The proposed bill introduces a new chapter, CHAPTER 73, titled "Wealth Proceeds Tax," to Title 44 of the General Laws concerning taxation. This chapter establishes a tax of four percent (4%) on the lesser of an individual's, estate's, or trust's wealth proceeds for the taxable year or their federal modified adjusted gross income, minus a defined threshold amount. The bill provides specific definitions related to federal tax codes, including "wealth proceeds," which encompasses various forms of net investment income, and outlines how the tax will be calculated for both residents and non-residents of Rhode Island.

The act specifies that the tax will be applicable starting January 1, 2027, and will not be retroactively enforced. It aims to target high-income households, estates, and trusts, aligning with federal guidelines on net investment income. Additionally, the bill includes provisions for calculating the tax for non-residents and estates or trusts, ensuring that the tax liability is proportionate to the wealth proceeds allocated to Rhode Island. All references to the Internal Revenue Code in this section will refer to the code in effect as of January 1, 2026.