The bill amends Section 44-1-7 of the General Laws regarding state tax officials, specifically addressing interest on delinquent tax payments and limitations on audit periods. It introduces a cap on the interest rate for all delinquent taxes at twelve percent (12%) per annum, effective January 1, 2026, which will apply uniformly across all types of taxes, including sales and trust fund taxes. Additionally, the bill stipulates that the interest rate assessed will be based on the rate in effect at the time of notification of delinquency rather than the original tax obligation date.

Furthermore, the bill limits the tax administrator's authority to audit taxpayers to a maximum of three years from the date of filing for ordinary tax returns, with a seven-year limit for cases involving fraud. It also establishes a ten-year maximum for any audit or tax collection efforts from the original filing date. The tax administrator is prohibited from requesting filings or collecting tax liabilities for any period exceeding seven years, regardless of whether an audit has been initiated. This legislation is set to take effect on January 1, 2026, and will apply to all assessments, audits, and tax payments initiated on or after that date.

Statutes affected:
655: 44-1-7