2024 -- S 2813 AS AMENDED | |
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LC004533 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
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A N A C T | |
RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- RHODE | |
ISLAND BUSINESS CORPORATION ACT | |
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Introduced By: Senators Britto, Tikoian, Lawson, DiPalma, LaMountain, Ciccone, and | |
Date Introduced: March 22, 2024 | |
Referred To: Senate Finance | |
(Dept. of Revenue) | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Sections 44-11-7.1 and 44-11-29 of the General Laws in Chapter 44-11 |
2 | entitled "Business Corporation Tax" are hereby amended to read as follows: |
3 | 44-11-7.1. Limitations on assessment. |
4 | (a) General. Except as provided in this section, the amount of the Rhode Island corporate |
5 | income tax shall be assessed within three (3) years after the return was filed, whether or not the |
6 | return was filed on or after the prescribed date. For this purpose, a tax return filed before the due |
7 | date shall be considered as filed on the due date. |
8 | (b) Exceptions. |
9 | (1) The tax may be assessed at any time if: |
10 | (i) No return is filed. |
11 | (ii) A false or fraudulent return is filed with intent to avoid tax. |
12 | (2) Where, before the expiration of the time prescribed in this section for the assessment of |
13 | tax, or before the time as extended, both the tax administrator and the taxpayer have consented, in |
14 | writing, to its assessment after that time, the tax may be assessed at any time prior to the expiration |
15 | of the agreed upon period. |
16 | (3) If a taxpayer’s deficiency is attributable to an excessive net operating loss carryback |
17 | allowance, it may be assessed at any time that a deficiency for the taxable year of the loss may be |
18 | assessed. |
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1 | (4) An erroneous refund shall be considered to create an underpayment of tax on the date |
2 | made. An assessment of a deficiency arising out of an erroneous refund may be made at any time |
3 | within three (3) years thereafter, or at any time if it appears that any part of the refund was induced |
4 | by fraud or misrepresentation of a material fact. |
5 | (c) Notwithstanding the provisions of this section, the tax may be assessed at any time |
6 | within six (6) years after the return was filed if a taxpayer omits from its Rhode Island income an |
7 | amount properly includable therein that is in excess of twenty-five percent (25%) of the amount of |
8 | Rhode Island income stated in the return. For this purpose there shall not be taken into account any |
9 | amount that is omitted in the return if the amount is disclosed in the return, or in a statement attached |
10 | to the return, in a manner adequate to apprise the tax administrator of the nature and amount of the |
11 | item. |
12 | (d) The running of the period of limitations on assessment or collection of the tax or other |
13 | amount, or of a transferee’s liability, shall, after the mailing of a notice of deficiency, be suspended |
14 | for any period during which the tax administrator is prohibited from making the assessment or from |
15 | collecting by levy, and for sixty (60) days thereafter. |
16 | (e) No period of limitations specified in any other law shall apply to the assessment or |
17 | collection of Rhode Island corporate income tax. Under no circumstances shall the tax |
18 | administrator issue any notice of deficiency determination for Rhode Island business corporation |
19 | tax due and payable more than ten (10) years after the date upon which the return was filed or due |
20 | to be filed, nor shall the tax administrator commence any collection action for any business |
21 | corporation tax due and payable unless the collection action is commenced within ten (10) years |
22 | after a notice of deficiency determination became a final collectible assessment; provided however, |
23 | that the tax administrator may renew a statutory lien that was initially filed within the ten-year (10) |
24 | period for collection actions. Both of the aforementioned ten-year (10) periods are tolled for any |
25 | period of time the taxpayer is in federal bankruptcy or state receivership proceedings. “Collection |
26 | action” refers to any activity undertaken by the division of taxation to collect on any state tax |
27 | liabilities that are final, due, and payable under Rhode Island law. “Collection action” may include, |
28 | but is not limited to, any civil action involving a liability owed under chapter 11 of title 44. |
29 | (f) The ten-year (10) limitation shall not apply to the renewal or continuation of the state’s |
30 | attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation |
31 | periods set forth in this section. |
