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Lahti, Lahti & O'Neill, P.C. Blog

Tuesday, April 4, 2017

Elimination of Rhode Island Estate Tax Proposed

By Michael T. Lahti

As reported in Tax Notes, a series of bills proposed by Rhode Island Rep. Robert A. Nardolillo III (R) would reduce the state sales tax rate, repeal the estate tax, and eliminate the tangible personal property tax — all by July 1, 2017.  The first bill (H. 6005), filed March 24, would cut the state’s current 7 percent sales tax rate to 3 percent. The second bill (H. 6029), filed March 30, would eliminate Rhode Island’s estate and transfer taxes. The third bill, which Nardolillo has yet to formally introduce, would repeal the tangible personal property tax.

If passed, the first two bills would take effect July 1, the first day of Rhode Island’s new fiscal year.  Together, the three bills are called the “Taking Care of Business” legislative package, because the proposed reduction and elimination of these “oppressive taxes” would provide relief to businesses and help make Rhode Island economically competitive once again, according to a March 30 release by Nardolillo’s office.  “Rhode Island residents are sick of seeing our state’s economy in a slump,” Nardolillo said in a statement. “We must empower the next generation with a strong, growing economy and the only way to do that is to take care of business.” Cutting the sales tax rate will “boost sales across all industries, encourage business growth and save money for customers,” and repealing the estate tax would keep retirees in the state, he said.

Rhode Island is one of 14 states nationwide with an estate tax. The estate tax threshold for 2017 is $1.515 million for decedents dying on or after January 1, up from $1.5 million in 2016. 

The three bills could cost the state about $772 million, according to state estimates reported by The Providence Journal. The two bills — H. 6005 and H. 6029 — have been referred to the House Finance Committee. The third bill, to eliminate tangible personal property taxes, should be online later this week, Nardolillo’s office said.

 


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