The bill amends Section 44-1-7 of the General Laws concerning state tax officials, specifically addressing interest on delinquent tax payments and limitations on audit periods. It establishes that, starting January 1, 2026, the interest rate on all delinquent tax payments, including but not limited to sales and trust fund taxes, will be capped at twelve percent (12%) per annum, with no exclusions. This cap will serve as both a floor and a ceiling for interest rates, ensuring consistency in their application. The interest rate assessed 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, setting a three-year limit for ordinary tax returns and a seven-year limit 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, regardless of whether a formal audit has been initiated. These limitations shall apply without exception.

Statutes affected:
655: 44-1-7