion, which may involve imprisonment and fines. Additionally, a reduced tax rate is provided for sales to qualifying 501(c)(3) organizations intending to use the property for affordable housing, contingent on the property being held for at least six years. The act will take effect upon passage.