2018 -- S 2066

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LC003908

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO TAXATION - WITHHOLDING OF TAX

     

     Introduced By: Senators DiPalma, Pearson, Conley, Lynch Prata, and Felag

     Date Introduced: January 18, 2018

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-30-71.3 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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     44-30-71.3. Sale of real property by nonresidents -- Withholding requirements.

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     (a) In a sale of real property and associated tangible personal property owned by a

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nonresident, the buyer shall deduct and withhold on the payments an amount equal to six percent

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(6%) of the total payment to nonresident individuals, estates, partnerships or trusts, and nine

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percent (9%) seven percent (7%) of the total payment to nonresident corporations. For purposes

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of this section a "nonresident corporation" is a corporation that is neither incorporated in this state

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nor authorized by the secretary of state or board of bank incorporation to do business in this state.

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     (b) "Total payment" means the net proceeds of the sale actually paid to the nonresident

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seller including the fair market value of any property to be transferred to the seller.

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     (c) Every buyer subject to the withholding, deduction and payment provisions of this

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section shall be liable for all amounts withheld or required to be withheld and the amount

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required to be withheld under the provisions of this section shall, until remitted, constitute a lien

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upon the property of the owner.

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     (d) The buyer shall remit all monies deducted and withheld pursuant to subsection (a) of

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this section to the tax administrator within three (3) banking days of the date of closing on forms

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prescribed by the tax administrator. Interest provisions of ยง 44-1-7 shall be applicable to this

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section.

 

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     (e) Payments upon which monies were deducted and withheld pursuant to subsection (a)

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of this section shall be deemed to have been paid to the tax administrator on behalf of the person

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from whom it was withheld and the person shall be credited with having paid that amount for the

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taxable year beginning in that calendar year.

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     (f) The closing attorney, lending institution, and real estate agent or broker in any

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transaction governed by the provisions of this section is not subject to the withholding, deduction,

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or payment provisions of this section.

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     (g) All forms prescribed by the tax administrator which require recording in the land

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evidence records shall include the name of the sellers and the street address of the property.

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     (h) Notwithstanding any other provision of this section to the contrary, a lien created by

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the provisions of this section shall cease to be a lien upon or enforceable against real estate upon

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the expiration of a period of ten (10) years from and after the date of the sale of real property and

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associated tangible personal property which gave rise to the lien.

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     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 - WITHHOLDING OF TAX

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     This act would provide that non-resident withholding requirement for a corporation that

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sells real estate be consistent with the seven percent (7%) corporate income tax rate.

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     This act would take effect upon passage.

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