Bill > S2549

This bill establishes a new tax on profits, or "gains," made from selling or exchanging real estate held for six years or less in Rhode Island, with the tax rate varying based on how much profit was made and how long the property was owned. The bill outlines various exclusions from this tax, such as sales by certain non-profit organizations, government entities, or for specific purposes like preserving farmland or developing affordable housing, provided the property is held for at least six years for those purposes. It also details how to calculate the "basis" (original cost) and "gain" from a sale, generally following federal tax rules, but with specific provisions for certain situations like foreclosures or property inherited from a decedent. The bill introduces a withholding requirement where buyers must hold back a portion of the payment for properties sold within six years, and it allows for installment sales to be taxed over time. Importantly, it includes criminal penalties, such as imprisonment or significant fines, for anyone who intentionally avoids or evades this new tax.

Budget and Finance

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