2023 -- H 5620

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LC001635

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TAXATION -- STATE TAX OFFICIALS

     

     Introduced By: Representatives Phillips, Finkelman, Serpa, J. Brien, Casey, Cardillo,
Fenton-Fung, Baginski, Solomon, and Corvese

     Date Introduced: February 15, 2023

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-1-7 of the General Laws in Chapter 44-1 entitled "State Tax

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Officials" is hereby amended to read as follows:

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     44-1-7. Interest on delinquent payments.

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     (a) Whenever the full amount of any state tax or any portion or deficiency, as finally

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determined by the tax administrator, has not been paid on the date when it is due and payable,

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whether the time has been extended or not, there shall be added as part of the tax or portion or

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deficiency interest at the rate as determined in accordance with subsection (b) of this section,

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notwithstanding any general or specific statute to the contrary. Interest to be assessed under this

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section shall be limited to not more than four (4) calendar years prior to the earliest date the

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administrator provides, mails or serves a tax notice, notice of deficiency, or deficiency

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determination to the taxpayer.

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

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for that calendar year by adding two percent (2%) to the prime rate, which was in effect on October

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1 of the preceding year, except:

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     (1) Before January 1, 2023, in no event shall the rate of interest exceed twenty-one percent

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(21%) per annum nor be less than eighteen percent (18%) per annum;

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     (2) On and after January 1, 2023, in no event shall the rate of interest exceed twenty-one

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percent (21%) per annum nor be less than twelve percent (12%) per annum except:

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     (i) For trust fund taxes as established by §§ 44-19-35 and 44-30-76, in no event shall the

 

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rate of interest exceed twenty-one percent (21%) per annum nor be less than eighteen percent (18%)

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per annum.

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     (c) “Prime rate” as used in subsection (b) of this section means the predominant prime rate

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quoted by commercial banks to large businesses as determined by the board of governors of the

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Federal Reserve System.

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

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administrator shall waive interest and penalty on the taxable portion of each Paycheck Protection

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

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during tax year 2020 provided that the tax on that portion is paid in full on or before March 31,

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2022. The tax administrator shall make available suitable forms with instructions for making tax

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payments on the taxable portion of such forgiven Paycheck Protection Program loans.

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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 -- STATE TAX OFFICIALS

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     This act would limit the assessment of interest to four (4) calendar years prior to the date

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on which notice of the delinquent payment is sent to the taxpayer.

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     This act would take effect upon passage.

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LC001635

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