Taxpayer Relief Act of 2006: Alternative Flat-Tax Rate Computation
Rhode Island taxpayers now have two options for computing their state personal income tax, and are free to choose whichever calculation method yields the lowest tax liability:
- Applying the stateís traditional marginal income tax rates to their federal adjusted gross income (AGI) after subtracting allowable deductions and exemptions; or
- For tax year 2006, paying an 8.0% flat tax rate that is also applied to AGI, but without deductions and exemptions. The flat tax rate will be lowered 0.5% each year until 2011, when it will remain at 5.5%.
Jean Robertson