280-RICR-20-35-1. Computation of Estate Tax (version Adoption, 01/01/2010 to 07/10/2018)

State of Rhode Island-Division of Taxation Computation of Estate Tax Regulation EST 09-01 Table of Contents RULE 1 PURPOSE RULE 2 AUTHORITY RULE 3 APPLICATION RULE 4 SEVERABILITY RULE 5 GENERAL RULE 6 EFFECTIVE DATE RULE 1 PURPOSE This regulation implements Chapter 44-22 and 44-23 of the Rhode Island General Laws. These chapters provide for Estate and Transfer Taxes Liability and Computation, and Estate and Transfer Taxes Enforcement and Collection, in regards to the calculation of the estate tax. RULE 2 AUTHORITY This regulation is promulgated pursuant to RIGL Chapter 44-22 and 44-23, as amended. These rules have been prepared in accordance with the requirements of Chapter 44-1-4 and 44-23-45. RULE 3 APPLICATION The terms and provisions of these rules and regulations shall be liberally construed to permit the Division of Taxation to effectuate the purposes of RIGL Chapter 44-22 and 44-23 and other applicable state laws and regulations. RULE 4 SEVERABILITY If any provision of this regulation, or the application thereof to any person or circumstances, is held invalid by a court of competent jurisdiction, the validity of the remainder of this regulation shall not be affected thereby. RULE 5 GENERAL The Rhode Island estate tax is imposed upon the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to transfer. For decedents whose death occurs on or after January 1, 2002, but prior to January 1, 2010, the tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. §2011 as it was in effect as of January 1, 2001. Any scheduled increase in the unified credit provided in 26 U.S.C. §2010 in effect on January 1, 2001, or thereafter, shall not apply. The tax shall only be imposed if the net taxable estate shall exceed six hundred seventy-five thousand dollars ($675,000). Exempting net taxable estates of six hundred seventy-five thousand or less requires a unified credit of two hundred twenty thousand five hundred fifty dollars ($220,550). See EXHIBIT “A” line 3. The Rhode Island estate tax may be ascertained by completing the computation schedule on EXHIBIT “A”. Examples: 1. A net taxable estate of $750,000 would yield a RI estate tax of $20,400. 2. A net taxable estate of $851,000 would yield a RI estate tax of $25,248. 3. A net taxable estate of $1,000,000 would yield a RI estate tax of $33,200. For decedents whose death occurs on or after January 1, 2010, the tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. §2011 as it was in effect as of January 1, 2001. Any scheduled increase in the unified credit provided in 26 U.S.C. §2010 in effect on January 1, 2003, or thereafter, shall not apply. The tax shall only be imposed if the net taxable estate shall exceed eight hundred fifty thousand dollars ($850,000). Exempting net taxable estates of eight hundred fifty thousand or less requires a unified credit of two hundred eighty-seven thousand three hundred dollars ($287,300). See EXHIBIT “B” line 3. The Rhode Island estate tax can be ascertained by completing the computation schedule on EXHIBIT “B”. Examples: 1. A net taxable estate of $750,000 would yield a RI estate tax of $ 0. 2. A net taxable estate of $851,000 would yield a RI estate tax of $390. 3. A net taxable estate of $1,000,000 would yield a RI estate tax of $33,200. Beginning on January 1, 2011 and each January 1 thereafter, said eight hundred fifty thousand dollars ($850,000) shall be adjusted by the percentage of increase in the Consumer Price Index for all Urban Consumers as of September 30 of the prior calendar year compounded annually and rounded up to the nearest five dollar ($5.00) increment. Exempting net taxable estates from the annually revised amount will require an annual adjustment to the unified credit (line 3 of the computation schedule). The revised taxable threshold and unified credit amounts will be published annually on the tax division website www.tax.ri.gov along with a revised computation schedule. RULE 6 EFFECTIVE DATE: This Regulation shall take effect as of January 1, 2010. DAVID M. SULLIVAN TAX ADMINISTRATOR EXHIBIT "A" Rhode Island Tax Computation Schedule Table A Table B Column A Column B Column C Column D (1) (2) (3) (4) Rate