2022 -- H 7936

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LC005237

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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: Representative Jason Knight

     Date Introduced: March 07, 2022

     Referred To: House Judiciary

     (Dept. of Revenue)

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-1 of the General Laws entitled "State Tax Officials" is hereby

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amended by adding thereto the following sections:

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     44-1-41. Jurisdiction of superior court to hear tax matters - Scope of judicial review.

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     (a) Effective January 1, 2023, each appeal of a final decision of the tax administrator

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concerning an assessment, deficiency, refund claim, license, permit, or otherwise shall be heard by

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the superior court in and for the counties of Providence and Bristol. The superior court in and for

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the counties of Providence and Bristol shall have exclusive jurisdiction to hear all state tax matters,

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including, but not limited to, refunds, declaratory judgment, and equitable relief.

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     (b) Any taxpayer aggrieved by a final decision of the tax administrator concerning an

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assessment, deficiency, refund claim, license, permit, or otherwise may file a complaint for

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redetermination of the assessment, deficiency, or otherwise in the court as provided by statute. The

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complaint shall be filed within thirty (30) days after the mailing of notice of the final decision and

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shall set forth the reasons why the final decision is alleged to be erroneous and praying relief

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therefrom.

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     (c) All existing references in title 31, title 39, title 44, or title 46 to appeals of any final

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decision of the tax administrator to, or to any action commenced by the tax administrator in, the

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sixth division district court, shall be stricken and replaced with references to the superior court in

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and for the counties of Providence and Bristol.

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     (d) Venue for appeals of any final decision of the tax administrator shall be in the superior

 

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court in and for the counties of Providence and Bristol provided that: for an action commenced by

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the tax administrator for injunctive relief pursuant to § 44-19-5.1 or for a writ of execution pursuant

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to § 44-1-29 or § 44-30-92(c), venue shall be in the superior court of the county wherein the cause

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of action arose or the defendant resides.

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     (e) Judicial review of appeals of any final decision of the tax administrator shall be

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conducted pursuant to § 42-35-15.

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     (f) Section 8-8-24 through to and including § 8-8-32 shall be repealed effective January 1,

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2023.

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     (g) A taxpayer's right to file a complaint pursuant to this section for review of a final

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decision of the tax administrator concerning an assessment, deficiency, refund claim, license,

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permit, or otherwise shall be conditional upon prepayment of all taxes, interest, and penalties set

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forth in the assessment, deficiency, or otherwise.

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     (h) All contested matters wherein the requests for administrative hearings received by the

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tax administrator on or after January 1, 2023, shall be subject to judicial review only pursuant to §

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42-35-15 and this section.

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     44-1-42. Prepayment as condition precedent to review of tax case - Exemption

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therefrom.

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     A taxpayer's right to file a complaint pursuant to § 44-1-41 for review of a final decision

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of the tax administrator ordering an assessment, deficiency, or otherwise shall be conditional upon

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prepayment of all taxes, interest, and penalties set forth in the assessment, deficiency, or otherwise;

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provided, however, that in lieu of the prepayment, the taxpayer may file together with his or her

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complaint a motion for an exemption from the prepayment requirement. The taxpayer shall set the

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motion down for hearing within twenty (20) days after the answer to the complaint is filed;

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otherwise, the motion shall be deemed to be denied. The court shall grant the motion if it determines

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both:

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     (1) That the taxpayer has a reasonable probability of success on the merits; and

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     (2) That the taxpayer is unable to prepay all taxes, interest, and penalties set forth in the

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assessment, deficiency, or otherwise. In making its determination on the issue of ability to prepay,

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the court shall consider not only the taxpayer's own financial resources but also the ability of the

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taxpayer to borrow the required funds. If the motion is denied, the taxpayer shall make prepayment

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within thirty (30) days of the entry of the court's order denying the motion; otherwise, the complaint

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shall be dismissed upon motion of the tax administrator.

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     SECTION 2. Sections 8-8-24, 8-8-25, 8-8-26, 8-8-27, 8-8-28, 8-8-29, 8-8-30, 8-8-31 and

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8-8-32 of the General Laws in Chapter 8-8 entitled "District Court" are hereby repealed.

 

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     8-8-24. Tax proceedings to be without jury and de novo -- Precedence on calendar.

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     Each appeal of a final decision of the tax administrator concerning an assessment,

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deficiency, or otherwise shall be an original, independent proceeding in the nature of a suit in equity

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to set aside the final decision and shall be tried de novo and without a jury. Every such matter shall

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have precedence over all other civil cases on the calendar on the date to which it is assigned for

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trial and shall continue to have precedence on the calendar on a day-to-day basis until it is heard.

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     8-8-25. Time for commencement of proceeding against the division of taxation.

