Creates an additional tax rate of 3% on taxable income over $640,000 in 2026 dollars. Applies to tax years 2027 and thereafter and not retroactively.

Rhode Island High-Income Surcharge Tax Bill

This bill would create an additional 3% tax on the portion of a person's income that exceeds $640,000 (measured in 2026 dollars) in Rhode Island. This is sometimes called a "millionaire's tax" or income surcharge. Importantly, the extra 3% would only apply to the amount of income *above* that $640,000 threshold — not to all of a person's earnings. For example, someone earning $700,000 would only pay the extra 3% on the $60,000 above the threshold, not on their entire income. The new rate would take effect starting with the 2027 tax year and would not apply retroactively to any previous years.

The bill would directly affect Rhode Island residents who earn more than $640,000 per year in taxable income, which represents a relatively small share of the state's population. The $640,000 figure is set in "2026 dollars," meaning it would likely be adjusted for inflation over time to maintain its real value. Those earning below that threshold would see no change to their state income taxes under this proposal.

Currently, the bill has been introduced in the Rhode Island Senate and referred to the Senate Finance Committee, where it will be reviewed before any further action is taken. It has not yet been voted on or signed into law.