Bill > H7595

This bill, titled the "Wealth Tax," proposes to establish a new chapter in Rhode Island's tax laws to impose a one percent (1%) tax on the worldwide wealth of Rhode Island residents, which includes both individuals and entities. This tax will be applied to a resident's "taxable worldwide wealth," defined as the fair market value of all intangible assets (such as cash, investments, stocks, bonds, and intellectual property) owned or controlled by the resident, with certain exemptions. The tax will be assessed annually based on wealth as of December 31st of the preceding year, with specific provisions for individuals who die during the tax year. The bill outlines extensive definitions for terms like "artificial person" (which includes corporations and partnerships), "cash and cash equivalents," "financial intangible assets," and "worldwide wealth," and clarifies who is considered a "Rhode Island resident" for tax purposes. It also establishes filing deadlines, payment methods, and penalties for non-compliance, including a substantial understatement penalty for significant valuation errors. Notably, the bill provides an exemption of up to $25 million in financial intangible assets, exempts nonfinancial intangible assets, and offers credits for similar wealth taxes paid to other states. The act also includes provisions for "innocent spouse relief" for those filing jointly and a rule of construction that favors the application of the tax in cases of ambiguity, with a severability clause to ensure that if one part of the law is found invalid, the rest remains in effect. This act is set to take effect upon its passage.