2022 -- H 8096

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LC005688

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO TAXATION -- STATE TAX OFFICIALS

     Introduced By: Representatives Phillips, McEntee, Hawkins, Costantino, Corvese,
Solomon, Cardillo, Cortvriend, Filippi, and Fenton-Fung

     Date Introduced: April 06, 2022

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-1-7.1 of the General Laws in Chapter 44-1 entitled "State Tax

Officials" is hereby amended to read as follows:

     44-1-7.1. Interest on overpayments.

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

for that calendar year by reference to the prime rate, which was in effect on October 1 of the

preceding year. The term "prime rate" shall mean the predominant prime rate quoted by commercial

banks to large businesses as determined by the board of governors of the Federal Reserve System.

     (b) Notwithstanding any general or specific statute to the contrary, overpayments of state

taxes or surcharges that are remitted to the tax division pursuant to § 39-21.1-14, shall bear interest

at the prime rate as defined in § 44-1-7.1(a) from the date the tax or the surcharge that is referenced

in this provision was paid, or from the date including any extensions of the date the tax became

due, whichever of the dates occurs later.

     (c) If any overpayment of state tax is refunded within ninety (90) days after the last date

prescribed (or permitted by extension of time) for filing the return of the tax, or within ninety (90)

days after the return is in fact filed, no interest shall be allowed under this section on the

overpayment.

     (d) For the purposes of this section, if any overpayment of state tax results from a carry-

back of a net operating loss, the overpayment is deemed not to have been made prior to the close

of the taxable year in which the net operating loss arises.

     (e) If any overpayment of a surcharge referenced in subsection (b) of this section is

refunded within ninety (90) days after notification of overpayment of the surcharge, no interest

shall be allowed under this section on the overpayment.

     (f) Notwithstanding any provisions of the general laws to the contrary, the tax administer

shall waive interest and penalties on the taxable portion of each Paycheck Protection Program loan

taxed pursuant to §§ 44-11-11(a)(1)(iv), 44-14-11 and 44-30-12(b)(8) and forgiven during tax years

2020 and 2021; provided that, the tax on the portion is paid in full by March 31, 2022 for tax year

2020, and by March 31, 2023 for tax year 2021. The tax administer shall make available suitable

forms with instructions for making tax payments on the taxable portion of such forgiven Paycheck

Protection Program loans. The state will offer an option to corporations on the taxable portion of

each Paycheck Protection Program loan to pay the tax on a quarterly basis. In the event the entity

has already paid the tax, the entity may apply to the tax administrator for a rebate less the first

quarter tax of the Paycheck Protection Program loans.

     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 -- STATE TAX OFFICIALS

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     This act would waive interest and penalties on the taxable portion of loans taxed or forgiven

under the Paycheck Protection Program during tax years 2020 and 2021, provided any tax due is

paid by March 31, 2022 and March 31, 2023, respectively.

     This act would take effect upon passage.

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LC005688

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