2014 -- H 7743

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LC004699

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

     RELATING TO TAXATION - INTEREST ON DELINQUENT PAYMENTS

     Introduced By: Representatives Giarrusso, Serpa, Williams, Hull, and Bennett

     Date Introduced: February 27, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-1-7 of the General Laws in Chapter 44-1 entitled "State Tax

Officials" is hereby amended to read as follows:

     44-1-7. Interest on delinquent payments. [Effective until August 15, 2010.] -- (a)

Whenever the full amount of any state tax or any portion or deficiency, as finally determined by

the tax administrator, or any surcharge that is required to be remitted to the tax division pursuant

to section 39-21.1-14, has not been paid on the date when it is due and payable, whether the time

has been extended or not, there shall be added as part of the tax or portion or deficiency, or

surcharge as referenced in this provision, interest at the rate as determined in accordance with

subsection (b) of this section, notwithstanding any general or specific statute to the contrary;

provided, however, no interest or penalties shall be added to any deficiency resulting from

imputed income from domestic partner healthcare benefits for tax years 2002 through 2004

provided the taxpayer files amended returns by August 15, 2006.

      (b) Each January 1 the tax administrator shall compute the rate of interest to be in effect

for that calendar year by adding two percent (2%) to the prime rate, which was in effect on

October 1 of the preceding year. In no event shall the rate of interest exceed twenty-one percent

(21%) per annum nor be less than eighteen percent (18%) per annum.

      (c) "Prime rate" as used in subsection (b) of this section means the predominant prime

rate quoted by commercial banks to large businesses as determined by the board of governors of

the Federal Reserve System.

     44-1-7. Interest on delinquent payments. [Effective August 15, 2010.] -- (a) Whenever

the full amount of any state tax or any portion or deficiency, as finally determined by the tax

administrator, has not been paid on the date when it is due and payable, whether the time has been

extended or not, there shall be added as part of the tax or portion or deficiency interest at the rate

as determined in accordance with subsection (b) of this section, notwithstanding any general or

specific statute to the contrary.

      (b) Each January 1 the tax administrator shall compute the rate of interest to be in effect

for that calendar year by adding two percent (2%) to the prime rate, which was in effect on

October 1 of the preceding year. In no event shall the rate of interest exceed twenty-one percent

(21%) per annum nor be less than eighteen four percent (18%) (4%) per annum.

      (c) "Prime rate" as used in subsection (b) of this section means the predominant prime

rate quoted by commercial banks to large businesses as determined by the board of governors of

the Federal Reserve System.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

     RELATING TO TAXATION - INTEREST ON DELINQUENT PAYMENTS

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     This act would lower the minimum interest rate to be charged on delinquent tax payments

from eighteen percent (18%) to four percent (4%).

     This act would take effect upon passage.

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