Rhode Island

Tax Rate Range: Low - 3.75%, High - 9.9%
Income Brackets: Lowest - $30,650, Highest - $336,551; Effective for the 2006 tax year, taxpayers may elect to computer income tax liability based on the graduated rate schedule or an alternative flat rate equal to 8%.
Number of Brackets: 5
Personal Exemptions: Federal exemptions multiplied by $3,300.
Standard Deduction: Federal amount or $5,150 (single), $8,600 (married filing jointly).
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: None
Retirement Income Taxes: Railroad Retirement benefits are exempt. Out-of-state government pensions are fully taxed. Social Security is taxed to the extent it is federally taxed.
Retired Military Pay: Follows federal tax rules.
Military Disability Retired Pay:
Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Sales Taxes

State Sales Tax: 7% (food, some clothing, precious metal bullion, some burial-related items, prescription and non-prescription drugs are exempt).
Gasoline Tax: 31 cents/gallon
Diesel Fuel Tax: 31 cents/gallon
Cigarette Tax: $2.40/pack of 20

State property taxes are not imposed directly by the state, but a portion of the city and town taxes is set aside for state purpose. Taxes are assessed and collected by the local jurisdiction. Fire district taxes are collected in some rural communities. Homeowners 65 and older who earn $30,000 or less can get a property tax relief credit of up to $250. Call 401-222-2280 for details.

There is no inheritance tax. Rhode Island imposes a tax on the transfer of the net value of the assets of every resident decedent and the value of real and personal property of nonresident decedents located within this state. The tax is apportioned in accordance with the location of the assets with actual situs (both real and persona property) in another state. The fraction is Rhode Island assets over total estate assets.
The Rhode Island estate tax is designed to absorb the federal estate tax credit for state death taxes. However, the state has decoupled from current federal estate tax laws and adopts the version of the Internal Revenue Code in effect on January 1, 2001. Estates of decedents who are declared missing in action by the armed forces of the United States are not subject to the state's estate tax.
For further information, visit the Rhode Island Division of Taxation site or call 401-222-1111.