2016 -- S 2204

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LC004160

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TAXATION - SALES AND USE TAXES - ENFORCEMENT AND

COLLECTION

     

     Introduced By: Senators Lombardi, Lynch Prata, McCaffrey, Jabour, and Metts

     Date Introduced: January 27, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-19-13 of the General Laws in Chapter 44-19 entitled "Sales and

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Use Taxes - Enforcement and Collection" is hereby amended to read as follows:

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     44-19-13. Notice of determination. – (a) The tax administrator shall give to the retailer

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or to the person storing, using, or consuming the tangible personal property a written notice of his

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or her determination. Except in the case of fraud, intent to evade the provisions of this article,

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failure to make a return, or claim for additional amount pursuant to §§ 44-19-16 -- 44-19-19,

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every notice of a deficiency determination shall be mailed within three (3) years after the fifteenth

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(15th) day of the calendar month following the month for which the amount is proposed to be

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determined or within three (3) years after the return is filed, whichever period expires later, unless

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a longer period is agreed upon by the tax administrator and the taxpayer.

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     (b) Notwithstanding the provisions of subsection (a) of this section, under no

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circumstances shall the tax administrator issue a notice of a deficiency determination for any sales

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or use tax determined to be due and payable or commence any collection action for any tax unless

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the matter is issued or commenced within ten (10) years after the return is filed or was due to be

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filed.

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     SECTION 2. Section 44-23-9 of the General Laws in Chapter 44-23 entitled "Estate and

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Transfer Taxes - Enforcement and Collection" is hereby amended to read as follows:

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     44-23-9. Assessment and notice of estate tax -- Collection powers -- Lien. – (a) The

 

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tax imposed by § 44-22-1.1 shall be assessed upon the full and fair cash value of the net estate

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determined by the tax administrator as provided in this chapter. Notice of the amount of the tax

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shall be mailed to the executor, administrator, or trustee, but failure to receive the notice does not

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excuse the nonpayment of or invalidate the tax. The tax administrator shall receive and collect the

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assessed taxes in the same manner and with the same powers as are prescribed for and given to

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the collectors of taxes by chapters 7 -- 9 of this title. The tax shall be due and payable as provided

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in § 44-23-16, shall be paid to the tax administrator, and shall be and remain a lien upon the estate

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until it is paid. All executors, administrators, and trustees are personally liable for the tax until it

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is paid.

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     (b) Notwithstanding the provisions of subsection (a) of this section, under no

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circumstances shall the tax administrator issue any notice of the amount of the tax nor commence

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any collection action for any tax due and payable unless the matter is issued or commenced

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within ten (10) years after the date the notice of the amount of tax was sent or should have been

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sent.

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     SECTION 3. Section 44-30-83 of the General Laws in Chapter 44-30 entitled "Personal

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Income Tax" is hereby amended to read as follows:

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     44-30-83. Limitations on assessment. -- (a) General. - Except as otherwise provided in

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this section the amount of the Rhode Island personal income tax shall be assessed within three (3)

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years after the return was filed, whether or not the return was filed on or after the prescribed date.

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For this purpose a tax return filed before the due date shall be considered as filed on the due date;

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and a return of withholding tax for any period ending with or within a calendar year filed before

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April 15 of the succeeding calendar year shall be considered filed on April 15 of the succeeding

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calendar year.

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      (b) Exceptions.

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      (1) Assessment at any time. - The tax may be assessed at any time if:

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      (i) No return is filed;

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      (ii) A false or fraudulent return is filed with intent to evade tax; or

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      (iii) The taxpayer fails to file a report, pursuant to § 44-30-59, of a change, correction, or

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amended return, increasing his or her federal taxable income as reported on his or her federal

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income tax return or to report a change or correction which is treated in the same manner as if it

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were a deficiency for federal income tax purposes.

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      (2) Extension by agreement. - Where, before the expiration of the time prescribed in this

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section for the assessment of tax, or before the time as extended pursuant to this section, both the

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tax administrator and the taxpayer have consented in writing to its assessment after that time, the

 

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tax may be assessed at any time prior to the expiration of the period agreed upon.

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      (3) Report of changed or corrected federal income. - If the taxpayer shall, pursuant to §

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44-30-59, file an amended return, or report a change or correction increasing his or her federal

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taxable income or report a change or correction which is treated in the same manner as if it were a

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deficiency for federal income tax purposes, an assessment may be made at any time prior to two

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(2) years after the report or amended return was filed. This assessment of Rhode Island personal

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income tax shall not exceed the amount of the increase attributable to the federal change,

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correction, or items amended on the taxpayer's amended federal income tax return. The

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provisions of this paragraph shall not affect the time within which or the amount for which an

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assessment may otherwise be made.

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      (4) Deficiency attributable to net operating loss carryback. - If a taxpayer's deficiency is

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attributable to an excessive net operating loss carryback allowance, it may be assessed at any time

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that a deficiency for the taxable year of the loss may be assessed.