of tax on Rate of credit Taxable Taxable Tax on excess over Adjusted taxable on excess amount amount amount in amount in estate equal to Adjusted taxable Credit on amount over amount over not over column A column A or more than estate less than in column 1 in column 1 (Percent) (Percent) 0 $10,000 0 18 0 $40,000 0 None 10,000 20,000 $1,800 20 40,000 90,000 0 0.8 20,000 40,000 3,800 22 90,000 140,000 $400 1.6 40,000 60,000 8,200 24 140,000 240,000 1,200 2.4 60,000 80,000 13,000 26 240,000 440,000 3,600 3.2 80,000 100,000 18,200 28 440,000 640,000 10,000 4.0 100,000 150,000 23,800 30 640,000 840,000 18,000 4.8 150,000 250,000 38,800 32 840,000 1,040,000 27,600 5.6 250,000 500,000 70,800 34 1,040,000 1,540,000 38,800 6.4 500,000 750,000 155,800 37 1,540,000 2,040,000 70,800 7.2 750,000 1,000,000 248,300 39 2,040,000 2,540,000 106,800 8.0 1,000,000 1,250,000 345,800 41 2,540,000 3,040,000 146,800 8.8 1,250,000 1,500,000 448,300 43 3,040,000 3,540,000 190,800 9.6 1,500,000 2,000,000 555,800 45 3,540,000 4,040,000 238,800 10.4 2,000,000 2,500,000 780,800 49 4,040,000 5,040,000 290,800 11.2 2,500,000 3,000,000 1,025,800 53 5,040,000 6,040,000 402,800 12.0 3,000,000 1,290,800 55 6,040,000 7,040,000 522,800 12.8 7,040,000 8,040,000 650,800 13.6 8,040,000 9,040,000 786,800 14.4 9,040,000 10,040,000 930,800 15.2 10,040,000 1,082,800 16.0 Computation of Tax 1. Net taxable estate (page 1, part 2, line 3)…………………………………………………………………………………………… 1. 2. Tax on amount on line 1 - use table A……………………………………………………………………………………………… 2. 3. Less unified credit……………………………………………………………………………………………………………………… 3. 220,550 00 4. Subtract line 3 from line 2…………………………………………………………………………………………………………… 4. 5. Net taxable estate (page 1, part 2, line 3)……………………………………………………… 5. 6. Less…………………………………………………………………………………………………… 6. 60,000 00 7. Subtract line 6 from line 5……………………………………………………………………….. 7. 8. Credit for state death taxes on amount on line 7 - compute using table B……………………………………………………… 8. 9. Rhode Island Tax - the smaller of line 4 or line 8……………………………………………………………………………….. 9. EXHIBIT "B" Rhode Island Tax Computation Schedule Table A Table B Column A Column B Column C Column D (1) (2) (3) (4) Rate of tax on Rate of credit Taxable Taxable Tax on excess over Adjusted taxable on excess amount amount amount in amount in estate equal to Adjusted taxable Credit on amount over amount over not over column A column A or more than estate less than in column 1 in column 1 (Percent) (Percent) 0 $10,000 0 18 0 $40,000 0 None 10,000 20,000 $1,800 20 40,000 90,000 0 0.8 20,000 40,000 3,800 22 90,000 140,000 $400 1.6 40,000 60,000 8,200 24 140,000 240,000 1,200 2.4 60,000 80,000 13,000 26 240,000 440,000 3,600 3.2 80,000 100,000 18,200 28 440,000 640,000 10,000 4.0 100,000 150,000 23,800 30 640,000 840,000 18,000 4.8 150,000 250,000 38,800 32 840,000 1,040,000 27,600 5.6 250,000 500,000 70,800 34 1,040,000 1,540,000 38,800 6.4 500,000 750,000 155,800 37 1,540,000 2,040,000 70,800 7.2 750,000 1,000,000 248,300 39 2,040,000 2,540,000 106,800 8.0 1,000,000 1,250,000 345,800 41 2,540,000 3,040,000 146,800 8.8 1,250,000 1,500,000 448,300 43 3,040,000 3,540,000 190,800 9.6 1,500,000 2,000,000 555,800 45 3,540,000 4,040,000 238,800 10.4 2,000,000 2,500,000 780,800 49 4,040,000 5,040,000 290,800 11.2 2,500,000 3,000,000 1,025,800 53 5,040,000 6,040,000 402,800 12.0 3,000,000 1,290,800 55 6,040,000 7,040,000 522,800 12.8 7,040,000 8,040,000 650,800 13.6 8,040,000 9,040,000 786,800 14.4 9,040,000 10,040,000 930,800 15.2 10,040,000 1,082,800 16.0 Computation of Tax 1. Net taxable estate (page 1, part 2, line 3)…………………………………………………………………………………………… 1. 2. Tax on amount on line 1 - use table A……………………………………………………………………………………………… 2. 3. Less unified credit……………………………………………………………………………………………………………………… 3. 287,300 00 4. Subtract line 3 from line 2…………………………………………………………………………………………………………… 4. 5. Net taxable estate (page 1, part 2, line 3)……………………………………………………… 5. 6. Less…………………………………………………………………………………………………… 6. 60,000 00 7. Subtract line 6 from line 5……………………………………………………………………….. 7. 8. Credit for state death taxes on amount on line 7 - compute using table B……………………………………………………… 8. 9. Rhode Island Tax - the smaller of line 4 or line 8……………………………………………………………………………….. 9.