The bill amends Section 44-1-7 of the General Laws regarding state tax officials, specifically addressing interest rates 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 rate in effect on the date of the notification of delinquency, rather than the date of the original tax obligation.

Additionally, 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. In cases involving fraud, the audit period shall not exceed seven years from the date of filing. Under no circumstances shall the tax administrator initiate or conduct an audit, investigation, or tax collection for any period in excess of 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, regardless of whether a formal audit has been initiated. These limitations shall apply without exception. The provisions of 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:
655: 44-1-7