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      (5) Recovery of erroneous refund. - An erroneous refund shall be considered to create an

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underpayment of tax on the date made. An assessment of a deficiency arising out of an erroneous

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refund may be made at any time within three (3) years thereafter, or at any time if it appears that

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any part of the refund was induced by fraud or misrepresentation of a material fact.

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      (6) Armed forces relief. - For purposes of this tax, the date appearing in 26 U.S.C. §

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692(a) shall be January 1, 1971.

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      (c) Omission of income on return. - Notwithstanding the foregoing provisions of this

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section, the tax may be assessed at any time within six (6) years after the return was filed if an

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individual omits from his or her Rhode Island income an amount properly includible therein

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which is in excess of twenty-five percent (25%) of the amount of Rhode Island income stated in

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the return. For this purpose there shall not be taken into account any amount which is omitted in

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the return if the amount is disclosed in the return, or in a statement attached to the return, in a

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manner adequate to apprise the tax administrator of the nature and amount of the item.

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      (d) Suspension of limitation. - The running of the period of limitations on assessment or

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collection of tax or other amount (or of a transferee's liability) shall, after the mailing of a notice

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of deficiency, be suspended for the period during which the tax administrator is prohibited under

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§ 44-30-81(c) from making the assessment or from collecting by levy, and for sixty (60) days

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thereafter.

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      (e) Limitations exclusive. - No period of limitations specified in any other law shall

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apply to the assessment or collection of Rhode Island personal income tax. Under no

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circumstances shall the tax administrator issue any assessment for Rhode Island personal income

 

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tax due or commence any collection action for any personal income tax due and payable pursuant

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to the provisions of this chapter or chapter 30.1 of title 44 unless the matter is issued or

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commenced within ten (10) years after the date upon which the return was filed or due to be filed.

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     SECTION 4. Section 44-11-7.1 of the General Laws in Chapter 44-11 entitled "Business

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Corporation Tax" is hereby amended to read as follows:

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     44-11-7.1. Limitations on assessment. -- (a) General. Except as provided in this section,

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the amount of the Rhode Island corporate income tax shall be assessed within three (3) years after

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the return was filed, whether or not the return was filed on or after the prescribed date. For this

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purpose, a tax return filed before the due date shall be considered as filed on the due date.

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      (b) Exceptions. (1) The tax may be assessed at any time if:

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      (i) No return is filed.

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      (ii) A false or fraudulent return is filed with intent to avoid tax.

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      (2) Where, before the expiration of the time prescribed in this section for the assessment

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of tax, or before the time as extended, both the tax administrator and the taxpayer have consented,

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in writing, to its assessment after that time, the tax may be assessed at any time prior to the

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expiration of the agreed upon period.

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      (3) If a taxpayer's deficiency is attributable to an excessive net operating loss carryback

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allowance, it may be assessed at any time that a deficiency for the taxable year of the loss may be

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assessed.

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      (4) An erroneous refund shall be considered to create an underpayment of tax on the date

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made. An assessment of a deficiency arising out of an erroneous refund may be made at any time

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within three (3) years thereafter, or at any time if it appears that any part of the refund was

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induced by fraud or misrepresentation of a material fact.

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      (c) Notwithstanding the provisions of this section, the tax may be assessed at any time

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within six (6) years after the return was filed if a taxpayer omits from its Rhode Island income an

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amount properly includable therein which is in excess of twenty-five percent (25%) of the amount

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of Rhode Island income stated in the return. For this purpose there shall not be taken into account

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any amount which is omitted in the return if the amount is disclosed in the return, or in a

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statement attached to the return, in a manner adequate to apprise the tax administrator of the

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nature and amount of the item.

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      (d) The running of the period of limitations on assessment or collection of the tax or

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other amount, or of a transferee's liability, shall, after the mailing of a notice of deficiency, be

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suspended for any period during which the tax administrator is prohibited from making the

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assessment or from collecting by levy, and for sixty (60) days thereafter.

 

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      (e) No period of limitations specified in any other law shall apply to the assessment or

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collection of Rhode Island corporate income tax. Under no circumstances shall the tax

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administrator issue any assessment for Rhode Island business corporation tax due or commence

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any collection action for any business corporation tax due and payable pursuant to the provisions

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of this chapter unless the matter is issued or commenced within ten (10) years after the date upon

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which the return was filed or due to be filed.

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     SECTION 5. This act shall take effect on July 1, 2016.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - SALES AND USE TAXES - ENFORCEMENT AND

COLLECTION

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     This act would enact a ten (10) year statute of limitations on any assessment of tax due

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and payable or commencement of any collection action for any tax due and payable by the tax

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administrator for the sales and use tax, the estate tax, the personal income tax, and business

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corporation tax.

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     This act would take effect on July 1, 2016.

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