Title 44
Taxation

Chapter 11
Business Corporation Tax

§ 44-11-7.1. Limitations on assessment.

(a) General. Except as provided in this section, the amount of the Rhode Island corporate income tax shall be assessed within three (3) years after the return was filed, whether or not the return was filed on or after the prescribed date. For this purpose, a tax return filed before the due date shall be considered as filed on the due date.

(b) Exceptions.

(1) The tax may be assessed at any time if:

(i) No return is filed.

(ii) A false or fraudulent return is filed with intent to avoid tax.

(2) Where, before the expiration of the time prescribed in this section for the assessment of tax, or before the time as extended, both the tax administrator and the taxpayer have consented, in writing, to its assessment after that time, the tax may be assessed at any time prior to the expiration of the agreed upon period.

(3) If a taxpayer’s deficiency is attributable to an excessive net operating loss carryback allowance, it may be assessed at any time that a deficiency for the taxable year of the loss may be assessed.

(4) An erroneous refund shall be considered to create an underpayment of tax on the date made. An assessment of a deficiency arising out of an erroneous refund may be made at any time within three (3) years thereafter, or at any time if it appears that any part of the refund was induced by fraud or misrepresentation of a material fact.

(c) Notwithstanding the provisions of this section, the tax may be assessed at any time within six (6) years after the return was filed if a taxpayer omits from its Rhode Island income an amount properly includable therein that is in excess of twenty-five percent (25%) of the amount of Rhode Island income stated in the return. For this purpose there shall not be taken into account any amount that is omitted in the return if the amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the tax administrator of the nature and amount of the item.

(d) The running of the period of limitations on assessment or collection of the tax or other amount, or of a transferee’s liability, shall, after the mailing of a notice of deficiency, be suspended for any period during which the tax administrator is prohibited from making the assessment or from collecting by levy, and for sixty (60) days thereafter.

(e) No period of limitations specified in any other law shall apply to the assessment or collection of Rhode Island corporate income tax. Under no circumstances shall the tax administrator issue any notice of deficiency determination for Rhode Island business corporation tax due and payable more than ten (10) years after the date upon which the return was filed or due to be filed, nor shall the tax administrator commence any collection action for any business corporation tax due and payable unless the collection action is commenced within ten (10) years after a notice of deficiency determination became a final collectible assessment; provided however, that the tax administrator may renew a statutory lien that was initially filed within the ten-year (10) period for collection actions. Both of the aforementioned ten-year (10) periods are tolled for any period of time the taxpayer is in federal bankruptcy or state receivership proceedings. “Collection action” refers to any activity undertaken by the division of taxation to collect on any state tax liabilities that are final, due, and payable under Rhode Island law. “Collection action” may include, but is not limited to, any civil action involving a liability owed under chapter 11 of title 44.

(f) The ten-year (10) limitation shall not apply to the renewal or continuation of the state’s attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation periods set forth in this section.