Rhode Island does not have a wealth tax. Lawmakers introduced one in 2025 as part of the Fair Share for Rhode Island package: House Bill H7595 would impose a 1% annual tax on a resident’s worldwide financial assets above $25 million.1Rhode Island General Assembly. State Lawmakers Announce Fair Share for Rhode Island Package The bill has not become law, and as of early 2026 no U.S. state has enacted a true tax on accumulated wealth. Rhode Island does, however, tax large estates at death, which is a separate thing people sometimes confuse with a wealth tax.
What H7595 Would Actually Tax
The proposed rate is 1% per year. The threshold is $25 million. Only the portion above that line would be taxed, so someone with exactly $30 million in qualifying assets would owe $50,000 for the year.
The base is narrower than the phrase “wealth tax” suggests. H7595 reaches financial intangible assets: cash, investments, stocks, bonds, and intellectual property owned or controlled by a Rhode Island resident.2BillTrack50. RI H7595 Real estate, vehicles, art, and other tangible property do not count toward the $25 million threshold under the bill’s current language. A resident with $15 million in financial assets and $12 million in real estate would owe nothing, even though total net worth passes $25 million.
The Rest of the Fair Share Package
The wealth tax is one piece of a larger set of revenue bills, and it helps to keep them straight. The package also proposes a 3% surtax on taxable income above roughly $640,000, a 4% tax on passive income such as capital gains and dividends, and a digital advertising tax on businesses earning more than $1 million a year from digital ads.1Rhode Island General Assembly. State Lawmakers Announce Fair Share for Rhode Island Package Those three are income-based taxes. Only H7595 reaches assets themselves.
How This Compares To Other States
No state has enacted a true wealth tax on accumulated assets. Several have taken aim at high earners by other routes, and the distinction is worth drawing clearly.
- Massachusetts voters approved a 4% surtax on annual income above $1 million in 2022.
- Minnesota began imposing a 1% tax on net investment income above $1 million in 2024.
- Washington passed a 7% tax on capital gains above $250,000 in 2021, which has survived legal challenges.
Each of those taxes the flow of money, whether income, gains, or investment returns. Rhode Island’s proposal would tax the assets themselves, whether or not they produced any income that year. That is the structural difference, and it is also why passage would be a first.
Would It Survive In Court?
Even if the General Assembly passes H7595, courts might stop it. The central federal question involves the Direct Tax Clause of the U.S. Constitution, which requires “direct taxes” to be apportioned among the states by population. If a court classified a wealth tax as a direct tax, apportionment would make it wildly uneven across states, because wealth concentration varies sharply by geography.
The 2024 Supreme Court decision in Moore v. United States was watched for guidance on this. The Court upheld the Mandatory Repatriation Tax but deliberately avoided ruling on whether Congress can tax unrealized gains or accumulated wealth. The majority opinion focused on whether realized corporate income could be attributed to shareholders and left the broader question unresolved.
State-level challenges tend to run on different tracks: state constitutional provisions requiring uniform taxation, due process objections about taxing illiquid assets, and arguments about forced liquidation of closely held businesses and the right to travel. California’s proposed Billionaire Tax Act has drawn arguments along those lines. Rhode Island’s bill would face similar scrutiny, and the outcome is genuinely uncertain. These constitutional questions are the main reason no state has successfully put a true wealth tax in place.
Where Things Stand
H7595 remains a bill. There is no filing obligation and no tax to pay. Residents with large financial portfolios have nothing to do under Rhode Island law in response to the proposal itself. Whether the legislature advances it, whether it survives a signature, and whether it survives court are three separate hurdles, and none has been cleared.
What Rhode Island Already Taxes At Death
Rhode Island has no wealth tax, but it does have an estate tax, and the two sometimes get conflated. The estate tax applies once, when someone dies, to the transfer of their property. For 2026, estates valued at $1,838,056 or less are exempt.3RI Division of Taxation. Estate Tax Updates 2026 The corresponding tax credit is $87,940.4RI Division of Taxation. 2026 Tax Changes The threshold adjusts annually based on changes to the Consumer Price Index.
The tax is calculated using a formula tied to the maximum federal credit for state death taxes as it existed under federal law on January 1, 2001, minus the Rhode Island credit. It applies to Rhode Island residents based on their total estate and to non-residents who owned real estate or tangible personal property located within the state.5Rhode Island General Assembly. Rhode Island General Laws Title 44 Taxation 44-22-1.1 For non-resident estates, the tax is prorated based on the share of property situated in Rhode Island relative to the total gross estate.
One planning point worth knowing: unlike the federal estate tax, Rhode Island does not allow portability of the exemption between spouses. Each spouse has a separate exemption, and if one dies with an estate well below $1,838,056, the unused portion is lost. For married couples with meaningful assets, that makes trust-based planning more consequential than it might appear.
The estate tax return, Form RI-706, is due within nine months of the date of death.6RI Division of Taxation. Estate Tax An executor can request an automatic six-month filing extension on Form RI-4768, but interest still runs from the original due date. Even estates below the exemption may need to file to clear title to Rhode Island real estate, so the filing question is not always answered by looking at the dollar threshold alone.