32 | 44-11-29. Notice to tax administrator of sale of assets — Tax due. |
33 | (a) The sale or transfer of the major part in value of the assets of a domestic corporation, |
34 | domestic limited liability company, domestic limited partnership, or any other domestic business |
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1 | entity, or of the major part in value of the assets situated in this state of a foreign corporation, |
2 | foreign limited liability company, foreign limited partnership, or any other foreign business entity, |
3 | other than in the ordinary course of trade and in the regular and usual prosecution of business by |
4 | said corporation, limited liability company, limited partnership, or any other business entity |
5 | whether domestic or foreign, and the sale or transfer of the major part in value of the assets of a |
6 | domestic corporation, domestic limited liability company, domestic limited partnership, or any |
7 | other domestic corporation business entity, or of the major part in value of the assets situated in |
8 | this state of a foreign corporation, foreign limited liability company, foreign limited partnership, or |
9 | any other foreign business entity that is engaged in the business of buying, selling, leasing, renting, |
10 | managing, or dealing in real estate, shall be fraudulent and void as against the state unless the |
11 | corporation, limited liability company, limited partnership, or any other business entity, whether |
12 | domestic or foreign, at least five (5) business days before the sale or transfer, notifies the tax |
13 | administrator of the proposed sale or transfer and of the price, terms, and conditions of the sale or |
14 | transfer and of the character and location of the assets by requesting a letter of good standing from |
15 | the tax division that shall be received by the tax division at least five (5) business days before the |
16 | sale or transfer. Whenever a corporation, limited liability company, limited partnership, or any |
17 | other business entity, whether domestic or foreign, makes such a sale or transfer, any and all tax |
18 | returns required to be filed under this title must be filed and any and all taxes imposed under this |
19 | title shall become due and payable at the time when the tax administrator is so notified of the sale |
20 | or transfer, or, if he or she is not so notified, at the time when he or she should have been notified |
21 | of the sale or transfer. |
22 | (b) This section shall not apply to sales by receivers, assignees under a voluntary |
23 | assignment for the benefit of creditors, trustees in bankruptcy, debtors in possession in bankruptcy, |
24 | or public officers acting under judicial process. |
25 | SECTION 2. Section 44-19-13 of the General Laws in Chapter 44-19 entitled "Sales and |
26 | Use Taxes — Enforcement and Collection" is hereby amended to read as follows: |
27 | 44-19-13. Notice of determination. |
28 | (a) The tax administrator shall give to the retailer or to the person storing, using, or |
29 | consuming the tangible personal property a written notice of his or her determination. Except in the |
30 | case of fraud, intent to evade the provisions of this article, failure to make a return, or claim for |
31 | additional amount pursuant to §§ 44-19-16 — 44-19-19, every notice of a deficiency determination |
32 | shall be mailed within three (3) years after the fifteenth (15th) day of the calendar month following |
33 | the month for which the amount is proposed to be determined or within three (3) years after the |
34 | return is filed, whichever period expires later, unless a longer period is agreed upon by the tax |
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1 | administrator and the taxpayer. |
2 | (b) Notwithstanding the provisions of subsection (a) of this section, under no circumstances |
3 | shall the tax administrator issue a notice of a deficiency determination for any sales or use tax |
4 | determined to be due and payable more than ten (10) years after the return is filed or was due to be |
5 | filed, nor shall the tax administrator commence any collection action for any tax that is due and |
6 | payable unless the collection action is commenced within ten (10) years after a notice of a |
7 | deficiency determination becomes a final collectible assessment; provided, however, that the tax |
8 | administrator may renew a statutory lien that was initially filed within the ten-year (10) period for |
9 | collection actions. Both of the aforementioned ten-year (10) periods are tolled for any period of |
10 | time the taxpayer is in federal bankruptcy or state receivership proceedings. “Collection action” |
11 | refers to any activity undertaken by the division of taxation to collect on any state tax liabilities that |
12 | are final, due, and payable under Rhode Island law. “Collection action” may include, but is not |
