How Your Taxes Will Be Affected By New State Budget
Saturday, June 05, 2010
The Rhode Island House and Senate overhauled state income taxes yesterday, cutting the top rate from 9.9 percent to just under 6 percent, a move that lawmakers and taxpayer advocates say will make the state a friendly place to do business.
The House and Senate bills got rid of the top four tax brackets—which were 7.75 percent, 7.75 percent, 9 percent, and 9.9 percent. The new rates are 4.75 and 6 percent. The lowest rate—3.75 percent was unchanged. In addition, the bills raise the standard deduction for single adults from $5,700 to $7,500, and, for married couples filing jointly, from $9,550 to $15,000.
The changes would go into effect next January.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“This is a plan that makes us more competitive with other states, one that will help us shed our reputation of being a high-tax state,” said Senate Finance Chairman Daniel Da Ponte (D-Dist. 14, East Providence, Pawtucket). “It will lower taxes middle-class taxpayers and business owners across the state, as well as sending a message to out-of-state entrepreneurs that Rhode Island welcomes them.”
The national Tax Foundation has said the reform would improve the business climate in Rhode Island, bringing it up from a ranking as the 44th to 41st worst in the country.
