2009 -- S 0404

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LC01450

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2009

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A N A C T

RELATING TO TAXATION -- PERSONAL INCOME TAX

     Introduced By: Senator Leo R. Blais

     Date Introduced: February 12, 2009

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-30-71 of the General Laws in Chapter 44-30 entitled "Personal

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Income Tax" is hereby amended to read as follows:

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     44-30-71. Requirement of withholding tax from wages. -- (a) General. - Every

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employer maintaining an office or transacting business within this state and making payment of

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any wages subject to Rhode Island personal income tax to a resident or nonresident individual

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shall deduct and withhold from the wages for each payroll period a tax computed in such manner

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as to result, so far as practicable, in withholding from the employee's wages during each calendar

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year an amount substantially equivalent to the tax reasonably estimated to be due resulting from

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the inclusion in the employee's Rhode Island income of his or her wages received during the

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calendar year. The method of determining the amount to be withheld shall be prescribed by

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regulations of the tax administrator, with due regard to the withholding exemptions of the

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employee.

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      (b) Withholding exemptions. - For purposes of this section:

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      (1) An employee shall be entitled to the equivalent of the same number of Rhode Island

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withholding exemptions as the number of withholding exemptions to which he or she is entitled

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for federal income tax withholding purposes. An employer may rely upon the number of federal

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withholding exemptions claimed by the employee.

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      (2) The amount of the equivalent of each Rhode Island withholding exemption shall be

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equal to and correspond to those set forth in 26 U.S.C. section 3402(b).

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     (c) Electronic filing. Any person required to make, withhold and remit tax under this

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section must make the payments by electronic funds transfer or other electronic means defined by

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the tax administrator. The tax administrator shall adopt rules necessary to administer a program

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of electronic funds transfer or other electronic filing system.

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     (1) In the case of failure of a person required to deposit taxes by electronic funds transfer

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or other electronic means defined by the tax administrator under the provisions, unless it is shown

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that such failure is due to reasonable cause and not due to willful neglect, there shall be added to

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the amount shown as tax required to have been electronically transferred five percent (5%) of the

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amount or five hundred dollars ($500) per required payment, whichever is less.

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     (2) The tax administrator is authorized to waive the electronic filing requirement in a

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given year for persons who can show that filing electronically will cause undue hardship.

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     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 -- PERSONAL INCOME TAX

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     This act would require employers to remit withholding taxes by electronic funds transfer

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or other electronic means defined by the tax administrator.

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     This act would take effect upon passage.

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LC01450

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