Last Update: Feb 9 @ 1:32 PM
public policy
R.I. top income tax rate now 5th highest


PROVIDENCE — Rhode Island’s top statutory income tax rate is higher than those of all but four other states following the passage of a flurry of state budgets, according to The Tax Foundation.

Oregon moved ahead of Rhode Island on the list this week, jumping from sixth highest to second highest, after Gov. Ted Kulongoski signed a law raising the top income rate there from 9 percent (on income above $15,200 for couples and $7,600 for singles) to 11 percent (on income above $250,000).

Rhode Island’s budget for the fiscal year that started yesterday left unchanged the state’s top rate of 9.9 percent, which applies to all taxable income at the top federal income tax rate. This year that is $372,950 for both married couples and single filers.

Looked at another way, however, Rhode Island’s top rate actually would be tied for seventh highest. That’s because three states — Hawaii, Oregon and New Jersey — have not one but two separate income tax rates that are higher than Rhode Island’s 9.9 percent.

Oregon’s new law created a second tax bracket that matches Rhode Island’s 9.9 percent rate. In Oregon, that rate applies to all income above $125,000.

In addition, the rate of Rhode Island’s second-highest income tax bracket — a 9 percent rate that applies to income in the second-highest federal bracket — is now tied with Oregon and Hawaii as the 11th-highest rate in the nation, according to the Tax Foundation.

However, the 9 percent rate kicks in sooner for citizens of the other two states, applying to income between $150,000 and $175,000 in Hawaii and between $7,600 and $125,000 in Oregon.

In Rhode Island, the 9 percent rate applies to income between $208,850 and $372,950 for married couples filing jointly and between $171,550 and $372,950 for single filers.

Only 10 states have statutory income tax rates above 8 percent this year, according to The Tax Foundation.

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