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     (a) Any taxpayer aggrieved by a final decision of the tax administrator concerning an

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assessment, deficiency, or otherwise may file a complaint for redetermination of the assessment,

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deficiency, or otherwise in the court as provided by statute under title 44.

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     (b) The complaint shall be filed within thirty (30) days after the mailing of notice of the

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final decision and shall set forth the reasons why the final decision is alleged to be erroneous and

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praying relief therefrom. The clerk of the court shall thereupon summon the division of taxation to

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answer the complaint.

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     8-8-26. Prepayment as condition precedent to review of tax case.

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     A taxpayer's right to file a complaint pursuant to § 8-8-25 for review of a final decision of

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the tax administrator ordering an assessment, deficiency, or otherwise shall be conditional upon

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prepayment of all taxes, interest, and penalties set forth in the assessment, deficiency, or otherwise;

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provided, however, that in lieu of the prepayment, the taxpayer may file together with his or her

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complaint a motion for an exemption from the prepayment requirement. The taxpayer shall set the

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motion down for hearing within twenty (20) days after the answer to the complaint is filed;

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otherwise, the motion shall be deemed to be denied. The court shall grant the motion if it determines

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both: (1) that the taxpayer has a reasonable probability of success on the merits; and (2) that the

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taxpayer is unable to prepay all taxes, interest, and penalties set forth in the assessment, deficiency,

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or otherwise. In making its determination on the issue of ability to prepay, the court shall consider

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not only the taxpayer's own financial resources but also the ability of the taxpayer to borrow the

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required funds. If the motion is denied, the taxpayer shall make prepayment within thirty (30) days

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of the entry of the court's order denying the motion; otherwise, the complaint shall be dismissed

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upon motion of the tax administrator.

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     8-8-27. Refund suits.

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     (a) Any taxpayer may bring an action for a refund of taxes previously overpaid. The suit

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for refund may not be brought prior to the date of a final determination by the tax administrator

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denying the claim for refund. No action for a refund of tax shall be brought after the expiration of

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thirty (30) days from a notice of final determination of the tax administrator denying the claimed

 

LC005237 - Page 3 of 6

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refund.

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     (b) As used in this section and § 8-8-28, "tax" includes any surcharge imposed under § 1-

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6-2, and "taxpayer" includes an operator as defined in § 1-6-1.

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     8-8-28. Burden of proof in tax cases.

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     In all tax cases before the court, and upon appeal therefrom, a preponderance of the

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evidence shall suffice to sustain the burden of proof. The burden of proof shall fall upon the party

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seeking affirmative relief and the burden of going forward with the evidence shall shift as in other

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civil litigation. In any proceedings in which the division of taxation alleges fraud or an exception

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to the normal statute of limitations on assessment, the burden of proof in respect of that issue shall

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be upon the division of taxation. To be sustained on the issue of fraud, the division of taxation must

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sustain a burden of clear and convincing proof.

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     8-8-29. Court stenographer in tax cases.

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     Any party may obtain the services of a court stenographer in the district court in a tax case,

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and that party shall pay all costs of the court stenographer.

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     8-8-30. Decision of the court -- Form and contents.

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     The court shall render its decision in writing, including therein a concise statement of the

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facts found by the court and the conclusions of law reached by the court. The court may affirm,

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reverse, modify, or remand any determination or shall grant such relief, invoke such other remedies,

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and issue such orders in accordance with its decision as shall be appropriate in a court of general

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jurisdiction.

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     8-8-31. Frivolous appeals.

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     Whenever it appears to the court that proceedings before it have been instituted by the

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taxpayer solely for delay and that the taxpayer's complaint is frivolous and groundless, damages in

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an amount not in excess of five thousand dollars ($5,000) plus costs may be assessed against the

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taxpayer by the court.

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     8-8-32. Review by supreme court.

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     Any party in interest, if aggrieved by a final judgment rendered in proceedings brought

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under this chapter, may within twenty (20) days from the date of entry of the judgment petition the

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supreme court of the state of Rhode Island for a writ of certiorari to review any questions of law

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involved. The petition for writ of certiorari shall set forth the errors claimed. Upon the filing of

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such a petition with the clerk of the supreme court, the supreme court may, if it sees fit, issue its

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writ of certiorari to the district court to certify to the supreme court the record of the proceeding

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under review.

 

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     SECTION 3. This act shall take effect on January 1, 2023.

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LC005237

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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, effective January 1, 2023, create superior court jurisdiction over all appeals

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of tax administrators concerning assessment, deficiency, refund claim, license or permit. This act

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would also create an exemption for the taxpayer from prepayment as a condition precedent.

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     This act would take effect on January 1, 2023.

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