2012 -- S 2101

=======

LC00336

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

     Introduced By: Senator Walter S. Felag

     Date Introduced: January 18, 2012

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 44-30-87 of the General Laws in Chapter 44-30 entitled "Personal

1-2

Income Tax" is hereby amended to read as follows:

1-3

     44-30-87. Limitations on credit or refund. -- (a) General. - Claim for credit or refund of

1-4

an overpayment of tax shall be filed by the taxpayer within three (3) years from the time the

1-5

return was filed or two (2) three (3) years from the time the tax was paid, whichever of these

1-6

periods expires the later, or if no return was filed by the taxpayer, within two (2) three (3) years

1-7

from the time the tax was paid. If the claim is filed within the three (3) year period, the amount of

1-8

the credit or refund shall not exceed the portion of the tax paid within the three (3) year period. If

1-9

the claim is not filed within the three (3) year period, but is filed within the two (2) year period,

1-10

the amount of the credit or refund shall not exceed the portion of the tax paid during the two (2)

1-11

years immediately preceding the filing of the claim. Except as otherwise provided in this section,

1-12

if no claim is filed, the amount of a credit or refund shall not exceed the amount which would be

1-13

allowable if a claim has been filed on the date the credit or refund is allowed.

1-14

      (b) Extension of time by agreement. - If an agreement under section 44-30-83(b)(2)

1-15

extending the period for assessment of tax is made within the period prescribed in subsection (a)

1-16

of this section for the filing of a claim for credit or refund, the period for filing a claim for credit

1-17

or refund, or for making credit or refund if no claim is filed, shall not expire prior to six (6)

1-18

months after the expiration of the period within which an assessment may be made pursuant to

1-19

the agreement or any extension of it thereof. The amount of the credit or refund shall not exceed

1-20

the portion of the tax paid after the execution of the agreement and before the filing of the claim

2-1

or the making of the credit or refund, as the case may be, plus the portion of the tax paid within

2-2

the period which would be applicable under subsection (a) of this section if a claim had been filed

2-3

on the date the agreement was executed.

2-4

      (c) Notice of change or correction of federal income. - If a taxpayer is required by

2-5

section 44-30-59 to file a report of a change or correction or amended return decreasing the

2-6

federal taxable income reported on his or her federal income tax return, or to report a change or

2-7

correction which is treated in the same manner as if it were an overpayment for federal income

2-8

tax purposes, claim for credit or refund of an overpayment of tax shall be filed by the taxpayer

2-9

within two (2) years from the time the report of the change or correction or the amended return

2-10

was required to be filed. If a report or amended return required by section 44-30-59 is not filed

2-11

within the ninety (90) day period specified in that section, interest on any resulting refund or

2-12

credit shall cease to accrue on the ninetieth day. The amount of the credit or refund shall not

2-13

exceed the amount of the reduction in Rhode Island personal income tax attributable to the

2-14

federal change, correction, or items amended on the taxpayer's amended federal income tax

2-15

return. This subsection shall not affect the time within which or the amount for which a claim for

2-16

credit or refund may otherwise be filed.

2-17

      (d) Overpayment attributable to net operating loss carryback. - If an overpayment is

2-18

attributable to the application to the taxpayer of a net operating loss carryback, a claim for credit

2-19

or refund shall be filed within three (3) years from the time the return was due for the taxable year

2-20

of the loss.

2-21

      (e) Failure to file claim within prescribed period. - No credit or refund shall be allowed

2-22

or made, except as provided in subsection (f) of this section, after the expiration of the applicable

2-23

period of limitation unless a claim for credit or refund is filed by the taxpayer within that period

2-24

or unless the tax administrator determines under subsection (f) of this section that the taxpayer

2-25

has made an overpayment. Any later credit shall be void and any later refund erroneous. No

2-26

period of limitations specified in any other law shall apply to the recovery by a taxpayer of

2-27

moneys paid in respect of Rhode Island personal income tax.

2-28

      (f) Effect of filing administrative petition. - If a notice of deficiency for a taxable year

2-29

has been mailed to the taxpayer under section 44-30-81 and if the taxpayer files a timely petition

2-30

with the tax administrator, the tax administrator may determine that the taxpayer has made an

2-31

overpayment for that year, whether or not a deficiency is also determined for that year, and no

2-32

separate claim for credit or refund for that year shall be filed and no separate credit or refund for

2-33

that year shall be allowed or made, except:

3-34

      (1) As to overpayment determined by a decision of the tax administrator which has

3-35

become final;

3-36

      (2) As to any amount collected in excess of an amount computed in accordance with the

3-37

decision of the tax administrator which has become final;

3-38

      (3) As to any amount collected after the period of limitation upon the making of levy for

3-39

collection has expired; and

3-40

      (4) As to any amount claimed as a result of a change or correction described in

3-41

subsection (c) of this section.

3-42

      (g) Limit on amount of credit or refund. - The amount of overpayment determined under

3-43

subsection (f) of this section shall, when the decision of the tax administrator has become final, be

3-44

credited or refunded in accordance with section 44-30-86(a) and shall not exceed the amount of

3-45

tax which the tax administrator determines as part of his or her decision was paid:

3-46

      (1) After the mailing of the notice of deficiency; or

3-47

      (2) Within the period which would be applicable under subsection (a), (b), or (c) of this

3-48

section, if on the date of the mailing of the notice of deficiency a claim had been filed, whether or

3-49

not filed, stating the grounds upon which the tax administrator finds that there is an overpayment.

3-50

      (h) Early return. - For purposes of this section, any return filed before the last day

3-51

prescribed for the filing of the return is considered as filed on that last day, determined without

3-52

regard to any extension of time granted the taxpayer.

3-53

      (i) Prepaid income tax. - For purposes of this section, any income tax withheld from the

3-54

taxpayer during any calendar year and any amount paid as estimated income tax for a taxable year

3-55

is deemed to have been paid by the taxpayer on the fifteenth day of the fourth month following

3-56

the close of his or her taxable year with respect to which the amount constitutes credit or

3-57

payment.

3-58

      (j) Return and payment of withholding tax. - Notwithstanding subsection (h) of this

3-59

section, for purposes of this section with respect to any withholding tax:

3-60

      (1) If a return for any period ending with or within a calendar year is filed before April

3-61

15 of the succeeding calendar year, the return is considered filed on April 15 of the succeeding

3-62

calendar year; and

3-63

      (2) If a tax with respect to remuneration paid during any period ending with or within a

3-64

calendar year is paid before April 15 of the succeeding calendar year, the tax is considered paid

3-65

on April 15 of the succeeding calendar year.

3-66

      (k) Cross reference. - See section 44-30-86(c), barring refund of overpayment credited

3-67

against tax of a succeeding year.

4-68

     SECTION 2. This act shall take effect upon passage.

=======

LC00336

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

***

5-1

     This act would expand the time period for requesting a state tax refund from two to three

5-2

years from the time the tax was paid.

5-3

     This act would take effect upon passage.

=======

LC00336

=======