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Bill > H5473
RI H5473
RI H5473Creates an additional tax rate of 3% on taxable income over $625,000 in 2025 dollars. Applies to tax years 2026 and thereafter and not retroactively.
summary
Introduced
02/12/2025
02/12/2025
In Committee
02/12/2025
02/12/2025
Crossed Over
Passed
Dead
06/20/2025
06/20/2025
Introduced Session
2025 Regular Session
Bill Summary
This act would add create an additional Rhode Island personal income tax of three percent (3.00%) on taxable income over approximately six-hundred and twenty-five thousand dollars ($625,000) in 2025 dollars, impacting only the top one percent (1%) in income of personal income tax filers. The existing three-bracket personal income tax structure will remain in place. In order for the new bracket to apply to income over approximately six-hundred and twenty-five thousand dollars ($625,000) in 2025 dollars, the statute (which is written in 2011 dollars) uses the pre-inflation amount of four-hundred and thirty thousand ($430,000) in 2011 dollars. Each year, Rhode Island’s Division of Taxation applies inflation rates to calculate the cut- offs for all income tax brackets in current year dollars. This act would not apply retroactively to prior tax years or to taxable income from prior tax years. This act would take effect on January 1, 2026.
AI Summary
This bill creates an additional 3% tax rate on Rhode Island taxable income over $625,000 (in 2025 dollars) for tax years beginning in 2026 and thereafter. The new tax rate will apply only to individuals with taxable income above the specified threshold, which is estimated to impact approximately the top 1% of income tax filers. The bill preserves the existing three-bracket personal income tax structure and uses a base amount of $430,000 from 2011, which will be adjusted annually for inflation by the Rhode Island Division of Taxation. The original tax brackets will continue to apply, with this new 3% rate added as an additional layer of taxation for high-income earners. The bill explicitly states that it will not apply retroactively to prior tax years, and it is scheduled to take effect on January 1, 2026. The purpose of this tax is likely to generate additional revenue from high-income taxpayers while maintaining the overall progressive structure of Rhode Island's income tax system.
Committee Categories
Budget and Finance
Sponsors (10)
Karen Alzate (D)*,
Jose Batista (D),
Julie Casimiro (D),
Robert Craven (D),
Susan Donovan (D),
Katie Kazarian (D),
Rebecca Kislak (D),
David Morales (D),
Brandon Potter (D),
Jennifer Stewart (D),
Last Action
Committee recommended measure be held for further study (on 05/06/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://status.rilegislature.gov/ |
| BillText | https://webserver.rilegislature.gov/BillText25/HouseText25/H5473.pdf |
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