2019 -- S 0674

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LC002129

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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 -- STATE TAX OFFICIALS -- SALES AND USE TAXES --

ENFORCEMENT AND COLLECTION

     Introduced By: Senators Euer, Lawson, Cano, Murray, and Valverde

     Date Introduced: March 21, 2019

     Referred To: Senate 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.

     (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 percent (18%) per annum. (1)There shall be added to

the amount shown as tax on a return for which the full amount of any state tax or any portion or

deficiency has not been paid up to thirty (30) days beyond date in which the payment became due

and payable, or any fraction thereof which failure continues, a penalty of five percent (5%) of the

amount of such tax;

     (2) There shall be added to the amount shown as tax on a return for which the full amount

of any state tax or any portion or deficiency has not been paid in an excess of thirty (30) days up

to sixty (60) days, or any fraction thereof which failure continues, a penalty of seven and one-half

percent (7.5%) of the amount of such tax;

     (3) There shall be added to the amount shown as tax on a return for which the full amount

of any state tax or any portion or deficiency has not been paid in an excess of sixty (60) days or

more, which failure continues, a penalty of ten percent (10%) of the amount of such tax.

     (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. Section 44-19-20 of the General Laws in Chapter 44-19 entitled "Sales and

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

     44-19-20. Interest and penalties on delinquent payments.

     (a) Any person who fails to pay any tax to the state or any amount of tax required to be

collected and paid to the state, except amounts of determinations made by the tax administrator

under §§ 44-19-11 -- 44-19-14 within the required time shall pay a penalty of ten percent (10%)

five percent (5%) of the tax or amount of the tax, in addition to the tax or amount of the tax, plus

interest at the annual rate provided by § 44-1-7 from the date on which the tax or amount of the

tax required to be collected became due and payable to the state until date of payment thirty (30)

days from the date on which the tax or amount of the tax required to be collected became due and

payable to the state; shall pay a penalty of seven and one-half percent (7.5%) of the tax or amount

of the tax, in addition to the tax or amount of the tax, plus interest at the annual rate provided by §

44-1-7 from thirty-one (31) days from the date on which the tax or amount of the tax required to

be collected became due and payable to the state until sixty (60) days from the date on which the

tax or amount of the tax required to be collected became due and payable to the state; shall pay a

penalty of ten percent (10%) of the tax or amount of the tax, in addition to the tax or amount of

the tax, plus interest at the annual rate provided by § 44-1-7 from sixty-one (61) days from the

date the tax required to be collected became due and payable to the date until date of payment.

     (b) Payment of any tax to the state or any amount of tax required to be collected and paid

to the state shall be paid no later than midnight of the date when such tax is due and payable.

     SECTION 3. 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 -- STATE TAX OFFICIALS -- SALES AND USE TAXES --

ENFORCEMENT AND COLLECTION

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     This act would provide that a tax payment shall be paid by midnight on the date in which

the tax becomes due and payable. It provides for penalties of five percent (5%) for taxes

remaining unpaid from date such tax became due and payable up to thirty (30) days beyond the

due date; seven and one-half percent (7.5%) for taxes remaining unpaid from thirty-one (31) days

from the date such tax became due and payable up to sixty (60) days; and ten percent (10%) for

taxes remaining unpaid from sixty-one days from the date such tax became due and payable and

beyond.

     This act would take effect upon passage.

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LC002129

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