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Rhode Island Governor Lincoln Chafee has signed a budget bill establishing a tax amnesty program applicable to all state taxes collected by the Tax Administrator. The amnesty program will run from September 2, 2012 to November 15, 2012. Amnesty will apply to any taxable period ending on or prior to December 31, 2011. During the program, penalties will be waived for a taxpayer who submits an application and pays all tax and interest due or enters into an installment payment plan. Interest for periods covered by the program will be computed at the statutory interest rate less 25%. Eligible taxpayers can still apply for amnesty for taxable periods for which a bill or notice of deficiency determination has been sent and any periods in which an audit has been completed but not yet billed. Amnesty is not available to taxpayers who are under any criminal investigation or party to a pending civil or criminal proceeding for tax fraud. (Ch. 241 (H.B. 7323), Laws 2012, effective as noted)


Rhode Island’s regulation relating to mandatory electronic funds transfer (EFT) payments for sales and use tax and personal income tax withholding has been amended. Beginning January 1, 2010, any person with an average monthly sales and use tax liability of $200 or more per month for the look back period, must make payments via EFT. Any taxpayer with 10 or more employees, over the course of the look-back period, is required to make the withholding tax payments via EFT. Taxpayers who are required to make payments by EFT may request a waiver from the EFT requirement if they can show good cause. The regulation provides some reasons that would be considered good cause for a waiver. (Reg. EFT 09-01, Rhode Island Division of Taxation, effective January 1, 2010)


Rhode Island has amended it’s definition of a retailer to include a retailer who enters into an agreement with a resident, under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by link on an internet web site, or otherwise, to the seller. This presumption will only apply if the cumulative gross receipts from sales by the retailer to customers in the state who were referred by these resident solicitors are in excess of $5,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December. The presumption can be rebutted by proof that the resident solicitor did not engage in any solicitation that would satisfy the U.S. Constitution during such four quarterly periods. (H.B. 5983, Laws 2009, effective as noted)


Effective January 1, 2007, numerous Rhode Island sales and use tax regulations were amended to conform to the Streamlined Sales and Use Tax Agreement. These regulations include definitions relating to drugs, medical equipment, telecommunications, and clothing. Additionally, provisions applicable to delivery charges, direct mail, and exemption and resale certificates were also included. Conforming statutory amendments enacted in 2006 also became effective, and the state became a full member of the Agreement. (Rhode Island Division of Taxation, January 1, 2007)


The Rhode Island Division of Taxation is offering a Tax Amnesty Program that began July 15, 2006 and will expire on September 30, 2006. The program offers taxpayers the opportunity to clear unpaid tax obligations that were payable to the state and collected by the Tax Administrator. Unpaid penalties are waived for eligible applicants, as well as, civil or criminal charges for any taxpayer for the taxable period for which amnesty has been granted. Additionally, previously billed tax liabilities are eligible for the tax amnesty. Taxpayers who are under criminal investigation or involved in any pending criminal or civil court litigation, however, are not eligible for amnesty. Beginning October 1, 2006, the interest rate on unpaid taxes will increase to eighteen percent (18%). Taxpayers who do not apply for amnesty and are later convicted of fraud or willful intent to evade Rhode Island taxes will be subject to a $10,000 fine or one (1) year imprisonment or both. (



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