2023 -- S 0543

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LC001780

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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: Senator Roger Picard

     Date Introduced: March 07, 2023

     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. Interest to be assessed under this

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

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

determination to the taxpayer. No down payment shall be assessed by the tax administrator on any

approved payment plan.

     (b) Each January 1 On and after January 1, 2024, the tax administrator shall compute the

rate of interest assess a six percent (6%) interest rate 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, except:

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

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

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

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

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

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

per annum.

     (3) On and after January 1, 2024, in no event shall the rate of interest exceed twelve

percent (12%) per annum nor be less than six percent (6%) per annum except:

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

rate of interest exceed twelve (12%) per annum nor be less than six percent (6%) per annum.

     (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.

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

administrator shall waive interest and penalty 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 year 2020 provided that the tax on that portion is paid in full on or before March 31,

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

payments on the taxable portion of such forgiven 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 limit the assessment of interest to four (4) calendar years prior to the date

on which notice is sent to the taxpayer and prohibit a down payment on an approved payment plan.

This act would also reduce the maximum tax rate to twelve percent (12%) and the minimum tax

rate to six percent (6%) effective January 1, 2024.

     This act would take effect upon passage.

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LC001780

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