The bill amends Section 44-1-7 of the General Laws concerning state tax officials, specifically addressing interest rates on delinquent tax payments and limitations on the tax administrator's authority to conduct audits. It establishes that, starting January 1, 2026, the interest rate on all delinquent tax payments will be capped at twelve percent (12%) per annum, including for trust fund taxes. The bill specifies that the interest rate applied will be based on the date of notification of delinquency rather than the original tax obligation date.

Additionally, the bill introduces limitations on the tax administrator's auditing authority, restricting audits to a period of three years from the date of filing, with a maximum of seven years for cases involving fraud. Under no circumstances shall the tax administrator initiate or conduct an audit, investigation, or tax collection for any period exceeding ten years from the date of the original filing or required filing deadline, whichever is later. The tax administrator is also prohibited from requesting filings or attempting to collect tax liabilities for any period in excess of seven years from the date of filing or required filing deadline, regardless of whether an audit has been initiated.

The provisions aim to provide clarity and fairness in tax administration, ensuring taxpayers are not subjected to excessive interest rates or prolonged audit periods. The act will take effect on January 1, 2026, applying to all relevant assessments, audits, and tax payments initiated on or after that date.

Statutes affected:
5757: 44-1-7