13 | limited to, any civil action involving a liability owed under chapters 18, 18.1, 18.2, and 19 of title |
14 | 44. This section excludes any sales and use tax liabilities that are deemed trust funds as defined in |
15 | § 44-19-35, as well as any meals and beverage tax liabilities that are collected pursuant to § 44-18- |
16 | 18.1, and any hotel tax liabilities that are collected pursuant to § 44-18-36.1. |
17 | (c) The ten-year (10) limitation shall not apply to the renewal or continuation of the state’s |
18 | attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation |
19 | periods set forth in this section. |
20 | SECTION 3. Section 44-23-9 of the General Laws in Chapter 44-23 entitled "Estate and |
21 | Transfer Taxes — Enforcement and Collection" is hereby amended to read as follows: |
22 | 44-23-9. Assessment and notice of estate tax — Collection powers — Lien. |
23 | (a) The tax imposed by § 44-22-1.1 shall be assessed upon the full and fair cash value of |
24 | the net estate determined by the tax administrator as provided in this chapter. Notice of the amount |
25 | of the tax shall be mailed to the executor, administrator, or trustee, but failure to receive the notice |
26 | does not excuse the nonpayment of or invalidate the tax. The tax administrator shall receive and |
27 | collect the assessed taxes in the same manner and with the same powers as are prescribed for and |
28 | given to the collectors of taxes by chapters 7 — 9 of this title. The tax shall be due and payable as |
29 | provided in § 44-23-16, shall be paid to the tax administrator, and shall be and remain a lien upon |
30 | the estate until it is paid. All executors, administrators, and trustees are personally liable for the tax |
31 | until it is paid. |
32 | (b) Notwithstanding the provisions of subsection (a) of this section, under no circumstances |
33 | shall the tax administrator issue any notice of deficiency determination for the amount of the estate |
34 | tax due more than ten (10) years after the return was filed or should have been filed, nor shall the |
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1 | tax administrator commence any collection action for any estate tax due and payable unless the |
2 | collection action is commenced within ten (10) years after the date a notice of deficiency |
3 | determination became a final collectible assessment. “Collection action” refers to any activity |
4 | undertaken by the division of taxation to collect on any state tax liabilities that are final, due, and |
5 | payable under Rhode Island law. “Collection action” may include, but is not limited to, any civil |
6 | action involving a liability owed under chapters 22 and 23 of title 44. |
7 | (c) The ten-year (10) limitation shall not apply to the renewal or continuation of the state’s |
8 | attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation |
9 | periods set forth in this section. |
10 | SECTION 4. Section 44-30-83 of the General Laws in Chapter 44-30 entitled "Personal |
11 | Income Tax" is hereby amended to read as follows: |
12 | 44-30-83. Limitations on assessment. |
13 | (a) General. Except as otherwise provided in this section the amount of the Rhode Island |
14 | personal income tax shall be assessed within three (3) years after the return was filed, whether or |
15 | not the return was filed on or after the prescribed date. For this purpose a tax return filed before the |
16 | due date shall be considered as filed on the due date; and a return of withholding tax for any period |
17 | ending with or within a calendar year filed before April 15 of the succeeding calendar year shall be |
18 | considered filed on April 15 of the succeeding calendar year. |
19 | (b) Exceptions. |
20 | (1) Assessment at any time. The tax may be assessed at any time if: |
21 | (i) No return is filed; |
22 | (ii) A false or fraudulent return is filed with intent to evade tax; or |
23 | (iii) The taxpayer fails to file a report, pursuant to § 44-30-59, of a change, correction, or |
24 | amended return, increasing his or her federal taxable income as reported on his or her federal |
25 | income tax return or to report a change or correction that is treated in the same manner as if it were |
26 | a deficiency for federal income tax purposes. |
27 | (2) Extension by agreement. Where, before the expiration of the time prescribed in this |
28 | section for the assessment of tax, or before the time as extended pursuant to this section, both the |
29 | tax administrator and the taxpayer have consented in writing to its assessment after that time, the |
30 | tax may be assessed at any time prior to the expiration of the period agreed upon. |
31 | (3) Report of changed or corrected federal income. If the taxpayer shall, pursuant to § 44- |
32 | 30-59, file an amended return, or report a change or correction increasing his or her federal taxable |
