If you’re thinking about selling an asset that you’ve held for investment — such as land, mutual fund shares or stock — heads up:

A recent change in Rhode Island law could force you to pay sharply more in state tax starting next year. That, in turn, could affect your decision on whether to sell this year or wait.

If you sell your asset at a profit at any point during the next several months, the Rhode Island tax rate could be as low as 1.67 percent (or even 0.83 percent, depending on your circumstances).

But if you wait until January 2010 or later, the Rhode Island tax rate on your profit will range from 3.75 percent to 9.9 percent.

So if you’ve held an asset for many years and sell during the next few months at a profit of $10,000, for example, you might wind up paying only about $167 in Rhode Island tax (or maybe just $83, depending on your circumstances).

But if you wait until January or later to sell, the amount of your Rhode Island tax on that $10,000 profit could range from $375 to $990.

That’s because, starting in January, profit on the sale of assets that you’ve held for investment will be treated the same as ordinary income, such as wages or interest on a bank account.

It’s the result of the new state budget, which was approved by the General Assembly and signed into law by Governor Carcieri on June 30.

Faced with a $590-million budget deficit for the year that began July 1, legislators took steps to cut some spending and raise some revenue.

By eliminating favorable capital gains tax rates, the state hopes to raise about $23.6 million for the year that ends June 30, 2010, and perhaps more in later years.

What to do? The good news is that you don’t have to do anything, at least not now.

The change in Rhode Island’s capital gains tax rates won’t kick in until Jan. 1, 2010. So you don’t have to take immediate action; you have several months to plan a course of action, said Mark Higgins, dean of the University of Rhode Island’s College of Business Administration.

When to sell an asset depends on a variety of factors, not just taxes, said Patricia A. Thompson, former president of the Rhode Island Society of Certified Public Accountants.

Still, the Rhode Island tax increase on profit from the sale of capital assets is just over the horizon, and shouldn’t be dismissed in your calculations, Thompson told me when I met with her at Piccerelli Gilstein & Co. LLP, a CPA firm in Providence.

She said she is advising clients this way: “If you have any transaction that will generate capital gain, you may want to close that transaction by Dec. 31, 2009.”

Another complicating factor: There are two methods for calculating your Rhode Island individual income tax.

Under the regular system, you generally may claim a variety of exemptions, deductions and credits. Your Rhode Island taxable income is then subject to rates that range from 3.75 percent to 9.9 percent.

Under the other method, known as the flat tax system, you generally can’t claim exemptions, deductions or credits. But you do get to use a single, flat tax rate. (It’s 6.5 percent for 2009, 6 percent for 2010, and 5.5 percent for 2011 and later years.)

So, if you’re a high-income taxpayer, you sell an asset at a profit next year, and you use the regular system, you’d pay tax on that profit at rates as high as 9.9 percent. If instead you use the flat tax system, you’d pay tax on that profit at a rate of 6 percent.

But if you have valuable credits that could reduce your Rhode Island tax, you might want to choose the regular system anyways. That’s because the flat tax system generally doesn’t let you claim credits.

The point is that there are lots of possibilities. So, to see how you’d fare, figure your Rhode Island personal income tax both ways — under the regular system and under the flat tax system — this year and in future years. “The calculation has to be done every single year,” Thompson said.

Here’s an example of how complicated the situation can get, assuming you’ve held an asset for more than five years, and sell at a profit of $10,000:

•Sell This Year: If you use the regular system for calculating your Rhode Island tax, your tax rate will be either 0.83 percent or 1.67 percent, so the most you’ll pay is $167. If you use the flat tax system, your tax rate will be 6.5 percent, so you’ll pay $650 in tax.

•Sell Next Year: If you use the regular system for calculating your Rhode Island tax, your tax rate will range from 3.75 percent to 9.9 percent, so your tax will total between $375 and $990. If you use the flat tax system, your tax rate will be 6 percent, so you’ll pay $600 in tax.

Following are a few other points to keep in mind:

•If you sell your principal residence at a profit, and you clear certain hurdles, you pay no federal income tax if the profit is less than $250,000 if you’re single, or less than $500,000 if you’re married. That same rule will continue to apply for your Rhode Island income tax, said state Tax Administrator David M. Sullivan.

The new state law applies only if you sell on or after Jan. 1, 2010, and your profit exceeds the thresholds mentioned above. In that case, only the excess would be treated as ordinary income for Rhode Island tax purposes, Sullivan said.

•The new rules also apply, effective Jan. 1, 2010, to gain from the sale of collectibles, and to a special provision that involves a tax break known as depreciation on rental or business property.

•So as not to confuse taxpayers, the Rhode Island Division of Taxation will wait until later this year to post notices about the new law involving capital gains, Sullivan said.

(The earliest you’d see the impact is on the return you file in early 2011. But you could see it sooner if you make quarterly estimated tax payments next year.)

•The change in Rhode Island’s law will affect people across the income spectrum. About 60,000 Rhode Island resident taxpayers reported capital gains on their Rhode Island individual income tax returns for the 2007 tax year, the latest period for which figures are available, according to statistics compiled by the state Division of Taxation.

And the figures show that capital gains were reported by people with low incomes, middle incomes and high incomes.

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