2022 -- H 6658

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LC003607

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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, Caldwell, Noret, O'Brien, Serpa, Hawkins, and
S Lima

     Date Introduced: January 06, 2022

     Referred To: House 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.

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

for that calendar year by adding two percent (2%) six percent (6%) to the prime rate, which was in

effect on October December 1 of the preceding year. In no event shall the rate of interest exceed

twenty-one percent (21%) per annum nor be less than eighteen percent (18%) 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 change the rate of interest for underpayments of tax to prime rate plus six

percent (6%). It would also limit the assessment of interest to four (4) calendar years prior to the

date on which notice of the delinquent payment is sent.

     This act would take effect upon passage.

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LC003607

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