The bill amends Section 44-1-7 of the General Laws concerning interest on delinquent tax payments and the limitations on the tax administrator's authority to audit taxpayers. 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 interest rate applied will be based on the date of notification of delinquency rather than the original tax obligation date.

Additionally, the bill limits the tax administrator's authority to audit taxpayers 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 exceeding seven years from the date of filing or required filing deadline, regardless of whether an audit has been initiated. This limitation applies without exception. This act will take effect on January 1, 2026, and will apply to all assessments, audits, and tax payments initiated on or after that date.

Statutes affected:
5757: 44-1-7