33 | income or report a change or correction that is treated in the same manner as if it were a deficiency |
34 | for federal income tax purposes, an assessment may be made at any time prior to two (2) years after |
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1 | the report or amended return was filed. This assessment of Rhode Island personal income tax shall |
2 | not exceed the amount of the increase attributable to the federal change, correction, or items |
3 | amended on the taxpayer’s amended federal income tax return. The provisions of this paragraph |
4 | shall not affect the time within which or the amount for which an assessment may otherwise be |
5 | made. |
6 | (4) Deficiency attributable to net operating loss carryback. If a taxpayer’s deficiency is |
7 | attributable to an excessive net operating loss carryback allowance, it may be assessed at any time |
8 | that a deficiency for the taxable year of the loss may be assessed. |
9 | (5) Recovery of erroneous refund. An erroneous refund shall be considered to create an |
10 | underpayment of tax on the date made. An assessment of a deficiency arising out of an erroneous |
11 | refund may be made at any time within three (3) years thereafter, or at any time if it appears that |
12 | any part of the refund was induced by fraud or misrepresentation of a material fact. |
13 | (6) Armed forces relief. For purposes of this tax, the date appearing in 26 U.S.C. § 692(a) |
14 | shall be January 1, 1971. |
15 | (c) Omission of income on return. Notwithstanding the foregoing provisions of this section, |
16 | the tax may be assessed at any time within six (6) years after the return was filed if an individual |
17 | omits from his or her Rhode Island income an amount properly includible therein which is in excess |
18 | of twenty-five percent (25%) of the amount of Rhode Island income stated in the return. For this |
19 | purpose there shall not be taken into account any amount that is omitted in the return if the amount |
20 | is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise |
21 | the tax administrator of the nature and amount of the item. |
22 | (d) Suspension of limitation. The running of the period of limitations on assessment or |
23 | collection of tax or other amount (or of a transferee’s liability) shall, after the mailing of a notice |
24 | of deficiency, be suspended for the period during which the tax administrator is prohibited under § |
25 | 44-30-81(c) from making the assessment or from collecting by levy, and for sixty (60) days |
26 | thereafter. |
27 | (e) Limitations exclusive. No period of limitations specified in any other law shall apply to |
28 | the assessment or collection of Rhode Island personal income tax. Under no circumstances shall |
29 | the tax administrator issue any notice of a deficiency determination for Rhode Island personal |
30 | income tax due or payable more than ten (10) years after the date upon which the return was filed |
31 | or due to be filed, nor shall the tax administrator commence any collection action for any personal |
32 | income tax due and payable unless the collection action is commenced within ten (10) years after |
33 | a notice of deficiency determination became a final collectible assessment; provided however, that |
34 | the tax administrator can renew a statutory lien that was initially filed within the ten-year (10) |
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1 | period for collection actions. Both of the aforementioned ten-year (10) periods are tolled for any |
2 | period of time the taxpayer is in federal bankruptcy or state receivership proceedings. “Collection |
3 | action” refers to any activity undertaken by the division of taxation to collect on any state tax |
4 | liabilities that are final, due, and payable under Rhode Island law. “Collection action” may include, |
5 | but is not limited to, any civil action involving a liability owed under chapter 30 of title 44. This |
6 | section excludes any liabilities that are deemed trust funds as defined in § 44-30-76, as amended. |
7 | (f) The ten-year (10) limitation shall not apply to the renewal or continuation of the state’s |
8 | attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation |
9 | periods set forth in this section. |
10 | SECTION 5. This act shall take effect upon passage. |
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LC004533 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- RHODE | |
ISLAND BUSINESS CORPORATION ACT | |
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1 | This act would make numerous technical amendments to the statutes on taxes and |
2 | corporations, associations and partnerships. |
3 | This act would take effect upon passage. |
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LC004533 | |
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