2019 -- H 5189

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LC000765

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TAXATION -- WITHHOLDING OF TAX

     Introduced By: Representatives Morin, Ucci, Vella-Wilkinson, Marszalkowski, and
O'Brien

     Date Introduced: January 24, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-30-71.3 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

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

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

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

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

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

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

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

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

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

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

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

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

upon the property of the owner.

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

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

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

section.

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

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

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

taxable year beginning in that calendar year.

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

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

or payment provisions of this section.

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

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

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

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

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

associated tangible personal property which gave rise to the lien.

     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 the non-resident withholding requirement for a corporation

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

     This act would take effect upon passage.

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LC000765

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