Increase the estate exemption to $5,000,000 for January 1, 2027, $7,500,000 for January 1, 2029, $10,000,000 for January 1, 2031. This act would eliminate the estate tax for decedents whose death occurs on or after January 1, 2033.

Rhode Island Estate Tax Phase-Out Bill

This bill would gradually raise the amount of money a person can leave to their heirs without owing Rhode Island estate taxes, and would eventually eliminate the state estate tax entirely. Currently, Rhode Island taxes estates (the total value of what someone owns when they die) above a certain threshold. Under this proposal, that threshold would increase in steps: to $5 million starting in 2027, to $7.5 million in 2029, and to $10 million in 2031. Then, for anyone who dies on or after January 1, 2033, there would be no Rhode Island estate tax at all.

This bill primarily affects people who have accumulated significant wealth over their lifetimes — including property, savings, investments, and business assets. Under current Rhode Island law, estates valued above roughly $1.7 million are subject to the tax. This change would mean that only the wealthiest estates would owe any state estate tax in the near term, and eventually no estates would be taxed at the state level, regardless of their size.

The bill would also have an impact on Rhode Island's state government budget, since estate tax revenue currently contributes to the state's general fund. Eliminating the tax over time would reduce that revenue stream, though the exact financial impact would depend on how many taxable estates exist in any given year. The bill has been introduced and referred to the House Finance Committee, where it will be reviewed before any further action is taken.